I read this post by a CPA on LinkedIn last week. It caught my attention because even with years of experience he still had to wrestle with his own demons about pricing. Read his post and then see my comments below.
“I landed my first client for my new firm. In the sales process, I almost talked myself out of my own price.
I ran an accounting firm for 13 years, sold it, and now I coach other firm owners on how to price their work. You’d think I’d be past this.
Nope.
I really wanted to win this one. As I was working through the pricing, I kept thinking maybe the number was too high. Maybe I should knock some off just to get the first one in the door.
None of that came from the client. It was all in my head, before I ever quoted the price.
I stuck with my number. And they said yes.
If I had discounted, I never would have known I didn’t need to. And I’d have started the relationship with a number I didn’t believe in.”
Comment One
“I almost talked myself out of my own price.” He’s right here, we are often our own worst enemy. The narrative in our heads can be far worse than anything a client might say. I don’t think we can stop this; we just get more confident and push the thoughts away more quickly.
Comment Two
“as I was working through the pricing, I kept thinking maybe the number was too high.”
This statement tells me two things: 1) he was going to make a single take-it-or-leave-it offer; and 2) he did not know anything about the client’s thinking about money.
Let’s start with the second problem. Your Discovery call is the time to elicit the prospective client’s thinking and feelings about money. Do they connect the money they spend to their self-worth? “I deserve the better things in life” is one point of view, and “I am not worth the better things in life” is the opposite. Ask people while you’re in discovery. Attitudes about money are one of the pieces of a Great Fit Client profile.
If your Great Fit Client has high self-esteem and believes they deserve the better things in life, you have a far higher chance they’ll see your fees as just right. If the prospect thinks they’ don’t deserve the better things in life, almost any fee will seem too high.
The first problem, offering one take-it-or-leave-it option, is a separate issue. It ignores the well-documented fact that buyers want choices. It’s the desire for autonomy that influences most human beings. Give only one option and the buyer balks. Give 3 options and the buyer pays attention and eventually chooses one of them.
Comment Three
“I kept thinking maybe the number was too high. Maybe I should knock some off just to get the first one in the door.”
Here again we see that he did not know the client’s attitude about money and was planning only one option. He does seem to connect the price to what is included. That’s a start but not enough.
When you design three options with fees proportional to the significance of the outcomes, you are showing a relationship between the outcomes and the fees. IMPACT PLUS creates highly significant impacts, IMPACT creates somewhat less significant impacts, and IMPACT Light creates less significant impacts. Clients will see this correlation and understand it without a problem. One fee for one package tells them very little.
The phrase “knock something off” indicates that he did see that there are options, but he chose not to offer them.
To me, offering only one option is the biggest cause of pricing anxiety. And it’s so easy to reduce that anxiety. Offer 3 options!
Comment Four
“I really wanted to win this one.” This is what happens when there’s only one offer. The client says ‘yes’ or ‘no’ and you win or lose.
It is hard enough to keep clients and revenue coming in. When you treat each prospect as either giving you a win or a loss, it makes business even harder.
We are not playing a game where the outcome is one winner and one loser.
We are immersed in a long game of life where there are ups and downs, and sometimes we’re ecstatic and sometimes we’re disappointed.
You, the Firm Owner, have the choice of seeing client acquisition as win/lose or not.
Key Takeaways
I cannot emphasize strongly enough that choosing the long view gives you ways to make business and life more successful. It’s the way to go.
- Know your client’s and prospect’s attitudes about money.
- Design 3 customized options for every prospect/client.
- Set fees in proportion to the significance of the impacts you create.
I welcome questions and comments. Email them here.
