When was the last time a business owner asked you: “Can I buy your time?” Bookkeeping clients may pay for your time, indeed they may ask what your time is worth, but what they really want is to know their books are up to date and, increasingly, need value added services.
Your clients don’t really care how long it take you to do something; they care about the value it creates for them; the peace of mind for having the compliance stuff done and the benefits of having a dashboard available of how the business is travelling Clock watching isn’t just limiting your income, it’s also downright selfish.
If you want to grow your income your going to help them (your SME clients) grow their business. When looked at it like that–from their perspective–it’s clear you’re not selling time. Instead, you’re selling a solution that is going to make an impact for your client and achieve some business objective.
So what’s stopping you?
Time! You’re too busy and maybe even too busy to have educated yourself on the latest tools. First however, you need to have that conversation. By having an in-depth conversation with prospects about what they’re trying to achieve and really listening to their goals, you can set value-based prices that are higher for you and also deliver more for the client, ideally, offering clients a menu of options to help them reach their objectives.
Getting hard numbers for your clients’ goals is best. Selling hours actually creates a conflict of interest; it puts you and the client on opposite sides of the table. If you’re selling hours, it’s in your best interest to take longer, to bill more hours. But your client is interested in getting solutions that work as promptly as possible, so if you’re asked what your fee is by a prospective client, you need to immediately ask the client a few questions; like “What are your needs?” “What are your biggest concerns?” “What accounting or financial issues are you facing that make you stressed?” Clients care about the value you create for them, so that’s what you should be asking them to pay for.
Of course, this approach doesn’t work for everyone. Hourly rates make sense for someone just starting out, someone with little experience and limited skill. But over time, you begin to outgrow the cost-plus pricing model of charging by the hour. So if you stay with that pricing model, you’ll find it very limiting.
But that’s not the only potential stumbling block to value-based pricing. How do you handle clients that push back against the idea of paying for value? What do you do if your skills aren’t broad enough to meet the client’s fundamental objectives? How can you change your image from a gun for hire to a collaborative partner in solving a client’s problems? And how do you price small jobs and routine maintenance?
For one, you will almost always be competing for the business, sometimes against cut-rate bookkeepers or services that offered inexpensive, do-it-yourself software solutions. Typically a new bookkeeper would try to explain why she was the better choice, but in the end, she may be excused for feeling that if she stuck to her rates, she’d lose out. And at this early stage, she badly needed to build a clientele. So she would often offer discounts, sometimes below her breakeven rate. She wouldn’t be happy about it, but it seemed to be the only way she’d stand a chance to get the business.