Futrli by Sage recently had the opportunity to sit down with Will Farnell, to gain insights into his vision for combining cutting-edge technology with a relationship-centred approach to accounting. Here are some pricing mistakes and the lessons Will has learned along his journey:
Fixed pricing
One of the biggest mistakes Will learned while developing his firm was fixed pricing.
In 2008, Will thought he had made a smart call by introducing fixed fees. With that, he closed the door to being able to upsell anything.
He thought this model would cover 95% of his clients' needs. Unfortunately, this resulted in keeping prices the same for several years.
"I had a client that I charged £150.00 a month in 2008… and eight years later, we reviewed our fees. This client was doing £1.6 million in revenue. They had 34 people on the payroll, and we were still charging £150.00 a month."
And during that time… Do you think Will was providing pricing advice for his clients? Of course, he was!
Will and the team at Farnell Clarke realised they needed to move away from a fixed pricing model and review the ways that they priced their offerings in the same ways that they would their clients.
Scope creep
"The second big mistake I made was managing scope well. We ended up performing work that was outside of what we had intended to deliver."
Will Farnell resolved these challenges at Farnell Clarke by defining what was in scope. If you know what is in scope, it's easy to know what's out.
Knowing when something is outside of the scope provided by your monthly fees for your clients helps facilitate discussions around new advisory work.
Knowing when to charge and when to invest in a relationship
Will has taken different approaches to investing in a relationship with clients and knowing when to charge for services.
"I've always said that if a client comes into your office and comes in for a meeting for half an hour then that's a great opportunity to deepen a relationship and potentially find opportunities to add more value to their business."
The key point here is that as accountants, Farnell Clarke focus on helping clients make more money and help them grow their businesses.
The rest takes care of itself.
Rather than thinking about which clients will buy cash flow forecasting, they look at which of their clients need help now to understand their cash positions. From there they help them achieve that through using tech.
Instead of thinking, "We have invested in tech solutions, how do we sell this tech to clients?" Try thinking, "How can we add value to our client through the solutions we have."
We've had small businesses project their cash flow in Futrli only to find that they're on the way to going bust.
Advisors have stepped in, demonstrated the changes they need to make and forecasted different scenarios.
The companies learned what they needed to ensure they stayed in the game.
The tech solution solved a problem, it wasn't an add-on. It added value.
About Futrli by Sage
Futrli by Sage is the ultimate advisory solution for accountants and bookkeepers. Let predictions inform your clients' business decisions. Synchronise to your clients' ledgers and let thousands of algorithms process their financial data. See three-year cash flow forecasts, use drag and drop reporting, and spend less time in spreadsheets.
