1 / 68

Transform your Pricing

Transform your Pricing. Pragmatic and Professional Strategies and Solutions to Help you Grow your Business More Effectively. Shannon Vincent, CPA Managing Partner ReNew Group. Session Schedule. Leadership and Firm Growth Strategic Planning and Key Profit Drivers

kiona-oneal
Download Presentation

Transform your Pricing

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Transform your Pricing Pragmatic and Professional Strategies and Solutions to Help you Grow your Business More Effectively Shannon Vincent, CPA Managing Partner ReNew Group ReNew Group 2007 www.renewgroup.com

  2. Session Schedule • Leadership and Firm Growth • Strategic Planning and Key Profit Drivers • Marketing, Selling and Growth • Value Pricing – Myth or Reality • Team Member Expectations: Breakdowns and Breakthroughs ReNew Group 2007 www.renewgroup.com

  3. Today’s Agenda • Questions from Last Week • Why Value Pricing • New Practice Equation • Client Selection • What Clients Want • Implementation ReNew Group 2007 www.renewgroup.com

  4. Desired Outcome • Foundation for increased pricing and profitability ReNew Group 2007 www.renewgroup.com

  5. Review from Last Week • Practice Growth Checklist • UpFront Contracts ReNew Group 2007 www.renewgroup.com

  6. Some Facts on Value Pricing ReNew Group 2007 www.renewgroup.com

  7. Truths on Value Pricing ReNew Group 2007 www.renewgroup.com

  8. VP Thoughts • We are all not good at pricing • Places VP may be appropriate -Individual tax returns that are high value or straight forward -high net worth bundled services -financial review for businesses • Place where you may want to be cautious -audits -if you aren’t sure of how long it will take to produce tax return or f/s Value Pricing is not for everyone ReNew Group 2007 www.renewgroup.com

  9. New Practice Equation ReNew Group 2007 www.renewgroup.com

  10. ReNew Group 2007 www.renewgroup.com

  11. Let’s look at your firm in a different way ReNew Group 2007 www.renewgroup.com

  12. ReNew Group 2007 www.renewgroup.com

  13. This guy gives us a clue… ReNew Group 2007 www.renewgroup.com

  14. The ‘old’ practice equation is obsolete? ReNew Group 2007 www.renewgroup.com

  15. The ‘old’ practice equation OBSOLETE? People power Prod’y Rate Revenue x x = ReNew Group 2007 www.renewgroup.com

  16. The new practice equation Note: not revenue, but PROFIT Intellectual capital Price Effective-ness Profitability x x = ReNew Group 2007 www.renewgroup.com

  17. Intellectual capital • Human capital Team members Key volunteers ReNew Group 2007 www.renewgroup.com

  18. Intellectual Capital • Social Capital Clients, suppliers, vendors, networks, referral sources, alumni, and reputation ReNew Group 2007 www.renewgroup.com

  19. Intellectual Capital • Structural Capital everything else ReNew Group 2007 www.renewgroup.com

  20. Price • Price intellectual capital based only on the value to the client • NOT the internal cost of Human Capital • NOT on the profit desires of the owners of the firm • And certainly NOT on the labor hours involved ReNew Group 2007 www.renewgroup.com

  21. Effectiveness • Takes precedence over efficiency • Understands that imprecise measurements of the right things are infinitely more valuable than precise measurements of the wrong things • A business does not exist to be efficient, it exists to create wealth for its customers • Workflow – web-based workflow and communication tools – Office Systems ReNew Group 2007 www.renewgroup.com

  22. Take Away • The rules of the game have changed • Focus on creating value and selling your Intellectual Capital ReNew Group 2007 www.renewgroup.com

  23. Breaking the link between timesheets and pricing ReNew Group 2007 www.renewgroup.com

  24. You are ABSOLUTELY what you charge for And you will never receive more than you think you are worth ReNew Group 2007 www.renewgroup.com

  25. Four crucial points • The client buys expectations • The client buys results • The client NEVER buys hours • Therefore you do NOT sell time ReNew Group 2007 www.renewgroup.com

  26. Relying on Timesheets is destroying your worth For too long we have let our price be largely—or solely—determined by the antiquated billable hour paradigm. It is time to relegate that paradigm to the ash heap of history, because it is not at all relevant in an intellectual capital-based economy Ron Baker ReNew Group 2007 www.renewgroup.com

  27. Here’s a way to get started • Start thinking now about PRODUCTS not services • Then turn those products into experiences • Then price them with NO regard for hours • Value is always (and only) in the eye of the customer ReNew Group 2007 www.renewgroup.com

  28. How to’s • Positioning – easier to do with prospects • FPA’s • Testing • Analyzing the numbers ReNew Group 2007 www.renewgroup.com

  29. Questions ??? ReNew Group 2007 www.renewgroup.com

  30. Client Selection ReNew Group 2007 www.renewgroup.com

  31. Two Key Questions: • Are you serving people that you don’t like? • Are there clients that you serve unprofitably? ReNew Group 2007 www.renewgroup.com

  32. Why client selection is important • Pricing • Cultural issues • Bad clients drive out the good clients • Limited number of resources • Drain on you and your team • Quality of life / fun factor • Profitability • Value of business • Exit strategy ReNew Group 2007 www.renewgroup.com

  33. Services • How often does this client meet with their existing service provider? • How certain are you that you will get the opportunity to cross-sell additional services? • How sophisticated would you say this client is? • What is the state of their records and accounts? ReNew Group 2007 www.renewgroup.com

  34. Billing • Did the client spend a long time focused on cost and fees during the interview process? • What is the likelihood that you could generate at least $10,000 in fees per year from this client? • How would you describe the client’s level of profitability (income-potential)? • How much growth has the client experienced in the past three years? ReNew Group 2007 www.renewgroup.com

  35. Opportunity and timing • How would you describe the potential for future growth for this client? • From what you know of this client, how likely is it that you will see a stream of referral work from them? • What potential exists to charge premium prices if the client needs their work done in your busy period? • How open is the client to working with your team members as opposed to always requiring partner access? ReNew Group 2007 www.renewgroup.com

  36. Values and leadership • How much appreciation do you believe this client would show for your expertise and the value you provide? • What is your perception of how loyal this client would be to your firm? • From your discussions with this client, how ethical and honest do you believe they are? • How well do you believe the client would grasp opportunities with a positive mindset, determined to make the most of them? ReNew Group 2007 www.renewgroup.com

  37. Quantitative • Minimum Fees • Minimum Size – Profits, Revenue, Employees ReNew Group 2007 www.renewgroup.com

  38. Questions ??? ReNew Group 2007 www.renewgroup.com

  39. Take Away • Client Selection is critically important • Must be a part of the firm – Institutionalize Client Selection • Use these questions as a basis for developing your own Client Selection Criteria ReNew Group 2007 www.renewgroup.com

  40. What Your Best Clients Want ReNew Group 2007 www.renewgroup.com

  41. Client Advisory Board • 8-10 A Clients • Structured questions, process and follow up • Constructive ReNew Group 2007 www.renewgroup.com

  42. What Your Best Clients Want • Business • Leadership • Regulatory/Professional • Experience and Service • Educational and Communication *Feedback, Solutions, Questions ReNew Group 2007 www.renewgroup.com

  43. Market feedback: Business • I do not understand all the technical aspects of accounting; IRS code, SAS, FASB and frankly don’t really need to learn that stuff • I don’t know what you know • My accountant doesn’t understand what I do • Cash flow is a concern • I’m always focused on increasing profitability • I could be better at planning and goal setting ReNew Group 2007 www.renewgroup.com

  44. Solutions: Business • Speak the business owner’s language • Obsessively learn about your client’s business and their key issues • Focus on Cash Flow • Focus on Profit Improvement • Have annual meetings with clients that focus on strategic and financial matters (historical and future) ReNew Group 2007 www.renewgroup.com

  45. Questions you will ask: Business • Do you have a planning process that includes targets, budgeting and cash flow? • What are your critical success factors? • What things must you get right in your business? • How happy are you with the profitability of your business and your return on investment? • Do you have a strategic plan that you adhere to and update on an annual basis? ReNew Group 2007 www.renewgroup.com

  46. Market feedback: Leadership • I want an accountant with personality and a sense of humor • I wish my accountant would acknowledge their own challenges • There are too many moving parts in my business, personal and legal affairs. I can’t keep track of it all • It is lonely at the top and business life is difficult • It is difficult at times to see the forest through the trees ReNew Group 2007 www.renewgroup.com

  47. Solutions: Leadership • Personality/Sense of humor – be human, let your guard down at times • Be the cornerstone of all their financial affairs • Let them know you think about them when you are not together • Show them the big picture – industry research, benchmarks, trends (get involved in their trade association) • Watch and follow their competitors • Organize them with calendars, milestones, targets and communication points • Know your own challenges ReNew Group 2007 www.renewgroup.com

  48. Questions you will ask: Leadership • What is your favorite sports team? • What do you do for fun? • Who do you consider your right hand for your financial affairs? • What keeps you awake at night? • Tell me about where you see your company and industry in the next 3 years • Would you be interested in talking with business owners similar in size but not competitors? ReNew Group 2007 www.renewgroup.com

  49. Market feedback: Regulatory/Professional • I expect my accountant to take the high road • I don’t want my accounting firm to be an extension of the IRS • Keep me out of the news • Protect my assets ReNew Group 2007 www.renewgroup.com

  50. Solutions: Regulatory/Professional • Be independent and objective • Don’t be an extension of the IRS • Put yourself in their shoes…if X then Y • Assess risk, review their insurances and financial plan • Review their privacy policies, data security ReNew Group 2007 www.renewgroup.com

More Related