plus 11 ways to increase it.
by rob nixon
the average project value is not the average fee per client. the average project value is where you average all of your invoices over the year.
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if you have three invoices for the one project then that is one invoice only. you might call a project a “job” or “task” for the client. for example, annual compliance is one project. a budget/cash flow forecast is a project. a restructure is a project. a company due diligence is a project.
what is the average for you?
once you know your average (and you do want to increase it) you can use some or all (or others) of the checklist below to increase the average project value:
- realize your services are worth more.
- find the courage to charge more.
- increase all prices immediately.
- offer additional services at the time of buying.
- have a standard menu of services and price list.
- price in advance, not arrears.
- articulate the value of each project eloquently.
- get rid of low-margin services and low-margin clients.
- improve your language and sales skills.
- target more profitable clients and services.
- use value-based fees – not time x rate!
you are doing the project anyway so if you can get more margin out of it then the new margin is free and clear profit.
projects per year
as you work out the average project value you also work out how many projects your clients are buying each year. or another way to think of it is how many products do they buy from you each year. i remember having lunch with the ceo of a major bank. we were talking about retention of customers for the bank. he said something that really resonated with me. he said:
“if we can get a customer to buy four products from us then we will keep the customer for a very long time. if they only buy one or two products then it is easier for them to leave.”
same for your business. if the client only buys one product from you (say, annual compliance) then they are not really “wedded” to you. in internet speak, the stickiness is just not there.
the vast majority of your clients have unmet needs and your job is to find out what they really need and offer it to them. when i shifted accounting firms i went from an average of 1.5 projects per year to six with the new firm.
there are many ways to do this. here is yet another checklist:
- productize your existing services into a definitive list – with prices.
- create new services – leverage off other firms.
- lower the barriers to doing business – free phone calls, emails.
- build relationships by having a communication schedule.
- educate your team to find opportunities.
- think a minimum of four products per client.
- work out what they haven’t got on your client/service matrix.
- constantly market services through all channels.
- have a service theme for the month/quarter.
- have your “intellectual property selling opportunities” radar on at all times.
- find out what the clients really need – do not prejudge.
- offer your services – they can only say no!
the simplest business model in the world is “find the need and fill it.” i think it is your duty of care to offer every service you have to every client you have. who knows, some might buy the additional service. i also think you should continually innovate and invent new products and services.
the number of projects a client buys from you is one of the easiest in the new growth equation. there is already a high level of client loyalty and trust and they have unmet needs. you just have to ask the right questions!