“Your fee is too high. Can you do it for less?” We look at what best practices and strategies you need to defend your prices.
Research from the International Federation of Accountants shows that pressure to lower fees keeps coming up as one of the top challenges facing small and medium-sized practices.
But prospects and clients asking for a lower fee is part and parcel of the selling process, so why is dealing with people who haggle such a challenge?
Perhaps because, and this has been said before, selling doesn’t come naturally to accountants. Many aren’t confident enough to hold their ground when their fees get challenged. Others don’t believe in ‘blowing their own trumpet’ and think that their perceived expertise should do the talking.
In other words, they don’t know how to have the ‘value’ conversation with the client.
But this conversation is crucial. When you ensure the client appreciates the work involved, the quality of service that you will provide and the difference that you will make, both parties can ‘win’ – you get the fee you deserve, and they get value for their money.
Quote with confidence
But first, let’s state the obvious: you should never quote a fee before finding out enough about the client.
“Quote only by reference to the specific services the client needs and in the context of their past experiences,” says accountancy commentator and mentor Mark Lee. “Do they need just compliance or more? Are they aware of all the elements of compliance work they’re asking you to do? Have they been trying to do things themselves before? Have they paid fines and penalties? Also, what did they like or dislike about their previous accountant?”
Provide a full breakdown of what is included in the quote, too.
Natasha Penny, owner of Busy Books, prices all services individually and gives a clear price list to prospective clients. “They can then pick and choose what they want us to do, and which bits they may do themselves.”
Some prospects will still baulk at your fees at this point, but don’t budge.
Penny says: “We do not haggle. I believe we are worth what we charge and I’m not afraid to say this to clients.”
Agreeing to discount or reduce your prices not only cuts into your profit, it’s also a slippery slope to mediocre clients.
“We never lower our fees,” Lucy Cohen FMAAT, of Mazuma Accountants. “If price is someone’s number one criteria, usually they are not the right type of client for us.”
Make them see value
Instead, Cohen sells the tangible benefits of the services her company provides.
She says: “We do all the bookkeeping for our clients, which makes their lives easier because they don’t have to use software they’re not comfortable with. This also saves them time that they can then spend on their business.”
Most importantly, she quantifies the benefits so that clients can see the value more clearly. “I ask them what their hourly rate is and how long the bookkeeping and accounts work would take them every month. In most cases, I can demonstrate they’d be better off spending that time doing their own chargeable work, because it more than covers the fee we charge.”
There are emotional benefits, too: peace of mind and confidence.
Cohen says: “Our premise is ‘give us your paperwork, we’ll do the rest’, we make sure our clients don’t have to worry about anything. We build this trust by providing exceptional customer service – we try to take all phone calls immediately, or call back before 4pm the same day. We respond to all emails the same day, and all accounts work is turned around in five working days. We also contact all clients periodically to check in on them. All these things mean they know we’re getting the job done without them having to think about it.”
Clients also want to have confidence in your professional expertise.
“Our staff are qualified so clients have peace of mind that their accounts are in safe hands,” says Annette Powell MAAT, managing director of Zenza Limited.
What makes you different?
Why else should people choose you rather than someone else?
Natasha Penny’s firm stands out because of the personal touch they inject into their client relationships. “We send clients hand written cards and gifts for Christmas, and I’ve been known to get the milk and cakes when going out to work on site. Also, as a small business myself only in my sixth year, I relate to my clients on a personal level and share my learning experiences with them. This makes me a good accountant and I get great feedback about it.”
Busy Books has won several awards for their outstanding customer care. “Because of this, we come highly recommended and this usually takes precedence over our pricing,” Penny says.
But how do you respond when a prospective client says you are more expensive than your competitors?
“I run a fee comparison masterclass for sole practitioners to prove there’s no ‘going rate’ for their services, so they shouldn’t worry about what other accountants charge,” says Lee.
He adds: “The outputs you produce – accounts and tax returns – may be the same as what the client can get elsewhere. But you are special and different. You have a different background, experience and approach. You need to convey how the client will benefit from having you as their accountant rather than any other local accountant.”
Annette Powell is honest with prospective clients and tells them her firm is not
the cheapest around.
She says: “It’s not as simple as ‘They are X pound cheaper than you’, it’s about the quality of services. We’ve taken on many clients where someone ‘cheaper’ had done the bookkeeping and we were then brought in to rectify their mistakes. Also, it’s a false economy for the client if a ‘cheaper’ accountant does everything manually.”
Powell’s firm uses various apps to speed up their processes and lower their costs, the benefit of which they pass onto their clients (they charge on time-spent basis).
Penny has moved Busy Books’ CRM and client accounting & bookkeeping systems to cloud-based solutions in the past two years. “We’ve also been ready for MTD for over a year, most other accountants are only just thinking about it now.”
She was also ahead of the game when the GDPR came in. “Advising clients on GDPR isn’t one of our main services, but we’d invested time and effort in preparing ourselves to be able to offer this as a bolt-on.”
Iwona Tokc-Wilde is a business journalist.