the radical cpa

are you the key signal caller for your clients?

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calling the right plays means understanding your clients and their goals, as well as their weaknesses.

by jody padar
radical pricing – by the radical cpa

it’s up to you to recognize the client persona most suited for your firm, but you’ll want to start by defining your customers’ needs. so, what do people really want, and how can you figure it out?

more: value pricing requires defining your clients | how value pricing impacts your employees | six steps to start value pricing | stop selling time | why pricing is so disruptive | the radical pricing model: start with $25k | three critical factors drive the value pricing trend | accounting disruptors are heading your way … with deep pockets | the convergence of trends makes pricing changes imperative | stop looking for talent that does not exist | advisory work must be priced by value, not hours
goprocpa.comexclusively for pro members. log in here or 2022世界杯足球排名 today.

 

certainly, you can engage in expensive research, from questionnaires to focus groups. but, in reality, most of the clues you need will come from your knowledge of the people you work with within that group.
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value pricing requires defining your clients

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choose your client personas wisely.

by jody padar
radical pricing – by the radical cpa

one drawback of the hourly pricing model is its one-size-fits-all nature. every client is charged the same rates per hour, with the only difference being the number of hours each uses.

but the world isn’t made up of identical people working in identical businesses and driving identical cars to and from their identical homes. thank goodness!

more: how value pricing impacts your employees | six steps to start value pricing | what are you selling? | three critical factors drive the value pricing trend | accounting disruptors are heading your way … with deep pockets | the convergence of trends makes pricing changes imperative | stop looking for talent that does not exist | advisory work must be priced by value, not hours
goprocpa.comexclusively for pro members. log in here or 2022世界杯足球排名 today.

 

clients are as different as you or me, but we can group them into buckets called personas based on shared values or traits. in a client-centric firm, it helps to understand these basic personas so you can more efficiently meet each client’s needs. you probably have a handful of personas in your firm right now. you just haven’t seen them as a grouping because, in your bill-by-the-hour model, it doesn’t matter who they are.

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how value pricing impacts your employees

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would your employees prefer to be valued for their knowledge and experience or for the time spent on a project?

by jody padar
radical pricing – by the radical cpa

do you think any of your staff studied accounting in college so that they could punch a time clock for the rest of their life? they value being professionals as much as you do. more than likely, they enjoy being valued for their knowledge and experience.

more: what are you selling? | three critical factors drive the value pricing trend | accounting disruptors are heading your way … with deep pockets | the convergence of trends makes pricing changes imperative | stop looking for talent that does not exist | advisory work must be priced by value, not hours
goprocpa.comexclusively for pro members. log in here or 2022世界杯足球排名 today.

 

given the choice between being valued for their time or valued for their professional accomplishments, which do you think they’d prefer? valued employees are happy employees!

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six steps to start value pricing

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change is inevitable. value pricing has reached this critical stage.

by jody padar
radical pricing – by the radical cpa

can you remember doing business before cell phones or social media? you really don’t have to be too old to remember because change happens fast. in fact, if you are over 50, you probably remember when every home had a landline, firms advertised in the yellow pages, and accountants charged hourly for mundane compliance tasks.

more: stop selling time | why pricing is so disruptive | the radical pricing model: start with $25k | three critical factors drive the value pricing trend | accounting disruptors are heading your way … with deep pockets | the convergence of trends makes pricing changes imperative | stop looking for talent that does not exist | advisory work must be priced by value, not hours
goprocpa.comexclusively for pro members. log in here or 2022世界杯足球排名 today.

 

it really wasn’t that long ago when the internet was intriguing rather than indispensable.

at some point, change becomes inevitable, and i would argue that value pricing has reached this critical stage.

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stop selling time

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if you’re billing by the hour, you’re selling yourself short.

by jody padar
radical pricing – by the radical cpa

amazing things happen when you stop thinking about what you’re selling and focus on what clients are buying.

many of the things clients don’t value are compliance-related like:

  • tax returns
  • payroll
  • accounting services

more: why pricing is so disruptive | the radical pricing model: start with $25k | three critical factors drive the value pricing trend | accounting disruptors are heading your way … with deep pockets | the convergence of trends makes pricing changes imperative | stop looking for talent that does not exist | advisory work must be priced by value, not hours
goprocpa.comexclusively for pro members. log in here or 2022世界杯足球排名 today.

 

but much of what they do value is less defined, though of higher value to their business lives:

  • small business expertise
  • management support and confidence
  • any service requiring specific knowledge or experience

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why pricing is so disruptive

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kick familiar to the curb and get paid what you’re worth.

by jody padar
radical pricing  – by the radical cpa

the familiar is always more comfortable than something new. shifting your pricing model is bound to be disruptive because the billable hour is what we know and have always known. it is the default billing model of every new firm. it’s comfortable, familiar, embedded in our dna and seems like the easiest billing solution.

more: the radical pricing model: start with $25k | three critical factors drive the value pricing trend | accounting disruptors are heading your way … with deep pockets | the convergence of trends makes pricing changes imperative | stop looking for talent that does not exist | advisory work must be priced by value, not hours
goprocpa.comexclusively for pro members. log in here or 2022世界杯足球排名 today.

 

certainly, there are some pros to billing by the hour. profits remain relatively stable. if you work 40 hours, you know you’re going to bill and hopefully be paid for those 40 hours. there’s a clarity and certainty to it. but there are only so many hours in a week. by embracing the billable hour, you’re putting a profit ceiling on your firm.

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the radical pricing model: start with $25k

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deliver more value to clients while freeing your team from timesheets.

by jody padar
the radical cpa

consider the $25k rule.

because this method requires heavy lifting on the front end, a good rule of thumb is to only value-price engagements of $25,000 or more. if the client falls below $25,000, they are eligible for a fixed price or fixed price plus a value add. this rule is important because if your client is a small business, it doesn’t matter how much value they perceive in your services; they will not be able to afford value pricing above a certain level.

more: three critical factors drive the value pricing trend | accounting disruptors are heading your way … with deep pockets | the convergence of trends makes pricing changes imperative | stop looking for talent that does not exist | advisory work must be priced by value, not hours
goprocpa.comexclusively for pro members. log in here or 2022世界杯足球排名 today.

most services are fixed-priced, but based on conversations with the client, those prices may drop or be raised accordingly. some of the data points used to set pricing are the pita factor (pain in the a#%) and the client’s gross revenue.
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three critical factors drive the value pricing trend

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embrace the value pricing perfect storm.

by jody padar
the radical cpa

ron baker is known as the value pricing guru in the accounting space. he was way before his time in separating the price of labor from the value of a product. labor-based pricing is based on the difficulty of doing a task. value pricing looks at everything from the client’s viewpoint. his argument is as follows: the value you provide your customer, regardless of the deliverable, is worth way more than the hour.

more: accounting disruptors are heading your way … with deep pockets | the convergence of trends makes pricing changes imperative | stop looking for talent that does not exist | advisory work must be priced by value, not hours
goprocpa.comexclusively for pro members. log in here or 2022世界杯足球排名 today.

while value pricing isn’t new, automation has driven it to the forefront. automation gives cpas up to 90 percent more time to provide valuable services based on their expertise, knowledge base and experience.

although it was clear the cloud was going to have a disruptive impact on our business model, ron baker would always explain: it’s not the technology that’s going to make value pricing the way to go, the value’s always been there.

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the convergence of trends makes pricing changes imperative

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kill the billable hour to earn what you deserve.

by jody padar
the radical cpa

the speed of change is faster than ever. how are you going to react to it? that’s what i’m really preparing you for – redesigning your entire business model to become a more client-centric advisor. value-based pricing models are the key component but not the whole story.

more: stop looking for talent that does not exist | advisory work must be priced by value, not hours
goprocpa.comexclusively for pro members. log in here or 2022世界杯足球排名 today.

today’s automation, new competitors, staffing challenges and new technologies are conspiring to bring clients more value than they could have enjoyed before. all of it is shifting the way you need to think about your services, what clients value and how you get paid fairly for the expertise you bring to the table.
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technology helps in more ways than you think

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retention? new clients? check, check.

by jody padar
the radical cpa

the owners of “very prepared” firms say “technology is having a very significant impact on my firm,” vs. the less prepared who view technology as a utility, a mechanism for greater day-to-day efficiency. “very prepared” firm owners report seeing and using the technology as an enabler of better business results.

more: how to be a small business advisor | center your firm around your client | commit to change | your client base is global | ready for change, so now what?
goprocpa.comexclusively for pro members. log in here or 2022世界杯足球排名 today.

this is exactly what the radicals believe and implement. technology has already disrupted our core and we are proactively adapting to the changes it has created.

bar chart
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center your firm around your client

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two businesswomen shaking handsthere are three ways to change the product-market fit. only one works.

by jody padar
the radical cpa

it’s hard to look at your firm from a customer’s perspective. that’s why we gravitate to a firmcentric point of view. this point of view asks questions like: what do we sell customers? how can we reach customers? what do we need to establish with our customers? and how can we make money from our customers?

more: commit to change | your client base is global | ready for change, so now what?
goprocpa.comexclusively for pro members. log in here or 2022世界杯足球排名 today.

we’re thinking about ourselves internally. nobody wants to hang out with someone who only thinks of themselves, yet that is the way we run our firms.

instead, i’m going to ask you to look at your business from your customer’s point of view. design thinking asks the following:

  • what jobs do our customers need to get done and how can we help?
  • what are our customers’ dreams and aspirations?

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commit to change

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post with two signs, "same" and "change"be sure to document every stage.

by jody padar
the radical cpa

before you consider adopting the cloud or any of the “new firm” mindset, you have to ask yourself if you are willing to be the change.

once you decide, first thing, first. own it! you have to commit. if you teeter it will be harder. jump in feet first and feel the shock of the cold water.

more: your client base is global | ready for change, so now what?
goprocpa.comexclusively for pro members. log in here or 2022世界杯足球排名 today.

i’m not saying it won’t work if you wade in, i’m just saying it’ll be more of a challenge. when you change all your processes, it’s a lot of hard work but part of what will get you there is commitment. if you are seriously considering uprooting your firm’s foundation, you need to ask the following questions:
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