Practical Pricing for Accountants in Singapore (Part 3)

Now that you have a general idea on price strategy and value of your service, you also need to think about discussing price with your client. For most people, this is the least enjoyable aspect of building client relations because no one wants to be seen as a debtor chasing people for money. Like it or not, it is an integral aspect of your service. It also has the ability to affect your pricing strategy. How so? Reflect on the method in which you discuss about pricing with your client. Do you normally do it before embarking on a new project, in the middle of the project or do you simply send an invoice to the client upon completion of the project? How do the discussions go? If you’ve always had the practice of talking to your client about price BEFORE the start of the project, you’re on the right track. You’ve invested in the project and you pull the strings on the price and not the other way around. Do not place the onus of pricing on the client. They need your service so you have the upper hand. In any business, use whatever advantage you have in order to maximise on your profits. In this instance, get the price discussion out of the way before you start providing your service.

Read more about Practical Pricing for Accountants (Part 2) here

Price: Helping Clients See It Your Way

Now that you have a good foundation in place, it is time to help your clients see the price and value of your service in the same light. In service, as in life, it is always good to have options. This is also in view of the basic human psyche that shows that humans prefer to have the freedom to make their own choice. By giving them price options, you are playing into this preference. If this doesn’t convince you, think of it in this way: you have three potential clients; A, B and C. You have a set price for your service. Client A is perfectly fine with the price and would then be willing to sign up for your service. Client B, however, thinks it is lower than he is willing to pay so you’ve basically lost out on the additional cost that he wouldn’t have minded paying for the service. On the other hand, Client B thinks the price is too high so he’s simply not going to sign up for your service.

You may be interested to find out is Accounting Services a Cost or an Opportunity here

This example highlights the importance of giving people options. One way of getting around this is by offering packages with different prices. Do be mindful of making sure that there are inherent differences in each package. These differences should be communicated to clients so that they are aware of the value for each package. A very good way of presenting the differences in these packages is by creating a menu that lists the options. If the first package is your basic model, the other packages should build on your service by providing more value. By presenting it in a menu, your client will be better able to understand the differences in service provided, value added as well as price for each package. The next step would be to price those packages. A good rule of thumb is to ensure that there is little difference between your middle and top package. A good example of this pricing strategy is often found in supermarkets. Promotion items sold in a bundle are often sold at only a slightly higher price than if you were to buy individual products. Therein, the consumer perception is often that they would be apt to save more by paying a little extra. This often disregards whether the consumer really needs that many products in the first place!

The next two steps involve describing your options and explaining these packages to your clients. When doing so, remember that you really do not want to undersell your service. As such, you need to up the ante of your packages slightly. Try not to give them the perception that the package that is lowest in price is cheap and the value they are receiving is much less than market value. Instead, instill in your clients the view that your cheapest package is actually above average and that they have two other improved and better options available to them. This goes a long way towards hooking clients via your pricing packages. Of course, you would then have to find the best way to sell those packages to your clients. A good tip would be to start from the top. All the best salesmen do this because it is always easier to sell a more expensive option and give more affordable options in the end than the other way round. This is also due to the fact that most clients already have an idea of the type of service that they want from you. By offering the best package first, the onus would be on the client to decide whether they want a less attractive, slightly cheaper package.