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Unlocking the Secrets of Effective Pricing: Foundations and First Steps
Jan 27, 2025
Pricing. It’s the single most critical factor in running a successful accounting or bookkeeping business. Yet, it’s often misunderstood or overlooked.
For Kimme Lafayette, adopting Effective Pricing made a dramatic difference in her business. She describes it as the wrapping paper around the life-changing benefits of value pricing. And what’s inside? A gift that can truly transform your business and your confidence.
In this blog post, we’ll look at the foundations and initial steps that are essential for mastering the Effective Pricing software, based off Kimme’s training session on getting to grips with the software.
Get ready for insider knowledge and practical advice, whether you are new to the pricing software or looking to refine your skills.
Check out the full training session Kimme did here!
Kimme’s Effective Pricing Success Story
The first time Kimme used Effective Pricing, she quoted a client who, under her old hourly model, would have been charged $4,200 annually.
Using Effective Pricing, the quote came to $18,000. That’s an annual increase of $13,800. That result was a complete confidence boost.
And it didn’t stop there. The second time Kimme used Effective Pricing, her new quote was over 200% higher than her old hourly rate.
The third time? It was $22,000 more annually than what she would have charged before, and $30,000 more than what the client had paid their previous bookkeeper.
Here’s the key takeaway: People are not price-sensitive. They’re value-sensitive. When clients see the benefits you bring to their business, they are willing to pay for it.
Was Kimme nervous the first time she used the software to price a client? Absolutely. Using value pricing takes courage and a bit of practice. But after seeing results like this, she couldn’t wait to try it again.
Effective Pricing transformed not just her business, but her mindset. It gave her confidence and a clear process to price her services fairly and profitably.
The Core Principles of Effective Pricing
Why Time-Based Billing Fails
Time-based billing creates uncertainty for clients. It leaves them guessing what the final bill will be and often makes your prices seem higher than they are. Worse, clients start comparing your hourly rate to hiring an employee, and that’s a battle you can’t win.
Clients don’t care how long it takes you to do the work. They care about the results. For example, accurate financial statements, strategic insights, or peace of mind.
Pricing based on the value you provide, not the hours you spend, is what they truly care about.
The Evolution of Pricing
- Fixed Pricing: A set price for specific tasks (e.g., $100 for a bank reconciliation).
- Menu Pricing: Bundling fixed prices into packages. Think of it as a menu where clients pick and choose what they need.
- Value Pricing: Pricing based on what matters most to the client. For example, faster turnaround times or extra meetings for greater clarity.
Here’s the difference: Fixed and menu pricing focus on the work. Value pricing focuses on the client. And that’s where Effective Pricing comes in: it gives clients options they truly value, without leaving money on the table.
The Key to Value Pricing Success
Imagine two identical clients, Charlie and Heather. They run similar businesses, need the same services, and have similar transaction volumes.
Under fixed pricing, you’d charge them the same. But value pricing allows you to customise.
Charlie wants faster financial reports and is willing to pay extra. Heather prefers more frequent meetings.
By offering value-based options through Effective Pricing, you meet both their needs while maximising your revenue.
How to Implement Effective Pricing
Step 1: Master the Core Concepts
Value pricing isn’t just about using the Effective Pricing software, it’s about understanding the core principles.
Take the time to learn how to ask the right questions, uncover what clients value, and position your services accordingly.
Step 2: Follow a Structured Pricing Process
Here’s Kimme’s process:
- Identify your ideal client. Focus on those who value your expertise.
- Conduct a discovery call. Outline your process and charge for a diagnostic review.
- Hold a fact-find meeting. Uncover their pain points, goals, and motivations.
- Use Effective Pricing to present value options. Let clients choose what works best for them.
- Create a tailored proposal. Highlight how you’ll solve their specific challenges.
Step 3: Keep Improving
Value pricing is a journey, not a destination.
Kimme tweaks her Effective Pricing models regularly, and is still learn something new with every client. The key is to start and keep refining as you go.
Pro Tips
- Always price each customer individually based on what they value most. When you offer tailored options, clients feel special, and your revenue grows.
- Value pricing takes time. Kimme’s first Effective Pricing model took 8 hours to set up, but it earned her £13,800 extra on one client. That’s £1,725 per hour of setup time.
- Your confidence will grow with practice. The first time is the hardest, but the results are worth it.
FAQs
What’s the difference between fixed pricing and value pricing?
Fixed pricing sets a flat rate for tasks, while value pricing tailors prices to what the client values most, thus making the client happier and making more money.
What exactly is the Effective Pricing software?
Effective Pricing is a cutting-edge software designed specifically for accountants and bookkeepers to master value pricing. Unlike traditional hourly billing methods, it helps you to present clear, fixed prices that clients understand and value. Using its price psychology-backed framework, the software allows you to create customizable pricing options, making it easy for clients to see the value of each tier and choose what suits them best.
Where can I find out more about Effective Pricing?
You can find out more about the Effective Pricing software on our website.
You can also watch Kimme’s full training series on our YouTube channel, here’s the link to episode 1.
If you found this valuable and would like to learn more about value pricing, we offer a free live online training session on a topic you choose every month. You can attend live and ask any questions you have. Click here to register, and we will send you an invitation to the next session.
If you’d like to join our community of over 10,000 accountants and bookkeepers who are working together on their value pricing journey, you can join the Facebook Group here.
Wishing you every success on your pricing journey
The Value Pricing Academy Team