Pricing tells a story
I recently attended a friend’s 40th birthday party at a high-end resort in Mexico. While it was a great experience, my wife and I both sensed something was missing. The trip would have been fine if we had stayed at a “normal” hotel. But, based on the ultra-premium price the hotel charged us, I was disappointed in the food and especially the level of service. The hotel didn’t necessarily do anything wrong. At the same time, my expectations were sky-high for the price I was paying and to say the least I was underwhelmed.
In any type of service business, there’s an unspoken agreement: Customers/clients will pay higher prices, and service providers will take very good care of their customers/clients with exceptional experience. This social contract applies to professional services, too.
CPAs are always telling me: “Our prices are too low; we should be raising our prices.” Most of the time, I agree. Just know that if you start charging premium prices, you can’t expect clients to be satisfied with the same level of service. You’ll have to up your game. If you don’t, that’s a net negative value for your clients. What used to be reasonable is no longer meeting client expectations.
What’s your pricing story?
You’re telling a story when you position yourself as a premium service provider. Being a premium service provider can be great. It gives you a higher margin and you can hire great people. But again, you must deliver a higher level of service.
What might those levels be?
- More dedicated staff;
- Better technology for clients;
- A better-trained team;
- More attention from the partners; and
- More touchpoints with clients throughout the year.
Higher pricing is better than the alternative — dirt cheap. You don’t want clients telling everyone they use your firm because you’re cheap. Cheap is a terrible business position because it’s essentially a race to the bottom. If all you’re providing clients is the bare minimum, you’ll never be able to charge more.
Proactive solution
When people get used to staying at higher-end hotels, it’s hard for them to stay anywhere else. They get used to a certain level of attention and service as the concierge and staff learn to anticipate their needs before they ask for something. When you can pamper guests like that, they’ll keep coming back for more. They’ll tell all their friends about your establishment and will be more than happy to pay for the privilege of staying with you. As a CPA, you can take the same approach with your clients. You don’t need to put mints on the pillows or carry a specific bottled water (nice, bottled water doesn’t hurt, though). Learning to anticipate your clients’ needs — and filling them — will go a long way toward being perceived as a premium service provider.
You can learn to anticipate your clients’ needs by having agenda-driven calls throughout the year, not just during tax season. The idea is to anticipate their needs and issues before they call you in a panic. For instance, before year-end, you could call your client and say, “Based on some of the activity you’ve had this year, we’re anticipating a higher tax bill than we initially thought. Let’s talk about ways to handle this.”
Isn’t that better than waiting until April 13 to inform your client that they’ll owe five times more than they thought they would? Ouch! Clients don’t like being blindsided by bad news any more than they like paying a big tax bill. Just like a good hotel concierge anticipates guests’ needs, clients want their CPA to anticipate outlier events like unusually large tax bills and give them a heads up well before Tax Day.
Reactive solution
I know you can’t get out in front of every single issue. Inevitably, things will come up with clients that you didn’t anticipate. But if it’s taking you more than 24 hours to respond to important client calls or emails, you need to do better if you want to remain their CPA.
Even if you can’t respond to the client personally, you need to have a well-trained member of your staff respond to the client within 24 hours of receiving their communication. Your staff member doesn’t necessarily need to have the answer, but he or she can reassure the client that their question was received, that you’re working toward the solution, and that you’ll respond to them by a specific date. Whatever you do, don’t let a client email sit in your inbox for two or three days without acknowledging it.
And here’s a little secret: The more proactive you are about anticipating a client’s needs, the less reactive you’ll have to be.
So how do you make sure you’re always responding quickly and still get your work done? Have a staff person consistently monitor your inbox looking for important client emails. Doing so will give you and your team breathing room to do your best work by identifying those emails and responding promptly. It’s all about setting expectations. Make sure your non-partner level team always has enough capacity to respond to client emails promptly. If they can’t, you must either hire and train more staff or free up your existing team from other administrative duties. Otherwise, you’re not providing the premium level of service you’re charging for, and clients are not happy. Trust me, word gets around.
Premium service providers anticipate what their clients might be running into before it happens. That’s what clients are paying for. For more about providing premium service, see my article Adopting a Ritz Carlton mentality. What’s your take on pricing and service? I’d love to hear from you.
