Given the COVID-19 pandemic and the adaptation and evolution required to continue serving our firms and clients, the Growth Strategies committee posed the question “How do you candidly and compassionately communicate fee increases/extra billings after a crisis?” Here’s what members had to say…
Your value, especially in a crisis, is pronounced when clients are looking to optimize revenue. As you engage in more advisory services, it’s important to be up-front about your fees and talk about them candidly when you communicate fee increases. Don’t avoid the awkwardness; allow it to lead you into a transparent and empathetic conversation. You can show compassion and value by acknowledging what you know about their situation. For instance, if they applied for the PPP loan, talk about that. Also, be prepared for the conversation. Don’t just quote hourly rates. Estimate your fees/time on the front end to remove the uncertainty. (Right now is an excellent time to move toward flat-fee pricing!) If you are worried about whether the client will see the value, talk to them about what’s in it for them. Above all, be confident in the value you provide and the relationships you have developed.
president and founder
Forget about increasing “fees” and “billing.” Now is the time to double down on your relationship by letting go of the archaic notions of billing by the hour and fix fees and switch your customers (not clients) over to a subscription price. If your firm can do the work, it is included in one monthly price. Stop trying to make a profit on every hour for every client, it is suboptimal and a bad customer (there’s that word again) experience. Prefer to dip your toe in the water? Try this: For $X per month you will handle everything COVID-19 related. How do you figure $X? Do it actuarily! Price your portfolio of customers, not the services to a single customer.
Senior Director, Partner Development and Strategy
Some accounting firm leaders don’t plan to charge for all crisis work. They communicate to clients some calls or videoconferences, research and consulting are part of value-added services to help clients sustain their businesses and recover. They believe this relationship building will help them keep and attract great clients. However, when you communicate fee increases/extra billings it is a case-by-case endeavor. Never send a generic email announcement to a client that your fees are increasing because of crisis consulting. Instead, communicate the value they receive while you are doing the work. Point out work that may cost more than normal before you do it. Manage conversations through the consulting process so they aren’t surprised by the invoice later. Above all, speak by phone if they have questions or worries about paying. Prepare for any hard conversations with facts and active listening. Clients want to be heard and respected.
Ingenuity Marketing Group
Don’t panic if customers ask to negotiate price — even if they ask for discounts. This is great news! It opens the door to discuss what they value and what they don’t. Take this opportunity to move them from open-ended hourly billing with surprises to a fixed-price agreement where you both know exactly how much they’ll pay and when. Wouldn’t you like to have more predictable revenue? Probably almost as much as they’d like more predictable expenses.
Offer “package” choices. Through developing options, you’ll define scope parameters. Say you have a range of $3-5K in mind; clarify what must be exactly “so” for $3K, and what considerations elevate price to $5K. Even when we have to buy a necessity (like tires or insurance), simply having some choice empowers some sense of control. Businesses who’ve lost all control from recent events will especially appreciate this!
Tip: Three options is the magic number: show goodwill with one option that’s less than they now pay, a middle option that’s closer to current fee levels, and one that’s higher if ROI is clear.
Michelle Golden River CPF
In each issue of Growth Strategies, the Association for Accounting Marketing’s quarterly thought leadership publication, three affiliate members are asked the same question as part of the “Consultants’ Corner” feature to share ideas on the same topic. Make sure to check out the Summer 2020 issue of Growth Strategies, which will focus on the marketer’s role in M&S and crisis communications, in mid-June by clicking here.
About Christian Moises
Christian Moises APR is practice growth specialist for Ericksen Krentel CPAs and Consultants in New Orleans, where he is a one-man shop doing it all. He spent the first 10 years of his career in journalism, serving as an editor with New Orleans CityBusiness, the business journal of New Orleans, before transitioning to marketing and communications, with stops in death care communications, community hospital public relations and marketing/communications for an AM Law 200 regional law firm. He also serves as editor and committee chairman for AAM’s quarterly thought leadership publication Growth Strategies.