Price is just about the last point you want to contest with your competitors. It can turn your firm into a compliance mill, it is easily defeated by competing firms, and once you base your firm’s appeal on price it becomes much more difficult to market your firm as offering more value than your competitors. Plus, once you start competing for the lowest rung, you have to keep going lower and lower in order to stay relevant.
So you know this – but how do you let potential clients know that they should be looking past price when they go hunting for an accounting firm?
The key is to reframe the conversation about your fee structure to be about the value given rather than the lowest price. Your firm isn’t about shovelling out fast food burgers on a 99-cent menu – your firm is prime steak. And as such, it’s only right that you cost more.
Let’s take a quick look at 3 tips that will help you if you’re negotiating with a client that keeps bringing the conversation around to price.
1. If you do negotiate price, get a confirmation first.
If, after you’ve done everything you can to convince your client that you’re going to boost their business or personal finances far beyond what other firms can do for them, they still want to peck away at your price, you have two options.
The first is to politely say “No thank you” and walk away. There’s a lot of power in having the confidence to be able to say, “No.” It tells the potential client that even if they’re not aware of the value that you can bring to their finances, you are, and you’re sure that they’re worth at least X amount of dollars.
(You can even up your game by recommending another firm. It will make you seem classy, and has the subtle side-effect of leaving that potential client wondering what they’re missing by not signing on with you.)
That first option can be fairly scary though, especially if you’re just starting out on your own and need that income. Option two is to go ahead with the price negotiation… but only after you have a firm commitment from the client that they want to sign on with you.
What you want to avoid is dropping the price and then have the client still say that they want to shop around. If that’s the case it means that the client will expect further drops in price when they come back, and that just leads to a death spiral for your firm.
2. Price based on your effort.
Get a clear picture of what your client expects of you. Better yet, in an ideal situation you pitch to them a suite of services that you feel will give them the most value for their business or personal finances at the time.
Either way, you don’t want to throw a price out there that covers only a certain service or two, and then find out after that your client was expecting more from your firm.
It sounds a little obvious, but problems can arise if you’re not familiar with their business. The more tangled up their affairs, the more effort you and your team are going to have to put in to get them pointed in the right direction. Some clients will simply require more work in order to get them to the same rung that other clients reached with less effort. Price accordingly, after you have gathered all of the relevant information.
3. Find out what other firms are doing better than you.
If you lay out your case, showing the value you can bring to a client, and they still ask you to drop your price there’s a good chance one of 2 things is going on.
The first thing is that the client is not a client you want, because they’re unable to understand value over price. That doesn’t just make it difficult for you to get what you deserve; it can also indicate that they’re not particularly adept at their own finances, meaning you might possibly have to slug it out with them every step of the way as you’re trying to help them.
The other possibility is that competing firms are offering more value than you are. So you’re asking for comparable fees, but your offered services at that price aren’t as sexy as those offered by your competition.
What makes your competition better than you can be a wide variety of things – more expertise on a specialisation, quicker turnaround, case studies showing how they helped a client with problems similar to what the current client is facing, and so on.
If that’s the case it’s time to do a little snooping around, with the goal of at least drawing even with whatever makes the competition better than you in those specific areas, or better still, one-upping them.
If you’re looking like the better value right across the board it’s going to be much harder for clients to try to negotiate a lower price; they’re going to be worried that they’re going to negotiate themselves right out of working with the top tier accounting firm that can help them boost their business to new levels.