Pricing Action Plan THE 10 COMMANDMENTS OF PRICING TO CHARGE WHAT YOU ARE TRULY WORTH Pricing Pricing—the mere word can stir a mix of emotion and trepidation within an accounting firm. Yet, it stands as one of the most pivotal components of your business strategy. This guide is dedicated to helping transform your pricing from sporadic guesswork to strategic mastery. Within this guide lies the distillation of the '10 Commandments of Pricing'—a beacon for accountants navigating the complex waters of cost-plus, fixed, and value pricing models. You'll unravel how each commandment is not just a guideline but a strategic shift toward recognizing and capturing the true worth of your services. Cost-plus pricing, the traditional bedrock of accounting firms, calculates a markup on the cost of services provided. It's straightforward but often neglects the intangible assets you bring to the table—expertise, experience, and the trust you've cultivated. Fixed pricing provides clarity and consistency to your clients, setting a predetermined fee for specific services. It's the simplicity clients love, but it can sometimes leave money on the table if the perceived value exceeds the fixed cost. Then comes value pricing, a model that aligns fees with the value perceived by the client, not just the cost incurred. It's a paradigm shift—a move towards a pricing strategy that celebrates and monetizes the unique impact your work has on a client's business. But how do you articulate this value? How do you ensure the price mirrors the benefit in your client's eyes? This is where the art of pricing comes alive. It's about weaving the narrative that your numbers aren't just figures in a ledger; they are the storytellers of a business's journey, the guardians of a client's dream. We hope this brief guide will equip you with the understanding to make pricing a powerful tool rather than a mere necessity, being fairly compensated for your worth whilst ensuring clients feel the investment in your services is a stepping stone to their success. We hope that going forward, you won't just set prices; you'll strategize them. You'll move away from the one-size-fits-all approach, unleashing the storyteller within to showcase the epic accounts of value that your firm can offer. Welcome to the new era of pricing in your Elite Firm. The 10 Commandments of Pricing 1. Being paid what you're worth is an honorable thing Anyone can price and get clients (or customers) to buy at a deep discount. As an accountant, your superpower is with numbers, understanding them, and how to improve them. Recognize your own value. You deserve to earn your true worth. Emphasize the value of your expertise and services, ensuring your pricing reflects the quality and outcome you deliver to clients. 2. You are absolutely the worst person to sell to you We all suffer from imposter syndrome. Recognize that self-promotion can be challenging. More importantly, understand that self-doubt can hinder your ability to price services appropriately; trust in your value. If someone else were selling you or your firm, what strengths and talents would they highlight? 3. Review your prices at least quarterly When was the last time you reviewed your pricing? It is vital to stay responsive to market changes and cost fluctuations by regularly assessing and adjusting your pricing structure. It’s the same for your clients too. 4. Now is the very best time to increase your prices If you’re like most of the accountants we know, you haven’t increased your prices in forever! Don’t delay price adjustments; if your value proposition justifies it, the right time is now. 5. We have more issues with our prices than our clients ever do Recognize that price anxiety often stems from internal perceptions rather than client concerns. Overcome those internal hesitations about pricing by confidently communicating the value of your services. Using a tool such as Clarity makes demonstrating and communicating the value easy. 6. Bad clients drive great clients out Avoid undervaluing services by not allowing lower-paying clients to set the standard, thereby ensuring capacity for higher-value engagements. Grading your clients regularly (annually, at least) is an important task with the team. Check out the free Clarity Client Grading Matrix to help. The 10 Commandments of Pricing 7. Price is always independent of cost The cost of creating a basic Rolex is not that much different from a comparable Seiko. Yet the price is vastly different. Why? What impact does this have on your own prices? It obviously depends on your strategy. But whether you are a low-cost leader or a value- added champion, try and set prices based on the perceived value to the client rather than just the cost of service delivery. 8. The client decides on the value that we create Understand that clients' perception of value will ultimately guide their willingness to pay. Engage clients in discussions about value to ensure pricing aligns with their perceived benefits 9. How you articulate the price is what’s really important Positioning is important. And how your pricing compares is too. Communicate pricing with confidence and clarity to convey value effectively. Use Clarity to help you show and express the values of your business advisory services with ease. 10. Always, always, always validate, validate, validate! As accountants, we are great problem solvers. However, we are infamous for making assumptions in our own firms. We strongly believe in our EliteFirm programs, that no opinion can be legitimately held or expressed without validation. Pricing is no different. Think about marketing teams that are constantly A/B testing. Continuously seek feedback to ensure your pricing aligns with the perceived value and client satisfaction. Action Plan Answer the questions on the following pages and rank yourself where relevant. Add any additional comments and then create a Clarity Who/What/When Action Plan. Focus on three things at a time. And find an accountability buddy to hold you to account. Remember, studies show that business owners with a written action plan and who are held accountable achieve 78% more! Compliance is not dead. However, studies show that firms who introduce a repeatable business advisory service triple their profits. Traditional business advisory In the past, traditional business advisory hasn't properly leveraged the right combination of people, processes and technology. It has been heavily reliant on partners or managers to deliver, there isn’t enough time, it's difficult to scale, and only the top 10/20% of clients can typically afford it. Repeatable business advisory Clarity® is the complete business advisory platform that can help you introduce and create a profitable, repeatable and scalable business advisory service for your firm. We help progressive accountants market, sell, price and deliver re-imagined business advisory services at scale. From 90 minutes per week Starting from just 90 mins a week for the first three months, our simple step-by-step implementation plan, coupled with our education systems and member success team, will ensure you generate $37k/£30k/AU$60 GRF, or your money back. Thereafter, we help you build a well-respected and successful transformational accounting firm that earns three times your existing profit with a happier team and clients. Clients love it and ‘get’ it Our multi-award winning solution creates significant value for your small business clients, at a price they’d love to pay. Contact us Why not book a discovery call with one of the team to see what a difference Clarity could make to your firm? www.clarity-hq.com