How advisory pricing is done - an example
Rebecca Mihalic and James Solomons are Directors of Aptus Accounting and Advisory and here Rebecca shares some insight into their pricing strategy.
We use Futrli for accounting services on a daily basis in our firm Aptus Accounting & Advisory and being able to do this has helped us sell our services as we know our pricing value proposition.
What a. It’s so easy when you know it inside out. You can rave about the benefits because you are experiencing them yourself. We don’t recommend any software to our clients that we don’t use and we do not have an account for or we are not experts in because then we won’t be able to share our knowledge with our clients.
We love guinea pigs
Once the alerts come through and you’re in contact with that client, the money side can fall away. Often, once a client is set up, they can come back to you constantly asking for more: ‘We need to update our budget. Can you run this scenario’, etc? Charge them a fee to tweak it, then you become the trusted advisor to help them make decisions for their services. If you’re helping them make money, then they will continue to pay for that!
Case study - the advantage of value pricing
I had a fee-resisting client who in the past questioned $2000/year. Thanks to the monitoring program we have put them on with Futrli they are now happy to pay $12000/year. That is massive growth for us but it is because they experience the value. This is where value based pricing can help you charge your clients.
We started by turning on Futrli in the background but didn’t need to inform the client about this. We could see there were cash issues, so we started monitoring them in the background for our own peace of mind. We had alerts coming through for cash flow problems because they weren’t hitting the targets we had previously talked about.
When the client started contacting us mentioning they were struggling to pay their tax bills we were more than ready to give them the help that they needed to get them through to the next stage. At this point, we explained the nature of these alerts and how we could notify them of future issues and nip them in the bud. The value of Futrli for their business at this point was so clear to them that it became complete common sense to get us involved in an advisory capacity.
And now?
He is now thrilled to know his cash flow and be able to do scenario planning in real-time: ‘what happens if I lay off this staff member? What happens if I do that extra project? What happens if I buy that other office?’
These are all questions we can answer together because the information is on hand and fact-based and we can use value pricing for our services.
Knock knock, who’s there? Extending your accounting services to a client
If a client only pays you a couple of hundred dollars a month for compliance work and uses your services on an ad-hoc basis; you cannot expect them to see you as their advisors. Let alone understand why they need you.
We recommend a drip-feed approach of constantly reminding your clients what you can do for them – bang that door down. As in the case study above, at some stage, if you have been in the background saying you can do it, they eventually say yes because they will see the need for it and you can charge them advisor fees.
Show them what Futrli can do
At Aptus, we don’t need to take time to prepare a forecast for our larger clients because we can just grab live data via Futrli and Xero to create a forecast in minutes. Then the next time we meet with them we can show them what we predict and where we can take them this year, based on last year. ‘Would you like us to save/make you an extra $30,000? Do you want to save on tax? Or what if you do this here?’
So when we put the forecast in front of them, we’re hoping to impress them, and to show them that they can see for themselves where they are going. When the client sees what we can do with Futrli, they are more than happy to pay for the added value of having us as advisors. This can improve the pricing methods of a business.
