In my previous blog post on this topic, I talked about stealing an idea from “The Big Boys” when it comes to marketing your business. Develop service packages. You can read Part 1 here.
When designing these packages, realize all the “extras” you can offer. For instance:
- More face-to-face meetings
- Availability after work hours
- Access to a private online portal
- Membership site
- Customized reports both printed and sent as a PDF
- A visit to a business owner’s location for a “Lunch and Learn” session on finances
- A workbook that includes specific directions for completing a financial task
- An annual special dinner when your client can “ask you anything”
Really, there is almost no limit to the various add-ons you could offer to sweeten the deal. And if you offer any of the above already (and you’re not marketing it as anything special)—STOP! I know this might not sit right with you but indulge me.
The most important asset you have is your time. The second most important asset is your knowledge. For many years, advisors have given away both ‒ often without fair compensation. I love advisors. I have rarely met one I didn’t instantly like.
It’s because advisors are overall good people who genuinely want to help others make better use of their money. Frequently, this trait allows others to take advantage of their time and expertise. As a result, many advisors run into the problem of not being valued and receiving push-back regarding their fees.
People push back because they don’t understand the value you bring to them. Therefore, tiered pricing can be advantageous. A tiered pricing table clearly spells out for your clients and prospects exactly what you do offer and what the person will receive when they hire you.
Catering to the Elite Buyer
I have a story regarding the type of people who always want the best. It has to do with one of the most common automobile items: tires.
Sure, you can buy the Nitto Invo Luxury Sport Radial Tire for just $370 a pop. I mean, it’s okay for most cars. But what about a tire encrusted in gold and diamonds? Now that’s elite!
In 2016, a company in Dubai (where else?) produced their first set of tires with 24-carat gold leaf and embedded diamonds. Each tire featured the sparkling stones in the firm’s logo. Gold leaf was placed around the edges in a checker pattern.
They were first designed in Dubai, and then transported to Italy, where an artisan jeweler decorated the tires with diamonds. Then, the four tires were shipped back to Dubai where gold leaf was applied by the same guy who worked on Abu Dhabi’s presidential palace. The price? A mere $600,000.
I mean, really… who wouldn’t want to pay half a million for a set of diamond and gold tires? The luxury tire company donated the money to the Zenises Foundation, which focuses on improving access to education around the globe (a lovely gesture).
The moral of this story is that if you create something elite ‒ something most people wouldn’t want or couldn’t afford ‒ you can be sure SOMEONE will buy it if you position it right. And if it’s marketed to the right audience. Dubai is known for its outlandish extravagance. University parking lots are filled with six-figure cars. They’ll gold-plate just about anything over there.
How can you use this information for tiered pricing? Pull a Neiman-Marcus. The high-end retail store Neiman-Marcus puts out a Christmas Catalog every year, filled with luxury gifts. They also include items only a billionaire could afford.
Do many people order these over-the-top expensive gifts? No. But it only takes one half-million-dollar sale to make it worth Neiman-Marcus’ time to include it in their selection of gifts.
One such item from their 2017 Christmas Catalog was His & Hers Rolls Royce Limited Edition Dawn Coupes ($439,625 and $445,750 respectively). I have no doubt someone bought those as a treat for themselves and a loved one.
Or do what Starbucks used to do. Starbucks sells gallons of coffee which cost pennies to make yet they charge dollars. However, when they had an online store, they also sold a $1,295 Nuova Simonelli® professional-grade espresso coffee machine on their site. Believe me, someone bought those machines.
If you don’t have a “luxury model” of whatever you offer, why not? Those who have the money to buy expensive items buy them because they can. It’s a psychological thrill for them. And you might be missing out on all the fun.
What’s really a kick is writing copy for these items. Performance… commercial-grade components… professional… ease and style… This is the kind of copy that makes even the biggest coffee snob drool with anticipation.
This is why you want to plan on offering an ultimate, elite, and “everything-and-the-kitchen-sink” type of service for your tiered package. Not only does it appeal to the high-value client who can afford it—it also serves as motivation for those in the middle. If they put in some effort, they also could reach the exclusive level. There is a lot of psychology attached to pricing and product positioning. Tiered packages are one way to tap into it and generate more revenue for your business.
I have spoken with several advisors who have told me they offer financial advice all the time—and often without any type of compensation.
I also realize many times, advisors may feel as though they don’t get the same type of respect as doctors and lawyers, even though they, too, offer an unbelievably valuable service. However, my brother is a lawyer and he charges a pretty penny for his time. If someone wants to find out if they have a legal reason to hire him, he will meet with them and briefly assess the need.
But after determining that, he goes into “pay me” mode. He doesn’t offer free legal advice, much less details for any “do-it-yourself” solution (although such solutions are limited within the law profession).
Compare this approach with many advisors. For instance, today the accounting profession is changing at a fast rate and many tasks which before were handled by junior staff are now achieved with software programs and artificial intelligence products.
This is why the President and CEO of the American Institute of Certified Public Advisors (AICPA) Barry C. Melancon, Accountant, CGMA, strongly urged advisors to move into becoming more of a financial advisor during his keynote address on “The State of the Profession” at the 2017 Digital Accountant Conference, held in San Francisco by AICPA technology subsidiary CPA.com.
Mr. Melancon pointed out advisors need to learn new skills, but also unlearn old ways of thinking. Firm models will need to change, both internally—how many entry-level to more experienced staff to have on your team—and externally—how you manage your relationships with clients. He mentioned he has seen more firms experimenting with subscription-based relationships, where for a flat monthly fee; the outside accountant takes care of all a client’s accounting needs.
He also mentioned the enormous recent above-trend growth in technology-enabled client advisory services as a great example of the kind of higher-end offerings advisors can deliver. Again, this is an area that advisors can add to the specialized and more robust tiered packages.
Financial advice is valuable to your clients. If positioned in the right light and supported with strong marketing messages, your clients will also see the value and realize how important it is to invest in their financial future.
This is a marketing concept that few advisors are using to grow their practice. Membership groups can be a way to entice new clients and create curiosity and anticipation with your current clients.
What is a membership group? It’s really nothing more than a private group you control. You set the guidelines for who belongs to the group and you enforce access to the group in a consistent way. Businesses that have a membership group often choose others as administrators to help run the membership group.
For instance, you could use a membership group as a bonus for clients who sign up for the most expensive service in your tiered pricing table. The membership group could be used as another way to deliver value to your clients.
A good marketing “rule of thumb” is this: the more access a client has to you, the higher the fee you should charge. Many accounting and bookkeeping practice owners have others perform the bulk of servicing the client. However, there are other clients who for various reasons, place them in a different category (such as long-term clients or business clients who are in the top 10% for yearly revenue).
In that case, treat your best clients in a special way that demonstrates how much you appreciate their business. No matter how long a client has been with you, showing appreciation in tangible ways will always be appreciated.
Here are some ideas for where to host your membership group.
Offline (meeting times could be once a month or once a quarter):
- Local restaurants
- Local colleges
- Chambers of Commerce meeting rooms
- Corporate or small business meeting rooms
- Whole Foods
- A private portal to your website
- A private Facebook group
- A LinkedIn Group
- A membership forum
- com: it offers a way to connect with people online and allows you to send invites for live meetings in your area
The important point is to set a calendar for events and create an agenda. If you have an online membership site, respond quickly to comments and questions. Ask for input and feedback from your members. Have those who are administrators or moderators actively oversee the group and keep you informed if you’re unable to participate on a regular basis.
With a little effort, your membership group could go a long way toward deepening your client’s loyalty to your business. A membership group also allows you to distribute marketing information such as newsletters, recorded interviews, videos, and more to give your clients helpful content they can use.
Partial excerpts taken from the book, The Maverick Advisor: The New Rules of Marketing for Financial Advisors and Consultants – Get Great Clients, More Respect, and the Fees You Deserve, by Mary Rose Maguire.