How to Price Your Products and Services | Don’t Be a Hog – Ask Clay Anything

Show Notes

Description – On this special podcast-only edition of the Thrivetime Show we are answering a question from a Thrive client with Clay Clark and Dr Z about how to price your product or services.

Question from Thriver:

Hi, I’m a current coaching client and I have a question for Clay and Z.  In my industry, many consultants advise accountants to use value pricing for certain services that go beyond the traditional compliance work of tax returns, bookkeeping, etc..

1. Clay agrees with this portion of the questions
   1. AMPLE EXAMPLE – over delivering – dominos
      1. Only charge ½ price on first order
      2. If there is a dispute he will give the benefit of the doubt to the customer

For instance, cash flow forecasting or tax planning for a client may have a potential value to a client of tens of thousands to hundreds of thousands of dollars. From an ethical perspective, what is your opinion on charging more for a service based on the value you bring that client versus having a set fee for every client?

1. ACTION STEP – Ask yourself what the end game is.

Also, I’ve heard you and others talk about charging a fair price and recommend getting at least a 30% profit margin.

1. AMPLE EXAMPLE – Jewelry and Home Builders margins are skewed from the rule of thumb of 30%
2. ACTION STEP – Write down the amount of money you want per and divide it by the number of customers you can handle.

In your opinion is there a point where a profit margin could be too high?

1. This is when the hog gets slaughtered
   1. ACTION STEPS
      1. Mystery shop to find out what your competitors are doing
      2. Come up with a no-brainer to get people into the door
      3. WOW them so they come back and refer people to you.

I know some accountants that charge double, triple, and more what the majority of the market would charge and operate at a 50%-70%+ profit margin because they are bringing the value others are not and have clients willing to pay it.

1. If the market is chasing you then you can raise your prices but make sure that you are not being a hog.
2. Google reviews – you are currently at 56 reviews.. You absolutely must get to 100 reviews as soon as possible

ACTION STEP – mystery shop the competition to the penny and then decide what niche you want to go after them.