but first, define the result.
by jody padar
from success to significance: the radical cpa guide
we need to sell something other than time.
more on radicalism: why time and billing is over | quick tip: 7 ways to add value and charge for it | how timesheets stymie teams | eric majchrzak: taking risks with marketing | four rules for setting boundaries in a social and mobile world | blockchain: the basics
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we need to sell an outcome. we need to sell a result. we don’t need to sell time anymore.
the reason it’s so important that we don’t sell time anymore is that technology is making time disappear. if you’re using something that’s completely automated, and you’re using electronic downloads, or feeds, things that used to take you two hours now take you two minutes. you’re either going to have 25,000 customers or you’re not going to get paid any money, because how do you bill for two minutes?
if you aren’t going to measure utilization or sell by it, then why are you tracking time? just stop measuring it and manage your workload, your team and your profitability by product.
what our customers want is someone who understands their business, and can provide support and guidance. the ratios and the explanations don’t matter in the long run. they want peace of mind. they want to know that you are partnering with them, that you’re helping them be the best they can be.
i think old-school cpas get this, but i think they’ve always been caught in the weeds and haven’t had time to really explore this option.
we’ve always been considered the most trusted advisor. i don’t think that’s new for cpas, but i think what’s new is to really define what we’re selling. we’re not just selling customers a tax return, we’re just not selling financials, we’re selling a connection to improve their business. we understand the data, and we know how all the ratios and calculations work so that they can run their business better. because that’s what they want, they want a result. they don’t want to buy a tax return.
it’s a lot easier to sell something at a higher price that has tangible value than a tax return. nobody wants to pay for a tax return.
people switch accountants all the time. technology is changing and the old firms aren’t keeping up. firms that utilize technology at their core can do more for their clients because they have access to better data faster. it’s not that the old cpas were bad at their jobs, it’s just that they weren’t using the technology to help them to get them better information. what we hear repeatedly is, “wow, why didn’t my other accountant do this for me?”
quite honestly, it’s a simple answer: time. they didn’t have capacity because they were doing so much to just do the technical work, that they couldn’t add in the extra advisory on top of it.
but if you’re a cpa who can do that, you can help your customers plan and manage the present … and stay relevant in your role at the same time.
you’re already a consultant. now just charge for it. regularly.
aside from being the go-to advisor for your customers and staying relevant, you can charge for this knowledge. you can get paid for this because this is really where the value lives. this is where the transformation comes in, and this is what customers want. they’re dying for transformational help.
we need to get comfortable with these conversations. cpas always say, “oh, well, they’ll never pay for that.”
if you see your small business owners paying for all this coaching, what do you think coaching is? coaching is advisory.
we have access to the data, we have more knowledge in a customer’s file than any outsider, yet we haven’t figured out how to take that information and provide services around it, and offer more value to our customers.
to me it’s sad because we should be doing it. and yet, all these other professional consultants are coming in to do it because we don’t have the time to do it. well, if we automate our firms and have technology at our core, then we will have the time to dig into this. customers pay a lot for advisory, so it’s important to get comfortable with advisory. i ask questions that other accountants don’t because it’s all about getting new and better information.
and frankly, if you don’t have those conversations and you don’t ask the questions, then it’s hard to be helpful. and the data will be more and more accessible as ai and blockchain evolve. get in the ring now.
clients are paying for our expertise and our support. we know that the change is already happening, and the change means that they have new options when it comes to financial decisions. we just need to make sure that as we use new technologies, we do research on them. we need to embrace the new technology. we need to embrace the change so that we can move forward and keep that innovation going in our firms. because clients will pay for our expertise and support of their transformation, and they’ll pay for it more than they’ll pay for the data entry or the bookkeeping services. you need to create it as a separate service item and charge according for it. don’t give it away for free.
pre-billing: just say yes
when you move toward a fixed pricing model the easiest thing to do is pre-bill. it gives you the ability to grow because it allows you to increase your capacity before the work comes in. with the extra capacity you can make plans, get organized and facilitate change in your organization.
one of the biggest problems for old-school firms is that their staffing never matches their needs and it burns out existing staff. if you pre-bill and use subscription-based pricing, it’s much easier to manage capacity. i would even argue that the firms that have succeeded in growing have created the capacity before the growth.
this is a completely new way of thinking for a firm. will your customer accept a pre-bill? absolutely, because it is a fixed price.
but remember, not every customer is the right match for your firm. not every person who comes to your firm needs to become a customer. that’s ok. accept it.