Implementing a new fixed pricing model = a new process for qualifying clients. Not all existing and future clients are ready or willing to leave hourly billing behind. Some could actually cost you more in time, effort and stress than the transition would be worth. The following tips will help you identify which of your clients are fixed-fee ready.
Determine Your Client’s Attitude towards Fixed Pricing
Some clients want the basics and may not be interested in the higher-value advice that makes fixed fees pricing a good solution. Some are more comfortable paying an hourly rate. They like that they can see how many hours of your time they get for what they pay. Each task you complete is accounted for on the invoice, and that gives them the feeling of being in control of the relationship.
When a client is stuck on hourly billing as their go-to solution it often means they are still in the traditional client-vendor relationship mindset. The clients who will be better suited to fixed pricing are those who favor the partnership-type of relationship enabled by cloud-accounting.
To identify which camp each of your clients fall into:
Ask them if they have unmet accounting or bookkeeping needs. Determine if they are interested in a partnership relationship.
Try to find out how they might feel a year or two in the future if their business has grown and the need for your services is greater—and the bills are bigger.
Ask questions to determine their opinion of the value you deliver to their business each month.
Determine Your Client’s Attitude Towards Technology and Change
Fixed pricing works best when you are able to optimize your workflow and find efficiencies for both you and your clients. A key to making that happen is to standardize on one tech stack for all clients. This means choosing the right apps to automate your workflow—and then converting all fixed-fee clients to that stack. If you are able to make the conversion in all clients, your staff will be able to gain mastery over your stack, rather than having to learn several different systems. This allows them to work more efficiently and deliver the benefit of their expertise to the clients.
The challenge with some clients is that they have legacy tech that they are reluctant to move away from. In some cases this may be because they are not the most tech savvy companies and making a change to a new system causes anxiety. Or perhaps they believe the tech they are currently using is the right solution for them. Both of those types of clients will be harder to transition to your stack—and that will make fixed pricing hard to implement.
Without the benefit of cloud-based efficiencies, profit margins and workflow optimization could suffer. Clients who are resistant to technology change may be more likely to:
Question your recommendations
Be unhappy with new processes
Drag their feet during the transition
Create more work and stress for your staff.
In order to qualify clients around their attitude towards technology:
Determine if they are open to using your accounting platform and the collection of apps you use.
List the technology they currently use.
List new technology they have adopted in the past year. This may indicate an openness to change.
List what will need to change or be implemented to move to your tech stack. Could your team comfortably handle the transformation? How much disruption would it likely cause the client?
Determine Your Client’s Business Needs
Fixed pricing encourages you to move up the value chain so you can act as a true partner to your client. That means going beyond the numbers and finding real solutions to their most pressing business problems. When you are able to do that, fixed pricing pays out for you both. But not all clients are comfortable revealing their most pressing business issues.
In order to identify which clients are interested in getting more strategic business advice:
Examine what level of discussion they are interested in. Do they only care about the financials, or are they open to discussing their vision, systems and strategy?
List times the client shared their business issues looking for solutions. List times you have given advice and they have acted on it. The more open they are to this type of relationship the better the transition to fixed-fee pricing is likely to go.
Not all clients make great candidates for fixed pricing. To identify the ones who would benefit most take an objective look at their attitudes towards paying fixed fees, changing technologies, and their desire to have you partner in the growth of their business. Those clients who see the value of improved efficiencies that come with standardizing on one tech stack, and who are hungry for strategic advice that helps them solve their most pressing issues are the ones who will make the best candidates for the transition to fixed fees. Figuring out which of your clients fit that profile most closely will enable you to make smooth transitions with the right clients, and avoid the headaches of trying to manage reluctant ones.