All pricing starts with positioning. All positioning starts with mindset.
We spoke to a firm last week who just picked up what, at face value, is a good piece of business (multiple location business with a number of owners), 40K in annual revenue to the firm. It will be one of the firms largest family groups. Eg will land the client in the fragility zone.
We started to dig into scope and price... as we do in Renew conversations... it became clear to me that the price was based on the firm being very efficient. The prospect had a previous low-cost provider that did a terrible job, errors and the work was not timely.
The further we got into the conversation the partner (who is over 50 years old, plenty of wealth with a great track record) told the prospect (my words, not the partner’s), “We will reprice after a year when we prove ourselves.”
Insert red flag to the bull, I am a Taurus.
"What???????" I said, “Let me get this straight. Your anchoring was priced by a low-cost provider that did a terrible job, and to get your pricing “right” you have to prove yourself for a year and you re-anchored the client to another price that in my view felt low….?"
We dug into mindset.
I said, "Mr Partner you have NOTHING to prove. You have a successful business with a track record of successful business clients" (by the way should you have video testimonials from clients on your site? Pingus for structure/help).
Remember, all pricing starts with positioning. All positioning starts with mindset.
Our intention is... “we kick butt”... and price based on value/outcomes. We have a pricing process internally (not alone)… where we focus on a great pricing process based on outcomes, value provided etc.. this is different than the result.
We separate process from results.
Follow the process and results will take care of themselves. BTW, read the book by Professor and Professional Poker Player, Annie Duke, Thinking in Bets. It is all about separating process from results. The challenge in this situation is that the firm was focused on the result, not the process eg winning the work, not playing to win. Please note the team did help price the job yet my hunch isthere was an emphasis on efficiency NOT value.
Result: In my view, a 12-month engagement for $40K where efficiency is extremely important (as it always is). Advisory likely underpriced. And a feeling that the firm has to “prove ourselves” to appropriately price the work after the first year. Admittedly, I am not thrilled with it. Feels like the firm is already in a defensive position.
Let’s circle back.
Everything starts with mindset. You have NOTHING to prove. You kick butt. You follow the ReNew positioning, selling and pricing process. You follow the process and you provide a play to win price and you either win the work or you don’t.
If you don’t... you move on. The world is one of abundance.
If you do... you kick butt.
Let go of your need for approval or that you need to prove yourself. That has been accomplished. Serve your BIG self, not your small self. Your job now is to make the firm #1 client, follow a process and kick butt!
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About the Author:
Shannon Vincent has dedicated his entire career to working with accountants in various capacities. He has consulted with Top 100 firms to Sole Practitioners, helping them create sustainable and profitable businesses. A member of the California Society of CPAs, he received a Bachelor’s Degree in Economics with an emphasis in accounting from University of California, Santa Barbara, and now resides in the San Francisco Bay Area. Shannon is passionate about helping accounting firms plan and enact better business practices so that they can thrive into the future.
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