TFYW#074: 3 Variables Clients Will Pay More For

Feb 9, 2024

This week, I want to break down three service variables that can be the difference between a 10% and 100% price increase.

Value Variables

For a product-based business, everything lives and dies by the product.

As service providers, we can adjust multiple real-time variables to deliver different value levels.

Yes, there are foundational deliverables we prepare and information we offer. But other factors (think when, where, how, frequency, and level of detail) all play into how much clients pay.

 

If you don’t remember anything else from this newsletter, remember this:

 

What we think the engagement’s value includes does not usually match the client’s perceived value.

 

Three variables can significantly improve the value we deliver and easily justify higher prices.

Speed

Last year, I spoke to a firm owner with a team of 7.

He was quick to identify his bottleneck as his turnaround time.

He explained that when a new client showed up for a Year-end or Write-up engagement, there were usually 1,000 hours of billable work already in the queue.

1,000 hours.

Split between 7 team members (we’ll assume one is an administrator), there were 143 hours or almost 4 weeks of work per team member before that file could even be touched.

He told prospects the wait time was 6 – 8 weeks just to start.

He also wanted to grow 20% in the next 18 months.

I told him that the turnaround was not his bottleneck. It was a symptom.

His bottleneck was a combination of:

  • Pricing
  • Client selection
  • Onboarding workflows
  • Fulfilment process management

If new clients onboard in two months, client retention will become a significant issue for the existing clients.

For this firm, 20% growth would more accurately be represented by new client growth of 30% and client churn of 10%.

Now I am not saying that all new engagements should be completed in a week, but that the Time To First Value (TTFV) should be as soon as possible.

TTFV is the period between signing the engagement and experiencing value from the relationship. That could be an onboarding email, web form or document collection sequence.

That period will be the primary factor in their perceived experience, even if everything else is delivered flawlessly.

Don’t underestimate speed as a reason to pay more.

Ease

I started seeing a chiropractor again recently.

I started with a Google search.

The closest clinic to me, with decent patient reviews, allowed me to set an appointment, but none of the available slots worked for my schedule.

The next closest one did not have an appointment tool. The site said to email them to set an appointment. I emailed and asked to book an initial assessment on a certain day.

Their response asked me to book an appointment over the phone before 4 pm on weekdays.

It might not seem like much, but I do my personal emails and planning in the evenings and weekends. Scheduling a call in my calendar to schedule an appointment with them was a hurdle.

The third closest clinic worked perfectly.

I booked an initial assessment, completed their paperwork, and received a text asking if I wanted to schedule the first adjustment immediately after the assessment.

In 7 minutes, I was a new client; they had all my paperwork and I two appointments booked.

I spend no extra mental bandwidth when it comes to working with them.

They’ve refined their process and know what steps I need to take to minimize my energy output and optimize their revenue and efficiency.

Working with this chiropractor is so easy.

Most of the time, we focus solely on reducing our work. Increasing ease comes from reducing clients’ output to work with us.

Ease is rooted in the when, where and how clients interact with us.

Are your services balanced to optimize for you and them?

Communication

With all the accounting tech and automation, minimizing client involvement is getting easier.

But at times, we mistake reducing client involvement with reducing client communication.

Communication becomes a burden when we let it be haphazard, unlimited or an assumed feature of an engagement.

When we don’t get specific about our communication, our clients expect they can call/email for whatever they need.

And then when we don’t/can’t respond for 72 hours… their expectations cause a catastrophic client experience.

Higher-value services can only be delivered alongside structured and intentional communication.

Must haves for intentional communication:

  • Be upfront and specific with communication and levels – If they want more access, they will have to pay.
  • Highlight the cost of that structure communication – When they pay for it, they are less likely to abuse it.
  • Have a first-tier and second-tier response structure – Not all client emails should make it to your plate. Get your team to vet the transactional questions.
  • Having a standing agenda – For structured communication, cover key topics every meeting based on solving their next problem. General topics don’t generate results.
  • Stick to the schedule – When a client calls or emails with a more involved question, let them know their question will be part of the agenda at the next meeting.

Client relationships thrive with clear communication cadences and structures.

You can’t charge top dollar and then hide from your clients.

Before you send your next engagement letter, look at what components you’ve invested in to see where you can charge more.

Build The Firm You Want.

Mark

P.S. Email Mark@FirmNexus.com with something that you want me to talk about. I’ll add it to the list. 

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