asking the right questions proves critical in selecting the right-fit clients.
by jody padar
radical pricing – by the radical cpa
using subjective questions helps you assess what the prospective client considers valuable. this means understanding which services and solutions they see as having the biggest impact on their financial health. it also gives you insight into where they are hurting most in their business.
more: which clients should you scope? | perfecting the client needs assessment | create more meaningful kpis | five reasons to ditch timesheets for good | six steps to creating a standardized practice | value pricing requires defining your clients | stop selling time | three critical factors drive the value pricing trend | stop looking for talent that does not exist
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this process is time-consuming because it sets the stage for your relationship moving forward. take your time and collect all the data, documentation and subjective input so you can gain a holistic view of the customer’s current situation. let’s take a look at some of the questions you can ask and why they are important.
- how did they hear about you? what is their perception of your brand? these are important questions because they give you insight into your marketing and how your messages are being received. this also lets you know where they are in the sales process. if they know everything about you and have come in through strong word of mouth, they already know they want to work with you. but, if they only know a little bit about you, it’s your job to demonstrate your value and make the sale happen.
- are they currently working with anyone else? what is their current financial overview? these responses tell you how much pain they’re in and why they are coming to you. it’s good news if they are working with someone else because it means their financials are probably in pretty good shape. if they don’t work with anyone else and their financials haven’t been reviewed in a while, the solutions you can offer are more valuable.
- what led them to contact you? this is a good internal question for you to answer based on your experience with the client. measuring the amount of pain they’re in is an important subjective value to consider when it comes to pricing. are they in a lot of need and a lot of pain? or are they pretty comfortable just looking to tackle specific issues? if they come in disorganized and anxious about not filing a return for a few years, then you know their need is big.
- what is their approximate gross revenue? this will tell you approximately how much they can afford for your services and how complex their needs might be.
- how many people work for them, and what is their skill level? it’s good to know the level of talent they rely on. do they have degreed accountants on their team, or are they relying on a glorified office manager for their bookkeeping? all of this will help you understand their business, evaluate their needs and price your services.
- who in their organization acts as a financial confidant? this question helps you determine what level of work is needed and which skill sets are missing that you can provide. you want to know where else their information comes from. more likely than not, you will need to interface with those service providers. if no one else is involved, they’ll need to rely on you more heavily and will probably need a lot of communication and advisory services. if they have a cfo they rely on, then your job is easier. you just need to get the work done.
- ask for their most recent tax return. when was it filed? are they in compliance? do they follow the rules? did they have a huge refund? this is all good information to know. if they’re leaving a past firm, find out why. then, position yourself as the firm that values conversations, gets the compliance part in order and takes care of the real work of financial planning, tax planning or whatever else the client may see as valuable.
- ask for copies of their financial statements. check the health of their business to determine if they can even afford you. this is also an opportunity to demonstrate your value. provide actionable advice on their financial statement. maybe you recognize something in their balance sheet that raises questions. this is your time to start the conversation and show them how their statements tell a story about their business. in addition to evaluating their needs, this is part of the sales process.
- ask them for the prior year’s w-2s to see if they were filed on time and are well organized. find out quickly how easy it will be to get the data you’ll need. their organizational skills will tell you a lot about the kind of client they will be moving forward. being disorganized is not a reason to pass on a client, but you may want to adjust your pricing to reflect the added time you may require to accommodate their poor organization.
- do they have a process for 1099s? do they file by paper? electronically? do they even have current w-9s for their independent contractors? these questions give you a sense of how they run their shop and how much you could improve their situation.
- do they have an ar process? do they know how many of their accounts receivables are late? is timing on their ars something they think about? what is their typical time to bill or time to collect? asking these accounting questions gives you insight into how the business is run, but it also builds trust between you and the client before you’ve even started the job. ask them to tell the prospective client where your head is and how you will approach their business. often, an accountant will look at ar and know there are issues, but it’s never brought up in a conversation. in this process, you need to make everything a conversation so you can gauge their needs and they can recognize your accounting capabilities.
- where are they from a tax perspective? do they file in multiple states? do they have salt issues? you want to ask these questions even if you plan to outsource the state piece to a larger consultant. by doing so, you are demonstrating how you approach their business with a holistic strategy.
- what is their product management and workflow? this will help you know where you’ll start the job, how much work will be involved and an appropriate price point.
- do they use budgets and forecasts? just because they aren’t using them doesn’t mean they do not want and value them. maybe the forecasts they’re using aren’t working. this is a chance for you to harvest opportunities.
- what is their level of tech adoption? is there an opportunity to help them migrate to new systems? is there an opportunity for tech advisory? you are assessing where they are currently and where you can add value.
- who are their professional relationships with? are they looking to you for accounting alone or do they want the scope of your relationship to be broader? will they want to rely on you for attorney referrals and private wealth managers? is there an opportunity for estate planning? you are scoping your relationship with the client, as well the business, to see how much they want to rely on you for ancillary services and support.
- what is their average customer size? do a few large customers dominate their business? you can help them plan for the risk associated with larger customers. this is another opportunity to demonstrate your knowledge and your expertise in their business sector. you may even provide them with a bit of consulting intel to show them what a consultative relationship looks like. from this experience, they’ll understand the problem sets you’re equipped to deal with. in the future, they can come to you with certain problems, trusting you’ll have the solution.
you will want to gather all the information you can to gauge how in-depth the diagnostic process should be and whether you will charge them for it. this conversation is the moment to let them know if a larger scoping and assessment process is necessary and whether or not you’ll have to charge for the engagement.
finally, ask yourself how easy the process was and how enjoyable the time spent with the client was. your subjective experience is an important factor in pricing. was the client easygoing and kept the necessary information close at hand, or were they deflective and opaque? these attributes should be factored into the prospective client’s price point.
this is an incredibly vital stage of the pricing process. if your ears and eyes are open and you’re actively listening, you’ll return to the table with a service package and pricing representing exactly what the client wants at a price you are both comfortable with.