This week is devoted to a four step framework to demonstrating your value.
We can’t expect to deliver value until we can first demonstrate it.
1. Commit To One Thing
A few weeks ago, a question came in about demonstrating our value to clients and prospects.
First, the value of some services is easier to ‘prove’ or demonstrate than others.
And many firms stick to the easier-to-prove-value services because they don’t have a framework to craft, market and sell an offer.
This framework’s first step is committing to doing one primary thing.
Here’s one way to dissect a spectrum of valuable services:
Improving and increasing profits are different approaches.
Improving profitability is improving your profit margin, driven by more efficient operations and expense control.
Increasing profitability is increasing your profit amount, primarily driven by more revenue.
Both approaches are effective ways to support a business.
But there is a difference in how you demonstrate the value.
Improving profitability is a cost-saving approach while increasing profitability is a revenue-generation approach.
Either approach can make for a valuable offer.
But combining them into one offer dilutes the potential impact of each individually.
The issue most small firms deal with is not committing to one thing. It is hard to demonstrate value when you offer many ‘valuable services’.
You become uncertain of your own process, the deliverables and the client’s outcome.
This happened to me – I didn’t have one valuable offer. A request would come up within my client base, and I patched together a ‘valuable’ offer without a clear outcome for the client.
Looking back, I could easily talk about the nuts and bolts of a process (monthly cashflow projects, system audit etc.) but couldn’t demonstrate the value.
Pick one main thing and double down on it. You can have supporting or secondary offers and services, but be the best at one thing.
2. Package What You Do
You don’t have to complete rework your firm to demonstrate your value.
You have to refine the position of the service you deliver and the impact that it makes.
Here’s a conversation I had with a owner about her firm. She was stuck trying to figure out how to demonstrate the value of her advisory offering.
It’s worth the read –
She used to called herself an interim controller, hoping to work with companies with +5M in revenue that had inventory issues.
I urged her to package and label her value proposition differently.
A controller won’t pay attention if another controller (albeit interim) is trying to offer them services. It just doesn’t make any sense.
She could position herself as an inventory fixer – an improver of profitability + cash flow.
She could offer interim support to controllers and CFOs with unruly inventories that are black holes for cash flow.
A concise package and label targeted to an ideal client are crucial for demonstrating your value.
3. Position What You Do
While working as a controller for a manufacturing company, I spent a lot of time with my boss, the business owner.
He was a great salesperson and would drop sales nuggets all the time.
One of his nuggets was that we should never let the client assume anything.
We had a few competitors in the market that sold inferior products to ours. Their products were half our cost but lasted only 1/5 as long.
He would say that if the customer tries to compare our products (and prices) with a competitor’s, challenge their assumptions tactfully.
He would say don’t position the product beside the competitors. Position it on its own.
If the customer said, “Well, we can get the same product for half the price.”
The sales team would respond with curiosity
- “What is the product made of?”
- “How long do they usually last?”
- “Do you want to have to rebuy the product in 12 months?”
The same goes for accounting services.
From the client’s perspective, it is easy to assume that all firms offer similar things.
You have to position your service and value away from what the client assumes is the result of your service.
If you don’t remember anything else from this week’s newsletter, remember this:
To sell high-value accounting services, don’t let the client assume anything.
The sales process of high-value service is a discovery and educational process.
To demonstrate your value, you must replace every client’s assumption with information. If you leave anything to the imagination, the client will fill it with assumptions.
4. Prove Out The Price
Back to improving vs increasing profit for half a sec…
It can be easier to justify your services when there is a dollar-based outcome/anchor to compare against your fees.
For example, if you help a client reduce inventory management costs by $10K/ yr with a real-time tracking system, the investment of $8K is a nobrainer. The ROI is clear.
Generally, profit-improving services are easier to justify and identify an outcome for. You’re just swapping out parts of an existing business.
In the client’s mind successful outcomes seem more probable – you’re upgrading what’s already there.
However, profit-increasing services generally do not have an readily apparent amount to predict the outcome.
You’ll have to find an amount to give your client the perspective of what they should invest.
What I have found helpful in sales calls is asking the client to share the dollar impact of the desired solution.
Ask the client to determine the financial impact. When they come up with the number themselves, they are more likely to believe it and accept it as achievable.
You: What is the financial impact of opening two more locations in the next 18 months?
Client: Well… based on my average location profit… I would say an extra $200K to the bottom line.
Once you have the solution’s impact, you can use that as the basis for making your offer. Any price less than the solution’s impact makes sense.
When you position your fees against the outcome, the logical value of your solution is easily demonstrated.
Demonstrating value requires:
1. Committing to doing something – You can’t demonstrate expertise if you’re an ‘expert’ in everything.
2. Package and refine what you do – Offers with clear labels and targeted benefits are easier to sell.
3. Position what you do – Don’t let clients assume what you do, putting you in an apples-to-oranges comparison.
4. Prove out the price of what you do – When your fees are lower than the outcome the decision is easy.
That’s it for this week.
Build The Firm You Want.