value pricing requires defining your clients

choose your client personas wisely.

by jody padar
radical pricing – by the radical cpa

one drawback of the hourly pricing model is its one-size-fits-all nature. every client is charged the same rates per hour, with the only difference being the number of hours each uses.

but the world isn’t made up of identical people working in identical businesses and driving identical cars to and from their identical homes. thank goodness!

more: how value pricing impacts your employees | six steps to start value pricingwhat are you selling?three critical factors drive the value pricing trendaccounting disruptors are heading your way … with deep pockets | the convergence of trends makes pricing changes imperative | stop looking for talent that does not exist | advisory work must be priced by value, not hours
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clients are as different as you or me, but we can group them into buckets called personas based on shared values or traits. in a client-centric firm, it helps to understand these basic personas so you can more efficiently meet each client’s needs. you probably have a handful of personas in your firm right now. you just haven’t seen them as a grouping because, in your bill-by-the-hour model, it doesn’t matter who they are.

once you understand the concept of personas, you can start building service packages around each persona’s unique needs and then further customize those service packages to meet the specific needs of individual clients.

defining personas in your firm will set a blueprint for your clients, the services in demand and what reasonable packages will look like. each package should cover financials, advisory services and customer service support needed to make a difference in a client’s business. you know you’ve nailed a client’s persona when you deliver a package they absolutely adore.

though traditional services have always been offered “a la carte,” service packages and options are built for each unique persona. for example, you’d have a different package for a small business persona compared to a large construction company. while they may both need a tax return, their needs, goals and the packages you create to serve them are different.

productized services built for a persona are an important way to streamline and economize giving your clients a great customer experience and great deliverables. at the same time, you should take pains to educate your staff on ways to communicate with different personas.

there could be hundreds, if not thousands, of personas accounting firms could serve. a persona really is customized to fit the client profiles your firm aims to serve. to give you a better idea of what a persona is, the following are two examples i used in my practice: the real estate guy and joe small business.

a look at the “real estate guy” persona

he is constantly on the go and typically in his car. his business is dynamic. he may flip properties quickly or take some time to develop them. he may even have rental properties. because he always buys or sells, his accounting needs are based on gains and losses. he may even be deferring gains or doing exchanges. as a result, his tax needs will be significant.

as a real estate investor, he’s highly leveraged, and his financial planning needs will be very different from those of people with consistent income. this guy may have one great sale followed by a dry spell that could last a quarter or two; he never knows. real estate guy is also almost always pretty well connected. if you delight him, you’ll likely get his real estate buddies as clients, too.

your job as the accountant is to know how to have all the right talking points and questions ready for the real estate guy, regardless of the conversation. be prepared to really get into the granularity of the industry. if you know the persona, you will also know how you and your team should communicate with him. don’t be offended when conversations happen in 15-minute snippets while he’s in the car. you must also be ready to pick up the call and be available to work around their erratic schedule. real estate personas also like getting through to their accountant when they need to talk. unlike other personas, he doesn’t have the luxury of being consistently at a desk and readily available for calls.

who is “joe small business”?

he could be a plumber, attorney, retailer or any of the hundreds of highly skilled practitioners in his field. he’s technical and specific but typically insecure about his financial and business knowledge. he is also hard to get a hold of. there always seems to be an extra person between you and him. so, you may spend a lot of time talking to a spouse or an office manager. this is important when considering the scope of the conversations you will have with the small business owner versus their intermediary. it can also affect your ability to communicate important information promptly.

joe is typically more concerned with maintaining the status quo than rapidly growing his business. he may have previously worked for someone else and is thrilled to control his own destiny now. generally, you’ll find joe small business is happy doing what he does.

in terms of what he wants from you, he likes responsive service. he wants to be charged fairly and values peace of mind. he dislikes calling a million times and not getting a response. he dislikes not being able to get you when he needs you. he trusts information from you, other professionals and local people he knows.

one of joe’s key needs is compliance. he needs a tax return, maybe a financial statement for the bank, but ultimately his goal is lower taxes. he wants advisory services, but he may not want to call them advisory services. he wants you to give him a little insight into his business and tends to treasure data showing how he compares to others in his industry.

although he treasures peace of mind, joe small businesses may try to get away with everything. he’ll always reach out with random ideas of what’s deductible and hates finding out he missed some new tax credit he may have been eligible to receive. often, he gets caught up in immaterial issues, and you have to be able to get him out of the weeds.

you’ll also find joe relying on you for technical and financial input. you may become his de facto cfo. because you have other clients with other agendas, you need to be aware of how much energy it takes to manage joe and be realistic about what you can give him.

choose your personas wisely

as an accountant, you’ll want to understand the quirks of every persona you’re considering, along with their accounting needs, so you can determine who is right for your firm. maybe any persona with an erratic schedule is too disruptive for you. or you could find the personality traits of personas in law firms and medical practices difficult. or maybe the laid-back nature of creatives is more your style. it’s all about finding the right personas for your temperament, your skills and your firm’s values.