How To Use Value-Based Pricing to Sell High-Value Services With Denise Mandeau | Episode 39

 

Many people tend to underestimate the power of owning their value in the different parts of their lives, and this holds true for value-based pricing. This is important because creating a price based on the way you perceive your value also affects the way your customers will perceive your value, so you’ve got to show them you’re worth their investment. Denise Mandeau is a renowned business growth strategist. She sits down with Michelle Weinstein to discuss the inherent value in value-based pricing. Thinking of taking your business to the next level? This is a great step to start!

—

This episode is brought to you by Xero.

With Xero’s cloud accounting software, small businesses and accountants can work together and collaborate anytime, anywhere. With real-time financials, bank connections, unlimited users, and online invoicing, it’s beautiful accounting software that’s powered by people. Xero provides its 2+ million subscribers with connections to a thriving ecosystem of 800+ third-party apps and 200+ connections to banks and financial service providers.

Learn more at www.xero.com.

—

Listen to the podcast here:

How To Use Value-Based Pricing to Sell High-Value Services With Denise Mandeau

Thank you for being here with us. The Abundant Accountant Podcast is here to help you thrive, flourish and prosper during a time of people that might be contracting and how you can get further in your business now than any other time in the past. If you’re an accountant, you’re in the right place because we help you sharpen those skills, have consistent revenue coming in the door where you have the confidence to convert at high levels and percentages. We cover topics like value pricing, finding your ideal clients and how to convert those, increasing your cashflow profitability, decreasing and getting rid of accounts receivable completely, and learning how to set boundaries with your clients and much more. You’re in the right place and this show will show you exactly how to create the business and life of your dreams. Thank you for being here. Denise and I have a special offer for you that if you’re finding it a little challenging to thrive, prosper and grow during this time, then head on over to the AbundantCall.com to book a call with us.

If you’re frustrated and stressed of getting the right referrals overwhelmed with the amount of loan paperwork to fill out and feel like you’re stuck in the compliance grind and the paperwork grind and want to focus on those higher-paying clients, you’re probably like a lot of the other accountants we work with. You’re on this cashflow roller coaster ride. Head on over to AbundantCall.com. Coaching sessions with us are completely complimentary as long as you’ve been in accounting-preneur for at least two years. Two years is our requirement. Let’s get into the show. Welcome, Denise. 

Michelle, good to see you.

Being a virtual company, especially for some of you that I’ve talked to, you’ve got an accounting firm, you’ve got a brick and mortar, and you’ve been forced to figure out how to go virtual. Thank you to the pandemic for helping you shift your business in that aspect. We’re going to talk about how to use value-based pricing for your accounting services, how you can use value-based pricing with forecasting, projections, cashflow planning and allowing your clients to see what possibilities there are instead of contracting and getting in that. Denise, you and I were talking about a lot of people who are in fear, flight and fight. They’re fighting.

They’re fighting for survival. That’s not empowering.

It’s not but how can you thrive? How can you prosper? How can you grow during this time so you can come out on the other side? One of the ways is to use value-based pricing on the services that you can offer more of the consulting packages. If you think about the different services, there are financial projections that you could be helping business owners if they get a PPL loan or if they get an EIDL. There are many little acronyms out there that I’m getting used to them, thanks to all of you. How can you thrive with your clients and set up packages, be it emergency cashflow plan packages or post-virus packages? How can they be set up to make acquisitions for the competitors that don’t make it? That’s what we’re going to be talking about. Denise, can you share with everyone who you are and where you’re at? They might not remember you even though you’ve been here a lot of times with me, but in case there’s a new audience to the show, give a brief bio.  

I’m Denise Mandeau and I live on the East Coast in New Jersey at the shore. For those of you who are in the New York Metropolitan Area, you know what the shore is, but for those of you who don’t, it’s the Jersey Shore. I live about ten minutes from the beach. I’ve been here for close to 20, 25 years. I was a financial planner for 22 years, sold my practice a few years ago. I love working with accountants because I understand how to help you bring your value to the table and stop the charge and undercharging your value. Michelle and I love helping you have thriving, successful, abundant practices.

I like paperwork but I don’t get paid for it. How unmotivated can you get quickly when you keep charging hourly or you’re charging the small little fee for filling out paperwork for clients, when that could be the value add and then you could convert at the higher levels? The theme is going to be Thriving, Prosper, Flourish, Move Forward and Not Contracting. Thinking about what are the big opportunities that you can capitalize on and then how you can value-based priced around that? Denise, what would you say would be the first way to get into the value-based pricing, especially with the times where we’re at being in the pandemic? A lot of you I’ve spoken to one-on-one, “Michelle, I feel like I should help them with this. They already pay me monthly fees then.” What else have I heard? There’s a limit on what we can charge our clients to fill out a form. We have to see past the form. We have to see past the monthly services and think about 90, 120 days, six months from now, what are those opportunities? There’s a ton of business that is thriving. Charmin toilet paper is doing well. 

There are a lot of entrepreneurs and there are people that have the resources. There are some businesses that are nonessential that have closed down. Those people need your help even more because they need to know how they can pivot or how they can position themselves for when things start to normalize. Your knowledge and your advice and your expertise are even more valuable. One thing we talked to a lot about with our students is to not undervalue that. Don’t give them a Band-Aid because they need your help. Is a doctor not going to charge because somebody has cancer? No, they’re going to charge for that. They paid a lot of money to learn how to help people through it.

Let’s give it a real-life example. I was talking to one of our students, Mike. He’s putting together financial forecasting and financial projection packages for his clients so they can come out on the other side of this. No matter how short or how long this goes where they are moving ahead and they’re moving forward, they come out on the other side even in a better position than they are at now. He was sharing with me that this had been a successful opportunity that he’s been offering. Denise, how would you price that? If we were going to go through a coaching session pretending I’m Mike, what are some of the types of pricing and ways that we can put this together? Who knows how long it’s going to take to put together some financial projections? It’s a great idea for you to think about those business clients or even high net worth individuals. The stock market’s on sale. Another one of our students, Wendy, there’s a lot of bargain shopping going on in the stock market for those that have funds to make those investments.  

It’s also important to keep in mind that you have to shift your way of thinking away from à la carte or away from hourly to thinking more about, “What’s the value? What’s the time or the amount of money you’re going to save someone?” Maybe it’s a percentage of savings that you come up with a flat percentage. We’ve had some students do that. I can think of David who was charging by the hour and then we taught him how to shift that. Look at what is the value that you’re bringing? How much are you saving them in aggravation, in time that they can then turn around and use those savings? He’s getting no less than $4,500 minimum to even do an overview with somebody.

It’s important when you think of how you use the value pricing, high-value services and how to price them. You can do an hourly rate. You can do a fixed fee. You can do something like what you’re talking about, Denise, which is value pricing. In addition to that, if you think about the current times and your business clients, 30, 60, 90, 120 days from now, think about the opportunities missed. If they don’t consult with you, what would it cost them? I was on a phone call and someone said, “Michelle, what does it cost me?” I asked her, “What would be interesting to know is because you haven’t had a solid plan, maybe you don’t have a solid package in place that you’re offering your clients. You said it’s loosey-goosey.” That was the exact term she used. I asked her, “How much revenue do you think you’ve missed every single month because of that?” She said, “About $2,000 to $3,000 a month.” In the last six months, then it probably costs you about $6,000. What I want you to see on the value pricing side is that’s an investment. If you switch it, for her, the investment to do education or a program to work with Denise and I, there’s going to be a return on that.

Especially for all your business clients, if you do a financial forecasting package, if you do projections package, if you’re like Wendy and do a whole financial investment package that if they buy on the stock market at a 50% discount and then they come out 200% in the future, I can’t do that math without an Excel spreadsheet. That’s a lot of money. If you charged for your services to have that consulting fee, which by the way, you’re going to hear Mike’s episode because we talked about KPIs. Seventy clients doing $2 million in revenue. He is using value pricing because he tracks his hours, which is important to talk about. Denise, if you want to talk about why it’s important to track how much time you’d use, but it’s not how we price it.  

You have to think and plan ahead. That’s why it’s important to prepare and know how much time it’s going to take you to figure something out or to do an assessment or whatever it is that you’re offering. It’s important for you to know how much time it will take you because if you under-price it, then you’re going to feel like you’re working slave wages. You don’t want to do that. You want to be able to build enough in there to make sure that you’re not pricing based on your time and rushing through something. You want to be able to take your time and be paid for your knowledge.

The person I was speaking to, she had a Master’s in Tax, she had a CPA, had an undergrad and a lot of you do. Some of you even have a Law degree in Tax, and you’re not too happy with the amount of money you’re making for how many hours you work. Most of the examples that I hear is that your revenue is around $100,000, give or take $50,000. However, we’re working 12 to 15 hours a day. I would go crazy. I can’t do that. I’d last one day like that and it’s not healthy. With the pandemic, we have to keep our immune systems up. It’s important that we pay attention to this. Sometimes, people are making more working at Costco. It’s like, “Why don’t we do the things we love but also get paid for it?” You can’t discount your knowledge. Your knowledge did not go on the stock market sale. That will never get discounted. If you have a Master’s, you have the CPA, EA, you’ve done Tax Resolution Courses. That’s a lot of education and that you get to get repaid for and be able to share that knowledge with others, which is why the value pricing is my favorite way on how to price your higher value service.

There's a value to knowing all the little details and loopholes you can use. Click To Tweet

There’s a little story that illustrates well. There was this tanker, a ship that was at port, there was a problem and all of these different engineers kept coming and trying to figure out the problem and they couldn’t get it to work. They heard about this older gentleman who was supposed to be amazing at what he did. He came and he looked over everything and he listened and he had this little hammer. He touched this one little spot and all of a sudden, all the engines started going. He was there for maybe twenty minutes. What happened was when they got his bill, it was $30,000.

For twenty minutes of work?  

Yeah. All these other people were like, “How come it was so much?” He goes, “It’s not the fifteen minutes. It was the 30 years of experience that I have to know exactly where to place that little hammer to fix things. That’s what you paid for.”

That’s not any different for all of you reading. Can we name that story, Denise? That was well-said. I don’t think we need to talk about anything else.  

Maybe The Older Man and The Hammer.

The Older Man and The Hammer is the only thing you all need to remember. A lot of you who I’ve spoken to have said, “I feel like I’ve got to do all this work in order to charge those types of fees.” If you were the older guy with the hammer and you learned for 30 years what you needed to do. Our student, Ellen, she only does restaurants and she can figure out really quick how to help a restaurant become profitable and have positive cashflow not go out of business. I had one of those and it didn’t work out well. If I had Ellen and she could cost out all the recipes, figure out the food waste, figure out the food loss, that business is complicated. I rather pay Ellen $30,000. How many of you have heard from your clients, “I need a new account because mine hasn’t called me back, mine didn’t know what they are doing. They made this mistake.” How many business tax returns have you seen with a lot of mistakes on it? Where someone like Ellen who’s an expert in that specific little area niche of restaurants can fix it one time, and you don’t have to have eight million different people coming through you and it takes longer because the length of time to fix something or get the right person to help you also has a cost to it. The guy with the tool and the boat, how many times did they probably call someone else to fix it?  

Maybe had less experience or less education and didn’t do extra education to know all the little details, maybe hasn’t studied the Tax Code as much as you guys have to find all the little loopholes and all the little things. There’s value to that.

To negotiate with the IRS, like one of our awesome superstar tax resolution client, David. He has opening mail ceremony parties with clients. He gets paid $30,000 to have an opening mail ceremony because it’s stressful that the clients have anxiety going to the mailbox. All they have are letters from the IRS because they haven’t done anything with their taxes in years.

If we haven’t impressed on it upon you enough, if you haven’t gotten it, stop charging by the session or what you think is fair or swimming with the rest of the sharks that are undercharging their value. When you value price, you’re going to set yourself apart from everyone else and there is no way for people to compare pricing that way.

You can’t compare anymore. It’s a commodity. Apples at Trader Joe’s were $1.50 and then I went to Target and they were $1.80. This is the most expensive apple I’ve ever seen. You’re comparing a certain fruit in a store where you can’t compare what’s in here, what’s in your head, what’s all the education that you’ve had. Remember that each client also values different things. Everyone might see this differently. I’m not sure if we’ve done an episode on this yet, Denise, but this could be a good idea in that if you’re with a client and you’re explaining this to them, for me, I’m visual. When you share the story, I envision the boat, I envision the guy there. I envision the little screw. Some people might be auditory and you might have to explain it. Think about the way they’re communicating to you, so you can also communicate back in their way of listening. That also helps sell higher-value services. What do you do, Denise? What works? I know you’ve got another good story like the boat. 

When you value-price, you're going to set yourself apart from everyone else. Click To Tweet

When you want to demonstrate your value, ask the right questions. Get underneath. You want to get behind. Understand the problems that your client is dealing with. Many of them did not have a strategic plan for such a time as this. There’s a huge opportunity for you to position yourself in a way that you are delivering a lot of value to help them through this difficult period of time for some of your clients. For some of your clients, it’s not a difficult period of time. It’s like cherry-picking and now they’re going to need to know how to manage their cashflow, how to have a strategic plan, how to set up so that they’re not going to end up overpaying their taxes for all the growth that they have.

There are many new credits and tax planning opportunities that if you keep it up here and put it in an engagement letter and take them through an enrollment process, it changes everything. Denise, you said to ask a good question. What is the best question to ask during this time to your clients? The first one?

The first one that I would ask is, “What is the biggest challenge in your business right now? What is it that you need advice on or help with to help you thrive during this time in our history?”

Maybe adding something in the beginning. I don’t know what you think about this, but you could also say, “I know there are a lot of changes happening in the world or I know there are a lot of changes happening in your business and along with your client’s business.”  Acknowledging that you’re not discounting what’s going on.  

That’s super important. The truth is that with your help, if they’re positioned properly, if they know their numbers, you can help them understand like you are talking about there are buying opportunities.

 

I told Wendy to help me shop at the stock market sale.  

Not just even that, you’ve been buying inventory at low prices. This might be a perfect time because I can’t tell you how much I’ve seen online, “We’re closing our doors.” They’re selling out things that you could be using or if you’re buying retail stuff. My neighbor, he manages at Walgreens, their shelves are empty. For people who have inventory, they’re making a lot of money. Those are people you can help thrive through this time and make sure that they have this accounting system in place to manage all of this. It’s a huge opportunity.

There are a lot of opportunities and we’re not going to discredit everything that is going on but thinking outside the box. For some of you that work closely with us, one of my bonus ideas for you to attract and get higher value service type clients would be offering a webinar on showing people how to fill out the forms themselves, so you can focus on the strategic consulting side offers. This is a time to acquire new clients. This is a great time to get new leads. You can service your people, but think about all of the people where their CPAs are bogged down that they don’t even have the time or the bandwidth to put together a webinar. Teach them all of the different available loan options, but yet all of the future credits that you’re going to keep that in your head and offer it in a consulting type, cashflow plan, financial projection-type package. 

One last thing I want to say, Denise, then you can add to it as well if you think of anything. Cost doesn’t factor into value-based pricing. When you think about when a client says, “What’s this going to cost me?” Think about what I said that what if the costs don’t work with you? Then what’s going to happen? How much an extra tax might they pay if they screw up this PPO loan and don’t pay out the payroll properly? You are my technical best friends. We’ll help you sell this stuff all day long, but we’re not on the technical side.

The value you can determine is based on that specific client. Think about that coming into your meetings prepared as Denise said. Think about what is it going to cost them because a lot of mistakes are going to happen in the next 12, 24 months. The deadline was changed to July for most people, but the businesses are all scrambling. No one had a plan in place. How can we thrive, prosper and flourish during this time? Denise, do you have anything else on how one can price their higher value packages without feeling guilty upselling during this time? That’s another one I’ve heard that maybe we could address, the feeling guilty department. This is the time when people do need you and you’re not a nonprofit. Last time I checked, no one I’ve talked to on the phone has been a nonprofit. 

Now is the time to stand in your value because this is what you've been preparing for - a time when you can thrive if you own your value. Click To Tweet

That’s a good point that now more than ever is the time to stand in your value because this is what you’ve been preparing for a time like this where you can thrive if you own your value. That’s the most important thing, owning that this is going to take a lot of time and the opportunities that I can advise my clients on. There’s not a possibility of them not paying too much in taxes but missed opportunity costs for them. If you don’t jump on this, this is a missed opportunity cost for you. That’s why we’re having this discussion because we don’t want you to miss out.

Denise, is there anything that we missed that you can think of for trying value pricing, which is a number that you feel good about that pays for your education, knowledge, time and expertise? How to attract those higher-value clients because they should stand out nicely? All the ones that you want to work with should be shining bright in front of you.

Taking that time to think about what you can do and what package you could put together and focus on that. Start a reach-out strategy and checking in with clients, “How are you doing?” Let them know, “You may have been thinking about this, maybe you hear all about this. Let’s set up a time, so I can go over how I can help you with this and then we’ll talk about getting to work.”

It’s time to start setting up those appointments. I want to thank each of you for spending the time with us. I know some of you are maybe a little frustrated, stressed. I know a lot are overwhelmed with all the new laws and reading you have to do. If you do truly want to get to the truth of where you’re at with your enrollment conversations, your sales conversations in your firm and you want to move forward during this time. You want to thrive, flourish and prosper. Probably 90% of the people are in the fear department, the flight department, they’re contracting and they’re getting small. If you want to move forward and chat with us, we are doing calls, so you can go over to the AbundantCall.com. We will talk about where you’re at in your firm? What missed opportunities do you have? Where are you missing the boat? To be honest, this isn’t your fault. Not a lot of people are training on this, especially how to connect the dots and fix the problems for the accountant industry only. Yours truly and Denise are here for you. Feel free to head on over to the website. It would be an honor to serve you for an hour.

 

Even if we don’t work together, at least you’ll get clarity, you’ll have mental clarity, you’ll probably have some anxiety clarity and maybe you’ll have an opportunity in a roadmap on how to convert these higher-value clients. Thank you for joining us on the show. It’s always an honor to be here. If you are lying in bed watching Ozark or Netflix, feel free to head on over to Apple Podcasts and leave a written review because that has helped the show grow. I want to thank each of you who has left a review. We appreciate you and we hope to talk to some of you soon. Thank you.  

—

This episode was brought to you by Xero. Remember to visit Xero.com. Xero provides the tools and human touch to managing all the elements of your practice, including a dashboard with a clear and centralized financial overview, the ability to collaborate in real-time with clients, smart customized reports with links to source transactions and free 24/7 Support.

Important Links:

• Denise Mandeau – LinkedIn
• AbundantCall.com
• Episode – previous episode
• Apple Podcasts – The Abundant Accountant
• Xero.com

About Denise Mandeau