How to show your value to your clients

Would you like clients to receive your invoice and think, “I know I got my money’s worth!,” but, instead, you receive angry calls and emails questioning your high cost?

Repeatedly, clients have shared that our firm’s fees are the highest they’ve ever seen, but never leave us because the return on investment (ROI) they receive is even higher. So, how do we charge three times the average tax and accounting rates, and still have over the moon, satisfied clients? It’s simple. We provide a visual representation of the ROI a client receives by working with us, and demonstrate this ROI throughout our relationship, from the initial pitch before onboarding all the way to our annual review client strategy Zoom meetings.

I had the pleasure to recently interview the godfather of value pricing, Ron Baker. He stressed the intangibles a firm can bring to the table, which I call competitive advantages. As The Concierge CPA™, I stress not only the intangibles (see my package offerings) but the tangible tax savings as well. This can make my fellow accountants uncomfortable, but at the end of the day, you can be extremely conservative with your estimate of tax savings and still show extreme value. For my niche client base – executives with a net worth of $5 million to $25 million – they want to pay fewer taxes and have a trusted advisor to manage the process. As a result, I focus on providing tax planning services to manage their money wisely, pay less income tax, and leave a lasting legacy to their family and charitable causes.

Example #1: tax savings

For some reason, the easiest thing to show that accountants still don’t is the tangible tax savings we can provide as consultants. When I converted to value pricing in 2016, I developed service packages based on exactly what clients wanted. I chose an existing client to convert to hourly billing who already was loyal to my firm because of prior work. Before he came to me in 2013, he prepared his own 1040 with approximately a dozen complex K-1s as a private equity investor. I found an error on his self-prepared 2012 return where he had reported capital gains as ordinary royalty income, so I amended his return to save him $150,000!

I knew this was the first client I wanted to convert to a value priced package because I had his ultimate trust and approval, so I took his $3,500 in annual fees to a $14,000 bill by simply evaluating his last filed tax returns and producing an ROI estimate of additional niche offerings we could do. For example, we added a family limited partnership and family office to the mix, and all the work was done in spreadsheets like this one you can download and review. He was more than happy to pay the increased cost and was very excited about my expanded service offering. I initially estimated a net tax savings of $15,000, but his final actual net savings was $81,000 in year one. His investment in my tax planning services gave him an 1,158 percent ROI. We were both ecstatic! As an aside, if you are wondering where I found the time to do this kind of work, I sold 60 percent of my client work to another local CPA. I analyzed who I could truly help in my niche and let go of the rest.

I continued replicating this formula to projects, and retroactively prove our worth to existing and potential clients, while improving our ROI sheet. When we couldn’t estimate a number value for something such as “reducing your audit risk,” we simply wrote “priceless” next to the line item. What we created was essentially a super-charged spreadsheet that could project tax savings and our clients’ ROI for our services, and later, we could use that ROI sheet to prove our worth during annual reviews to secure contracts.

With the immense success and improvements over the last four years, I’ve now converted the spreadsheet workbook into a full-fledged web software, with checklists, strategy templates, client to dos, and firm tasks-called TaxPlanIQ. Having a custom tax software to quote, communicate, and maintain strategies with our clients was a huge competitive advantage.

Example #2: Advising during COVID-19

Another example of showing value is how we helped clients during COVID-19. We set up virtual town halls for clients and prospects on stimulus loans, economic impact payments, and other pressing matters. I will never forget what one client said at the end of the first Zoom town hall: “I now know our business and livelihood will be OK, thanks to you.” We also stumbled across a one-time tax strategy to use called Section 139, which allows businesses to deduct staff members’ personal expenses due to a pandemic. This one idea, alone, can easily save a client $1,000 on every $3,000 in qualified expenditures, and our average client had well over that threshold. We used our time and energy to develop out how to implement this, and hired an attorney to collaborate. We also created templates in taxplanIQ that tracks it all.

Example #3: Communications is king

A final example of showing value stresses the importance of two-way communications. I admit I forgot how much value that adds, and I don’t want you to have the same issue. In a fast-paced, revolutionary practice, mistakes will happen. There is no reward without risk, as we are learning and improving every day to stay ahead.

Recently, a client asked us to complete custom bill pay work on transactions averaging in the millions, and I overquoted him substantially for the work via email. I became overconfident in our assumed value without showing it to him first. The client felt taken advantage of, and I felt like a terrible person. Of course, it was a quick decision to throw a big number out when I was multitasking and it was not intentional. Still, once I simply explained our position and visualized it for them, he assured me nothing had changed from his perspective on our valuable relationship and we could move forward. I appreciated his grace and forgiveness in my flippancy. I should have admitted I didn’t know the right pricing for such a custom service and discussed what a fair rate would be with him.

The most important thing I’ve learned overall in proving value to a client is that you must openly and honestly verbally communicate the cost and benefits upfront. Sending a bill afterward without warning will still feel like a bomb to unexpecting clients, even if the work is phenomenal. Similarly, becoming too lax and emailing a quote without any substantiation will cause friction. Finally, telling someone your hourly rate will cause frustration because the client has no idea of the number of hours involved. This type of communication, or lack thereof. may be common practice in a traditional firm, but it is not a good best practice.

Trust proves value

I hope these examples show how much value you can tangibly and intangibly show in your firm, while gaining exceptional trust from your clients and making a huge difference in their lives. 

I leave you with one my favorite testimonials from one of our clients:  “People think I am crazy for paying this much money to my CPA, but at the end of the day, it is one of my best investments because I can call them any time, with any crazy question, and you guys will look into it right away and give me the best advice. You are Wonder Women!” – James B