Pricing. Are you asking for forgiveness or permission? You remember the saying (I do from my restless teenage years).. either you said it or someone said it to you. I find it also applies to pricing.
I had a conversation late last week with a firm who worked on a project that saved the client over $500K. Their engagement letter states they will charge based on value eg. no upfront price. The partner said they were just focused on “getting the work done”… Partner doubts the client reads the engagement letter.
The firm called us to discuss how to approach the conversation (Did NOT want to surprise the client with a 10K bill). The firm was going to be happy with a price of 10K yet admitted the client was a bit frugal so wasn’t excited about the conversation (permission or forgiveness comes to mind).
The firm’s objectives/concerns:
- Wanted to respect the client
- Wanted to address any concerns verbally
The firm stated they were concerned the client would ask.. “how many hours do you have in the job.”
The response we aligned around:
"We don’t price by the hour. We can’t tell you how many hours we have into the job. We have invested thousands of hours in training in order to be in a position to this kind of project work and create value for you. As your Trusted Advisor, we are proactive and have your back".
Do NOT bill in arrears.
Get the price “out of the way”.. and then focus on “getting the work done.”
Getting the price upfront is making the firm the #1client.
You leave value and money on the table by pricing upfront and appropriately.
My hunch is an upfront conversation to save a client $500K is worth a lot more than 10K.
Billing in arrears does not build goodwill in the relationship.
We live and learn!
The pricing and pruning decisions you make in the next month will determine how your life looks an economy where the threat of recession is real.
It’s one thing to understand your firm’s Pareto, but it’s another to execute on what you discover. We clarify some terminology as you think about how to stop the madness. Make next tax season very different from what has happened in the past.
In this month’s ‘On The Edge’ interview, Botkeeper VP of Growth & Strategic Relationships Deneen Dias spoke with ReNew Group co-founder Shannon Vincent about ways in which firms can change their mindset, focus on profitability and target the right clients.