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Give Yourself a Raise

• All audio is streamed through your computer speakers.

• There will be three attendance verification questions during the LIVE webinar that must be answered via the online quiz at the conclusion to qualify for CPE.

• Please note: You will not hear any sound until the webinar begins.

Give Yourself a Raise

• Presented by Sandi Smith Leyva, CPA• Date: November 13, 2014• Time: 2:00-3:00 PM Eastern

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Learning Objectives• Discover how to overcome the commodity

problem forever with a document we’ll show you how to create in 30-minutes or less

• Identify two breakthrough tax return preparation pricing models that will solve your cash flow problems and boost your margins

• Identify common pricing mistakes and how to get around them

• Discover what value pricing is, when it should not be used, and what skill you need to have before you can use it

The Payoff

• Just to be clear– If you raise your price $5 as a result of this webinar and

bill 1000 hours this year, you “earned” $5,000 in this hour that you might not have otherwise.

– If you raise your rates $10 $10,000

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Agenda

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• How to overcome the commodity problem forever with a document we’ll show you how to create in 30-minutes or less

• Where to find the NSA pricing survey • Two breakthrough tax return

preparation pricing models that will solve your cash flow problems and boost your margins

Agenda

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• Common pricing mistakes and how to get around them

• What value pricing is, when it should not be used, and what skill you need to have before you can use it

• The chance to ask questions during this webinar

Pricing Success

• Requires turning our thinking upside-down

• Open mind

• Instead of the client being the bad guy, let’s see how we can improve

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Why We Get Price Resistance

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• There is no relationship

• Do not know how to sell

• Service is not distinguishable

• Client is ignorant of what it takes

• Economy is bad

• Trust is low

Overcoming the Commodity Problem• Sell you and your team, not the service

• Sell the result, not the service

• Move the conversation from price to value

• Bundle commodities with non-commodity services

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Overcoming the Commodity Problem• You MUST put YOURSELF out there• – Yes it’s scary for shy introverted people

• A well-written bio naming your results and credentials

• A well-lit, smiling photo

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Overcoming the Commodity Problem

• Confidence

• Compassion (you are the dentist everyone fears)

• Make it look simple to work with you

• Quick response

• Our Value to You list

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Our Value to You List

• Give prospects a list of things you do and don’t do that are value- adds that they have no clue about

• One of my first mentors

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Our Value to You List

• We don’t charge for filing an extension

• We don’t charge for reviewing an IRS letter

• We point out red flags

• We don’t ask you to pay in advance

• We take credit cards for your convenience

• Our rates are [average, below average] for our credentials, experience, and market

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Communicate your value

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• What do you do differently that distinguishes your service?– Cost saved– Time saved– Intangibles

What can you think of?

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Our Value to You List

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• This is more important than you realize

• This reduces price-resistance

• This validates their purchase decision

It’s all about the education

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• The more you can educate your prospects on the difference, the more you will be able to charge

• An study from Hinge Research Institute showed that buyers rank education 2X important than sellers as a way to reach them

• It’s also about your education and being able to discern what your clients value

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Value Differences in Buyer/Sellers

• ******** Personal relationship **********

• Become a trusted team member

• Know their industry

• Alternate perspective

• Expertise – specialization

• Shared values

From Hinge Marketing Institute study

NSA

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Members: free access to Income and Fees Survey

http://www.nsacct.org/about/nsa-store/income-fee-survey

NSA

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• Mostly EAs– Write–up $86/hour– QuickBooks advisory $92/hour– MAS $129/hour– Tax services $132/hour– 1040 itemized: $233 per return

Insights

• NSA survey – 8% of tax preparers bill hourly– Competition has forced them to go to fixed fees

– Bookkeeping is following

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Two Tax Pricing Methods

• By form• – NSA - 42% bill for tax fees by form

• Year-round – monthly fee

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By Form

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• Put it in your software or a pricing binder

• Set ranges and limits – small, med, large

• When clients see you have a system they will know it’s fair

• Train your assistant on this; you will cave in and go off system – your assistant will not

Year-round

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• Price the annual services for a client, then divide by 12

• Clients love not getting a big bill in March/April

• You can bundle it with other services – less comparable

• More ability to sell higher value ROI services

Common Pricing Mistakes

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• Started out too low or used “employee” rates

• Fix it by charging new clients differently, phase in price increase

Common Pricing Mistakes

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• Lack of marketing and selling skills– You can charge more when you have stronger sales and

marketing skills

• Fix: Be aware of the connection

Common Pricing Mistakes

• We underestimate or leave out indirect costs, overhead, taxes, marketing and selling costs

• Fix: use your cost accounting skills

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Common Pricing Mistakes

• Doing work below your capability due to staffing issues or because you are solo in your practice

• Fix: Delegate

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Common Pricing Mistakes

• Scope creep

• Fix: change orders or “promote” them into a new package

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Why Do We Cave in?

• Money stress– We need to make payroll

• Neediness– One way to overcome neediness

is to learn negotiation skills and to prepare

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Why Do We Cave in?

• Judging the clients/prospects we have and assuming what they can afford

• – Read “The Millionaire Next Door”

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Negotiating Techniques

• Move from yes or no to choice of yesses• – 3 packages

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Negotiating Techniques

• Create an outrageous high-priced offering– Because you will sell it– Some people need to have the best

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3 Ways to Price

• Hourly• Fixed Fee or Flat Fee

– 75% of CPAs use fixed fee

• Value Pricing – starts with the customer’s ROI– Absolutely nothing to do with cost

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Hourly

• Disadvantages– Client’s interests and yours conflict– Client cannot budget precisely– Comparison-shopping is easy– You can’t bill until after the fact

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Hourly

• Advantages– Easy - Use when starting out or when you have no

history of how long something will take– Use when there is high client trust

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Fixed Fee

• Fee is fixed and agreed-upon in advance

• Basically cost plus

• Can be monthly fixed fee or one-time project

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Fixed Fee

• Advantages– Client can budget– Easier to sell– Not as easy to compare– You can bill ahead of work– Can be more profitable

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Fixed Fee

• Disadvantages– Scope must be nailed down– You need history to be accurate– Estimating skills

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Fixed Fee

• Rec – use fixed fee for most services, especially small businesses and individuals– Use your cost accounting knowledge– Learn estimating, change orders, how to “promote” a

client into the next larger package

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Value Pricing

• There is no relationship to costs

• Start with the client and their ROI / what they value

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Value Pricing

• Advantages– Most profitable

• Disadvantages– Need much higher sales skills– Does not work for commodities, very small businesses

where project decisions are not made rationally

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Value Pricing

• Rec – use on mid-market to large company clients where there is extremely high ROI and high trust and exclusivity

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Your pricing questions

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Your Action Items

• What one thing will you do from this webinar?

• Mark your calendar, to do list, project management system, etc.

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Complimentary Newsletter

• http://AccountantsAccelerator.com

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Thank you for participating in this webinar.Below is the link to the online survey and CPE quiz:

http://webinars.nsacct.org/postevent.php?id=13516Use your password for this webinar that is in your email confirmation.

You must complete this survey and the quiz to qualify to receive CPE credit (live webinar only).

National Society of Accountants1010 North Fairfax Street

Alexandria, VA 22314-1574Phone: (800) 966-6679

members@nsacct.org

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