When buying, it’s not always about the price…in fact it’s almost never really about the price.

Poe Group Advisors Pricing

To help you put the below in context, I spent a portion of my early career selling materials to building contractors. The owner of the business was a mentor to me and one of the early lessons was the importance of knowing what your customer values.

The following is an excerpt from On Your Own! How to Start Your Own CPA Practice, available on Amazon.

Once I had been on the road and had called on a fairly large account that I was trying to bring to the business.  I had visited the key decision maker several times, and like many of my initial conversations early in my career with prospective customers; our discussion focused almost entirely on pricing…and who’s fault was that?  I had created several quotes for him and had spent considerable time on these…but I was getting nowhere.  I had gone as low as I could go and still make any kind of profit.  I came in from the road one day and was frustrated.  I said to Johnny, “I don’t understand.  We’re offering him the best pricing and I’ve called on him several times.  Why can’t I get the business?”  Somewhat typical of him, he looked at me for a second or two, paused and then very directly and in a matter of fact tone said, “Maybe he just likes the other salesman better than you.”  He then got up and walked off to leave me scratching my head.  Ouch!  I’ll always remember that moment of truth.

He was right, absolutely right; I was making it all about price and that wasn’t the customer’s real reason for not ordering.  You have to get to the real reason!  Price can be where customers try to start the conversation, but if you are only to compete on price, you probably won’t stay in business very long in public accounting.  You should be steering the conversation.  Are you steering discussions so that your primary focus is on the price of your services?  I am not suggesting that you avoid discussing price.  Quite the contrary, pricing should be discussed candidly and early with prospective clients, but you should be steering the discussion toward the value which supports your price.  In any business, there will always be a “cheaper” option.  You must focus on what differentiates you from everyone else.  You have to figure out what it is about your service that people especially appreciate.  People are not price sensitive, they are value sensitive.

 

About Brannon Poe:  Brannon is the founder of Poe Group Advisors and has been facilitating successful accounting practice transitions throughout the US and Canada since 2003. He is also the creator of Accounting Practice Academy. Brannon is the author of the Accounting Practice Insights Blog and hosts the Accountant’s Flight Plan” podcast with other top thought-leaders in the accounting profession. Brannon is an E&Y alumnus. He has worked with some of the most successful and seasoned CPAs in the industry and has been privy to the behind-the-scenes methods that these clients have used to build highly profitable practices along with capable and independent teams. Brannon has authored multiple books, including Accountant’s Flight Plan – Best Practices for Today’s Firms (published by both the AICPA and CPA Canada) and On Your Own: How to Start Your Own CPA Firm, Second Edition (published by the AICPA). Brannon is passionate about entrepreneurship and is the president-elect of EO Charleston (Entrepreneur’s Organization)