Discounting Your Services Cripples Your Bottom Line

Navigating Your Initial Consultation

You’re a champion for your clients. In fact, you happily refer business their way all the time. It’s easy to promote what your clients do and why someone ought to hire them. Then why does selling your own services seem difficult?

When you think about it, some parts of the consultation are easier than others. You don’t mind asking targeted questions to gather information. And, you expertly assess a potential client’s accounting needs.

The accounting professionals I speak with claim discomfort during the initial consultation. As a result, they frequently end up discounting their services.

The most awkward parts include:

Transition to the Close

You asked all your questions, you pitched your services and now it’s time to close the deal. When the conversation transitions to the close, you sense a subtle shift within. The close, especially since you lack a sales background, intimidates you.

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If you get too nervous, you skip this part altogether.

Navigating through this part of the sales conversation feels like an effort. You do everything possible to avoid seeming pushy.

A light sweat breaks out above your brow, your voice slightly speeds up, a nervous giggle escapes and you break eye contact.

Which part gets you uncomfortable?

• The extended silence which seems to last forever.
• You dread the request for a discount.
• An objection about your prices.

Simply the thought of pushback raises anxiety. When familiar insecurities flare up, you do what’s necessary to reduce the inner tension. So, you quickly lower your rates to win new business.

Discounts are Epidemic

Breaking the silence with a discount offers immediate relief. Although this removes most of the tension, there’s a high cost to lowering your rates. The discounts add up over time.

Consider what discounting your services secretly communicates:

1. Lowered confidence. Your confidence influence your rates. Your bank account doesn’t build as quickly when you lack confidence about your offer. Discounts, over time, chip away your profits.
2. First impressions. First impressions turn into long, lasting memories. Discounting your accounting services during the initial consultation means you open the door for future rate reductions. Basically, a one-time instance turns into an expectation.
3. Low value. Clients judge the quality of your service according to your prices. Low rates equal low quality. Are price-sensitive clients your ideal client?
4. Integrity and trust. Say what you mean. When you state your price, don’t back pedal. This chips away at their trust in you. And, your confidence lowers.
5. Low quality. Discounts spotlight your price rather than the quality of your work. By competing on price, you prioritize volume instead of quality service.
6. Lowered profits. Do the math. Discounts lower your profit margin. You have to work with more clients to hit your revenue goals. It’s like a dog chasing its tail – you expend a lot of energy while going around in circles. What’s the impact of lowered profits in your accounting practice?

Basic, easy and straightforward

Many of your clients don’t fully understand accounting. How often does the conversation start with a claim that their needs are easy, basic and straightforward? Those words signal they expect a cheap price.

I teach my clients how to confidently navigate through the initial consultation. Rather than selling, they lead clients through a value conversation. By asking specific questions, their ideal client naturally asks, “How do we get started?”

Rather than sell, lead clients through a value conversation. When you ask specific questions, your ideal client naturally asks, “How do we get started?” Read full post. #getpaidwhatyoureworth Click To Tweet

With this formula, you don’t offer a discount.

Create a No Discount Policy

After you share your fees, some people naturally ask about a discount. If you’re tired of caving in to the request, then let’s fix that. All you need to do is develop a new response to this request.

First, create a no discount policy. Apply this to family and friends, too. It’s easier when you don’t play favorites.

Consistency across the board keeps things clean and simple. The next time you receive a discount request refer to your policy. Avoid offering an explanation. Simply state it; then move on.

Stop Discounting Your Services

Practice your new response during a dress rehearsal. A little practice prepares you for the real deal. Gradually, you become more comfortable with your new lines.

I realize you’re service oriented and you want people to like you. However, stand your ground. By doing so, you establish a healthy boundary with your new client.

How often do you agree to something and then regret your response? Saying “yes” when you mean “no” causes resentment. Plus, this lower your profits.

Ready for some discount alternatives? Follow these 5 strategies to create your new response to discounts:

1. Prepay option. Offer your clients an incentive to prepay in full. With this pricing option, you get paid before you do the work.
2. Introductory offer. Create an introductory special for new clients. They start with a specific low-risk offer. The rest of your services; however, remain at your regular rate.
3. Packages. Shift away from ala carte services – where you offer them one service at a time. Offer package options which bundle your accounting services together. Separating your fees from time increases your profit margin.
4. Time sensitive offerings. If your business has seasonal ups and downs, then offer a limited time special for a particular service.
5. Negotiate value. Some clients can’t afford your regular packages. Although you may feel sorry for them, discounting your services isn’t the solution. Under those circumstances, remove some select services to adjust the price.

Stick to Your Rates

Imagine adding an additional $56k once you stop discounting your services. That’s exactly what happened for one of my bookkeeping clients once she followed these steps.

Change the way you approach your initial consultations. Rather than compete on price, start to emphasize value. Then, stick to your rates – without apology.

When you separate your fees from time, your bank account grows, your self-confidence builds and you engage clients who respect you.

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