you still can add on other services.
by jody padar
radical pricing – by the radical cpa
a tiered service offering should provide your clients with three options. according to experts in mindset and pricing, if you provide three options, people will usually choose the one in the middle. that’s the one you are aiming for them to buy.
also, don’t forget that people buy the payment, not the car. there’s an entire mentality around monthly pricing. if you tell a client it’s a $24,000 engagement, they will balk. they would rather pay $2,000 a month than the full amount all at once. of course, some clients will offer to give you the full engagement amount up front if the price is discounted. from a cash flow perspective, you can offer a small discount if a client is willing to pay this way.
creating your service packages is not a one-size-fits-all activity. there should be different tiered service options for each client persona. it is also important for clients to know that they can upgrade or downgrade their service level when needed.
let’s look at a sample of a tiered service option. in this case, they are titled insightful, intuitive and visionary.
the following is a breakdown of each tier:
the insightful tier. this is your most basic tiered offering. if you think of an airplane, clients who opt for this option are your coach class travelers. they just want to get to the destination with no frills attached. the services in this option will keep them on the rails and compliant. there will be a quarterly quickbooks online check-in and any other services they absolutely need to run their business successfully. you want to take a time-conservative approach with these clients. they are paying the least so you want to make sure the services provided in this package eat up the least amount of time while still providing a perfectly accurate service.
services in the insightful tier will include:
- real-time access to their financials. this will be provided via cloud accounting.
- monthly financial reporting. at the end of every month, everything will be reconciled. they can pull a report or have it emailed to them or made available through a portal.
- quarterly conversations. included in this package is a guarantee of four conversations per year. you’ll have to determine how often you will communicate with them in the interim. limit the amount of communication in order to maintain the scope of services all parties agreed to.
the intuitive tier. this is the package you should really focus on because this is the one clients will likely buy. it will include the compliance elements and then will be built to fit specific needs and asks. you want clients who select the intuitive tier to receive all the services they want and need. this tier will include all obvious services that apply to their needs. for example, if the client wants cfo advisory services, you should include them in the intuitive package.
baseline services included in this tier:
- all the basics found in the insightful package
- support when they need it
- tax return
- unlimited access to you via email/zoom/phone – do not worry, no one calls their accountant every day!
if a service is not obvious or if it hasn’t been specifically requested by the client, it will fall into the highest visionary tier.
the visionary tier. this tier will include all the services you believe they need and would benefit from but don’t think they would buy. take all the information you collected through the client assessment and scoping process and apply it to create a service offering with the most proactive approach to financial planning and business development.
keep this tier true to its name – it’s meant to include visionary, out-there services reflecting your understanding of the hurdles their business will face. this tier is everything from the previous two and then some. value-priced engagements in this tier will likely be anywhere from $2,000 to $5,000 a month depending on your firm and price points. depending on the size of your firm, you may even be selling this package for $10,000 a month.
a la carte add-ons. in addition to tiered services, you can also offer a la carte options. an example would be a fixed asset review to be scoped and priced separately. depending on the size of your firm, you may also offer value-priced advisory services as a separate engagement. maybe your firm does r&d credits. that service would likely be a one-time engagement, priced on value outside of the monthly, recurring services. the option of a la carte services gives your clients wiggle room in their service tier. they have options to get more than what’s offered in their tier without needing to jump to the next one.
additional service offerings
services you offer in addition to your tiered service packages are one-off services clients occasionally need in addition to their monthly and recurring services. these services are sold to the client as a solution to a problem and as a separate engagement, and they are ideal for letting your client know the full breadth of your offerings. if you see in their business financials an area where they’d benefit from one of your services, absolutely let them know. the client may not buy the service immediately, but perhaps a few months down the road they will circle back and continue the conversation.
the additional services conversation doesn’t have to be daunting. focus on the added value of the service and why you think the client would benefit from it. if they understand why they need the additional service and the problems it will solve, they’ll likely engage your firm to keep their financial services under one roof.
if there’s a client you enjoy working with and strongly believe they would benefit from an additional service, you could offer to initially take on the additional work for no charge so they can learn its value. don’t do this often but, rather, on a case-by-case basis if you feel a client needs an extra incentive. doing free work for one quarter may help you, in the long run, to build out your services and generate positive word of mouth.
a hidden speed bump in the added services conversation occurs when a client already thought something was included. this is usually because of a lack of technical specificity when going over services. a good example would be the difference between a small sales tax audit where you need to provide a written response and a larger, days-long sales tax audit going through everything related to sales taxes. both are sales tax audits but involve very different activities and should come with very different price tags. explain the difference between these two sales tax audits, otherwise, your customer will not know the difference.
firms often have people, referred to as harvesters, charged with “harvesting” more work from existing clients. these are typically managers familiar with client files, who are adept at marrying client needs with your firm’s service offerings. you don’t want to sell services the client doesn’t need, but often clients do not understand the amount of financial heavy lifting your firm can do. it’s always painful to learn clients outsourced tasks to various third-party providers simply because they didn’t know keeping it under one roof was an option.
in your new client-centric, up-front pricing model, you should be having quarterly conversations with clients where you go over current financials, perhaps do some tax planning and address any other concerns they may have. these conversations are opportunities to recognize additional service needs. harvesters should be skilled at asking questions to uncover such needs.
what do harvesters need to know to be successful:
- all the services you provide
- how to add value
- how to look at financials
- how to communicate value
- the client file and how to answer questions
- when to step back and ask a partner for help with pricing, scoping and identifying an opportunity
when it comes to services provided, here’s a simple example of additional services you offer clearly spelled out for easy understanding:
you should also educate staff accountants and managers on proactively identifying client needs and having conversations about additional services. additional services provide an opportunity for self-motivated team members who enjoy connecting with clients and growing relationships.
let’s go back to the three-tiered service package example with intuitive, insightful and visionary levels. occasionally a client will sign up for the insightful package and request a service from the visionary offering be included. this is usually either instead of or in addition to services offered in the insightful package. you can work the requested service into the insightful package instead of another service or engage it separately, depending on its complexity.