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pricing, fees & billing rates

5 ways to get clients to accept a new pricing philosophy

don’t just anticipate questions, plan for them.

by august j. aquila
price it right

once your partners are sold on a new pricing philosophy, you will need to communicate it to your clients.

more: how to get partners to accept a new pricing philosophy | preparing to change pricing philosophy | ethical issues in pricing | how utility and value affect pricing | understanding the product pricing life cycle
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there are five ways to get clients to understand and accept the new pricing methods. each of these methods is discussed below.
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pricing, fees & billing rates

how to get partners to accept a new pricing philosophy

businessman putting a card with text "don't resist change, embrace it" in suit pocket5 common objections … and 5 reasons to change. bonus: an 11-point fee audit.

by august j. aquila
price it right

before you announce new pricing policies to your clients, it is critical that you and all the partners in your firm embrace the new pricing philosophy. the entire process begins with the following:

more: preparing to change pricing philosophy | 11 alternative pricing methods | applying cobb’s value curve to your firm | the four types of competition | marketing and the 5 p’s | why choose a marketplace orientation?
goprocpa.comexclusively for pro members. log in here or 2022世界杯足球排名 today.

  1. the firm’s willingness to make some changes
  2. an analysis of existing engagements and the economic impact that a different pricing strategy will have on the firm
  3. a review of how the firm is currently delivering and producing its services
  4. the firm’s overall relationships and communication style with its clients

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pricing, fees & billing rates

preparing to change pricing philosophy

businesspeople chatting around a water cooler5 factors to consider.

by august j. aquila
price it right

once you have decided to adopt an alternative pricing philosophy, what do you do next?

more: 11 alternative pricing methods | 12 pricing factors beyond cost | 13 questions about providing value | how demand affects pricing | how to shift from production to marketing orientation | how traditional fee methods hurt firms
goprocpa.comexclusively for pro members. log in here or 2022世界杯足球排名 today.

changing your firm’s pricing philosophy is really a three-step process. first, you need to consider several factors before suggesting a change. second, you need to get your partners to agree that it is a good idea, and third, you need to educate your clients so that they accept and understand the new approach.
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pricing, fees & billing rates

11 alternative pricing methods

woman in officewhen to use each, plus the marketing and operational perspective.

by august j. aquila
price it right

there are many ways to price professional services.

more: 12 pricing factors beyond cost | ethical issues in pricing | how utility and value affect pricing | understanding the product pricing life cycle | 4 ways a production orientation can harm a firm | price to get the maximum fee | 7 issues in partner retirement planning | is it time for a partner compensation checkup?
goprocpa.comexclusively for pro members. log in here or 2022世界杯足球排名 today.

alternative pricing methods in the legal profession have received much more attention than in the accounting profession. in fact, entire publications have been issued by the american bar association (aba) on this particular topic.
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12 pricing factors beyond cost

man with net chasing winged moneycost-plus is a starting point, not the end point.

by august j. aquila
price it right

accountants face only two major restrictions in determining their fees – the restriction against contingency fees under certain circumstances and the taking of commissions or referral fees.

more: ethical issues in pricing | applying cobb’s value curve to your firm | the four types of competition | marketing and the 5 p’s | why choose a marketplace orientation? | why value pricing? | solving underperforming or dysfunctional partners | the 3 types of partners you need
goprocpa.comexclusively for pro members. log in here or 2022世界杯足球排名 today.

we have also seen that for the most part, accountants bill their time based on a cost-plus method.
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pricing, fees & billing rates

ethical issues in pricing

august aquila: "if someone is going to be unethical, it will not be a result of the billing method he or she uses."specifics of rules 302 and 503.

by august j. aquila
price it right

in the old days you could go into a shoe store and purchase sneakers or gym shoes. nowadays, there are tennis shoes, running shoes, cross trainers, aerobic shoes, basketball shoes, soccer shoes and the list goes on and on. perhaps the billable hour paradigm soon will go the way of the gym shoe.

more: applying cobb’s value curve to your firm | 13 questions about providing value | how demand affects pricing | how to shift from production to marketing orientation | how traditional fee methods hurt firms | 6 questions for planning your succession | underperformers come in many shapes and sizes | 6 focuses for managing partners
goprocpa.comexclusively for pro members. log in here or 2022世界杯足球排名 today.

accountants need to realize that in pricing their services, one pricing method will no longer do. as with athletic shoes, accounting and consulting services can be priced in many different ways. this post will explore ways for you to move away from the hourly billing paradigm.
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client accounting services

applying cobb’s value curve to your firm

hand turning a knob up to the maximum with a dial where it is written "value added"“pricing – that is, fee-setting – is above all a marketing decision.”

by august j. aquila
price it right

there is a completely different way of looking at value and it is tied into the type of accounting or consulting work that is available in any given market and the type of accounting or consulting work that your firm provides.

more: 13 questions about providing value | how utility and value affect pricing | understanding the product pricing life cycle | 4 ways a production orientation can harm a firm | price to get the maximum fee
goprocpa.comexclusively for pro members. log in here or 2022世界杯足球排名 today.

nearly 30 years ago william c. cobb wrote “the value curve and the folly of billing-rate pricing,” providing a great deal of insight into the concept of pricing and value. many of the ideas that follow are based on cobb’s article.
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pricing, fees & billing rates

13 questions about providing value

hand moving triangle along beam to indicate balance between price and valuerate both yourself and your firm.

by august j. aquila
price it right

there are things that you can do to help your clients perceive a higher value in you and your services. these are not activities that will immediately increase your fees, but if done consistently, they will reinforce to your clients the added value that you bring to them.

more: how utility and value affect pricing | the four types of competition | marketing and the 5 p’s | why choose a marketplace orientation? | why value pricing?
goprocpa.comexclusively for pro members. log in here or 2022世界杯足球排名 today.

innovative firms realize that it takes more than just a seminar or newsletter to provide added value to the client. everything revolves around the personal relationship that ultimately develops between the professional service provider and the client.
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growth strategies

how utility and value affect pricing

man's hand drawing upward arrow with words "value for money"shift the focus away from the service provided, and think about the 8 kinds of utility.

by august j. aquila
price it right

if indeed we believe the phrase “perception is reality,” then it is the client’s perception that is the only reality. ultimately, only a client can determine the value of your service, that is, the fee he or she is willing to pay. if the client perceives that he or she has received a benefit there will be some perceived value attached to the service.

more: the four types of competition | how demand affects pricing | how to shift from production to marketing orientation | how traditional fee methods hurt firms
goprocpa.comexclusively for pro members. log in here or 2022世界杯足球排名 today.

consciously or unconsciously, the client’s determination of the correct fee for a service is related to two concepts: utility and value. let’s look at these two concepts and how they apply to setting prices.
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the four types of competition and 6 ways to make your firm stand out

first steps in developing a pricing strategy.businessman drawing one arrow longer than others

by august j. aquila
price it right

after demand, perhaps the next most important factor affecting a cpa firm’s pricing policies is competition.

more: how demand affects pricing | understanding the product pricing life cycle | 4 ways a production orientation can harm a firm | price to get the maximum fee | 7 issues in partner retirement planning | 5 ways to keep your edge | the toughest job in the world: managing an accounting practice | how to become the firm of choice
goprocpa.comexclusively for pro members. log in here or 2022世界杯足球排名 today.

as clients and prospects become more educated about cpa firms in their market, more sophisticated about the services offered and more cost-conscious, pricing becomes more important and more firms are beginning to stress the price of their services, especially in competitive request-for-proposal situations. intensive price competition in most professional service industries is now a way of life, from hotels to airlines, from car rentals to telecommunications and from law firms to cpa firms.
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growth strategies

how demand affects pricing

word cloud related to demandone word: elasticity.

by august j. aquila
price it right

economists define demand as a schedule of the various amounts of an item (a good or service) that buyers will purchase at different price ranges during a given time period.

more: understanding the product pricing life cycle | marketing and the 5 p’s | why choose a marketplace orientation? | why value pricing? | solving underperforming or dysfunctional partners | the 3 types of partners you need
goprocpa.comexclusively for pro members. log in here or 2022世界杯足球排名 today.

according to the theory of price elasticity of demand, there is an inverse relationship between price and the quantity of an item bought. in other words, as the price of a service decreases, the quantity demanded increases and as the price of a service increases, the quantity demanded decreases.
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marketing & sales

understanding the product pricing life cycle

chart of a product life cyclewhich of the 4 phases do your products fall into? here’s how to tell.

by august j. aquila
price it right

there is an important concept in marketing that provides companies with tremendous insight as to what they can expect for their products or services in the marketplace. it’s called the product life cycle and, sooner or later, all products and services will go through the complete cycle. as they do, several external and internal factors change.

more: marketing and the 5 p’s | how to shift from production to marketing orientation | how traditional fee methods hurt firms | 6 questions for planning your succession | underperformers come in many shapes and sizes
goprocpa.comexclusively for pro members. log in here or 2022世界杯足球排名 today.

the accounting industry and the services it provides are no different. the figure above displays the life cycle of a typical service or product.
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pricing, fees & billing rates

pricing strategies: the real world vs. the cpa world

businessman and tablet with the word "pricing" above.7 types and how they work.

by august j. aquila
price it right

pricing in the real world is much different than in the accounting profession.

more: marketing and the 5 p’s | how to shift from production to marketing orientation | how traditional fee methods hurt firms | 6 questions for planning your succession | underperformers come in many shapes and sizes | 6 focuses for managing partners | 10 steps to transitioning to a new mp | what managing partners should be doing
goprocpa.comexclusively for pro members. log in here or 2022世界杯足球排名 today.

usually, wholesalers and retailers set their prices by using markups as the product moves through a distribution channel. producers or manufacturers usually set a list price. think of the manufacturer’s suggested list price on the window of a new car. car dealers will use various methods to price the new vehicle.
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