Change Your Pricing Mindset

Welcome to Accountants Law Pod, where accounting professionals and law firms converge. Hosted by Lynda Artesani, Sarah Prevost, and Stephen Libhart.

Welcome back to the podcast, everyone. And how are you doing, Sarah?

Oh, outside of having a cold after, what, 3 years of not having one?

I know, you jinxed yourself.

I did.

Traffic. You can't talk about traffic, right? Oh, right. That one time I'm like, my gig is up. Don't talk about traffic. Don't talk about your flight being ruined, which you've been on.

How are you doing? Pretty good. Good.

So this week we're going to talk about changing your pricing mindset. And I think that's definitely something if you're working with attorneys, I think especially if you are going to be specializing in that like we are. That you have the ability to change your pricing mindset once you get yourself, you dig in your heels and you learn a lot more and you can start to look towards raising your prices because you know more. We definitely provide a higher level than some of the files that come our way that we look and like, oh, this person did not know trust accounting or this person did not know client costs or this person didn't book it this way. Or what was the one the other day? Oh my God, look at this chart of accounts. This person didn't know accounting at all. Because the chart of accounts started like with the 1000s and ended in the 4s. It didn't go any further than that.

Surprising. Another accounting professional that did it that way. Yeah.

That term loosely in that case.

Yeah.

Yeah. But I think, I think changing your mindset, and this is something actually because I was going through all my files recently and looking at my original legacy ones and the pricing that I have on them and the service I'm providing. I think they're— I'm looking at these numbers going, why am I, why am I doing this? These are so low. I need to raise them. I've been with these clients forever, like 20 years, 15 years, a long time. But the pricing isn't kept up with the times. So changing your mindset. is important as you start to get more advanced in your practice. You should be able to charge more, and you don't discount that. Oh, it only takes me 10 minutes to do that. But you took how long to get the knowledge to be able to do that in 10 minutes? Yeah, yeah.

What's that old phrase that people always talk about, or that old story that they talk about, the guy that charged the ridiculous amount just to hammer the— just to know where to hammer on the steam engine that he went in to fix. Or yeah, that, um, I think, uh, a lot of it too for clients as well, as much as it is for us, is, um, getting— it's not just the fair market value, but getting comfortable with like your own beliefs in it. Like you're saying, Lynda, you have to know what your value is. And I think it's not an easy thing to do.

It comes from confidence, right? And if you don't have confidence, especially when you're first starting out, it's hard to have that confidence. And I think some of that confidence can build as you get more and more clients where you're hitting capacity. Then you're like, ah, screw it, I'm gonna throw this number at it. And then when people still accept it, you're like, oh, what happens when we have a quote, we put out a quote and it's accepted within 2 seconds? I'm like, darn it, I'm gonna put up a higher because they took it too fast. They didn't think about it. They were gonna hire us any minute no matter what we put on it.

Any psychology behind it, really, you never know.

Sure.

Everyone has a different barometer to pricing of what they'll accept or what they think is the value. I do feel that even if you're in the middle, I mean, you meet tenure firms and they are at this tenure price point, but also where are they at in their own personal lives versus if you're in the middle, and you're not seeing maybe the— maybe your marketing efforts have changed, maybe you're not seeing the same ebb and flow. Do you look at— do you turn and look at your pricing model or do you turn and look at the productivity? And like you're saying to Capacity, it's centered around a whole bunch of metrics to figure out what that is and what the value is. So I do feel that pricing is accepted so quickly. I'm— I don't know that I look at it in the same way. I just—

oh, it— Oh, I do.

Right? This is—

You might have sold that job in the conversation and see if it was acceptable to them.

Exactly. Yeah.

That's why they pull the trigger so quick. But it does— sometimes I sit there going, oh, what money did I leave on the table there that I probably could have maybe gotten a little bit higher.

Or what are the other opportunities to reevaluate at a later date? It's just similar to your life changes in a snap, right? So you don't realize you need an attorney for this. I'm just going to use the happy place of you won the lotto. Oh my God, you need an attorney for that.

Every client you put a quote out to signed, then you're definitely not pricing yourself right.

That's an indication.

Yeah, that's a big red flag. You should be getting maybe 50% of your, your clients signing up with you, not, not 100. If it's 100, you probably should go back and look at your, your math and figure out what you're doing wrong. And I know we've had multiple ways. I've watched you go through this whole method of figuring out what to charge. And, and there's other ways that we do it where maybe we're looking at the monthly capacity of what would we charge monthly. And if we're doing a cleanup, What's that times 12? Because you never want to put a price together, and I've done this, this is how I know this is, this is learning from somebody who did it the wrong way. Put a price together like, okay, this is what I think this is worth. And then when the person comes back to you, they go, you give them the monthly and they're like, well, why do I think, they're thinking in their mind the monthly is gonna be whatever you gave them divided by the months that you were, you were fixing. And then you give them this other number and they're like, where'd this number come from? This is way off. You have to make sure you're getting paid enough per month. That when you give that monthly price later on down the road, which you should do it later on, make sure you really like working with them. Yeah. Don't undercut yourself there because really, just because you can get through it quicker because you have tools or methods or processes or workflow.

Well, it's a different body of work is what I was just going to offer up. It's not due to the tools or so forth. You're— when you're doing a cleanup or an evaluation, a research, Like in it too, for attorneys, they have to do this heavy lifting of research to validate how the case is going to go, right? It's a different body of work than if you're producing something on a cadence of, a monthly cadence of accuracy and efforts and you're in the trenches with them. So pricing, going back to the beginning, changing your mindset. To what your point is, pricing for each particular project or job does have a different price tier. It doesn't mean that it should be less or more when you're delivering service in a today moment, in an everyday yearly contract, let's say, or engagement. It is different to what you brought up earlier in one of our conversations of are you engaging me at the end of year? And I'm doing this entire look back. Versus did you engage me throughout the year? Would have probably made it easier.

Right, right, exactly. It does. It is easier to do a cleanup than to do monthly ongoing. So there is a factor there. But I think sometimes I've done it where I've priced the cleanup job too low. And then when I go to do the month I can't possibly do the monthly by the cleanup. Say it's a year divided by 12. Yeah. That doesn't happen. So, but that's what they're thinking and understanding their mindset as well of being the recipient of your pricing.

Yeah. And I think it makes sense too if you, there's a fear behind pricing.

So there's a fear behind, Yeah. If I feel comfortable pricing this out at this number, I feel like if I go a little higher, it's easier just to skip that raising the rates. I'm guilty of it. And then not doing it where I'm rightfully, I should be getting paid more as I go along, but I just don't do it. It's easier just to kind of not, not, um, not really— So have that conversation with the client, because then they're gonna— some of them are gonna come back at you going, what, what is this? And so you should have it in your contract that you automatically increase, but you should still send a letter out reminding them of that contract and that amount, because I think sometimes the clients um, regardless if it's in the contract, they just get really upset when you raise their rate and don't tell them.

So one thing I wanted to ask you though is, we hear this, we've heard this before, attracting the right client. What does that mean exactly?

Yeah, right, exactly. What does that mean?

What does it mean? Because then how does it your skill, to your point, you've achieved a certain skill set. You've achieved us— we have, you and I. I can certainly tell we've been working together long enough. We can open up a file and we could spot it. We don't even have to go too far and we've already figured out, oh, we've solved a piece of it. We may not know the whole thing, but we've got a piece.

Mm-hmm.

So when I think of that, when I hear that phrase, attracting the right client, my thought process goes to what vertical am I in? Am I serving it that I like?

Right.

That's what I think of. That's to me, a right client.

Yes, I agree with you on that. It's definitely a right client. I think it's hard to— I mean, I know what my perfect client would be, but one that doesn't go into QuickBooks at all. I can give you boxes to check off of what a perfect client is. One who's really excited about their firm. And we've got a couple of the perfect clients. We've got some that we adore and they're excited about their business and it's fun to work with them. It's fun to go through whatever they wanna do with their path and how they wanna work and they're engaged and they're responsive and all of that. And those are the clients that make it fun to work. But then there's other clients that are not responsive and they're not, they just, you'd never hear from them. Is that a good client or a bad client? You don't ever hear from them. You just do the work and they, it's done. Yeah. Does that make them a bad client?

No. No. Yeah, it might be they're really busy and they're—

Most attorneys are really busy too. Yeah.

Yeah. And I think of the other side of it for the attorney. What's the right client for you? Because you might have opened up, you might be— not that you're new. Let's take the middle. You've been at practice. You've decided to add another practice area. Are you equipped for that practice area? Do you have the right team to support you? Is it pulling you down a little bit because you have to spend more time? Well, then that's part of the involving people like us to say, okay, what does this look like for you to help you? Does it make sense to add this segment? Are your clients naturally asking for it? Because maybe you're so trusted that that knowledge base translates to, let's say you're, um, Wills and Estates, right? And then, but yet you're getting business questions because those seem to tie together, right? Like that, that seems to work. Does that work to naturally have somebody that has that attorney hat on that knows business side of it and support what Wills and Estates do on the personal side? Just as an example.

Together. Yeah, I mean that, I mean that's something, and these are the conversations you can have with clients that if you have kind of engagement where you're more involved in a deeper level of just not just doing the data part of the work, which is the better kind of client for us to have. And I think it's a better kind of client for anybody in the future to have because eventually this lot of what we do is not gonna be, not gonna be handled by a person. It's gonna be handled by the software.

Yes.

So you're gonna need to have that expertise and now's the time to do it. Put yourself front-facing forward Mm-hmm. That's that person that they can go to. We just had this conversation in the Law Lab where we get clients that hire these coaches and they don't even know that they could just come to us directly, that we could help them through everything and then and more because we have more knowledge of the background of everything in their business and a lot of their personal life. We're actually able to help them more. And I just don't know why they don't see that as, um, maybe they just see us as the data entry people too. I mean, I don't know why. We just had the conversation because it was like, we get really— one, this young lady was like, I get really mad when I see that they've got this person. Like, well, what about me? I could do this all for you for a lot less money than you're paying the coach. And I think a lot of times they don't see us as that. And the word coach makes you get paid more. And I think you don't have to have a lot of credentials to be a coach, unfortunately.

And no, it's not a— it's not— there are certified ones, but it's not a Yeah. It's not in the same. So the funny thing I think of when you say these things is, as the number one thing when you're interviewing, when you hear people interviewing someone who has of great wealth, their key person is their accountant.

Yeah. Right.

Oh, it's just, honestly, they don't say their coach.

No.

They say accountant. So if you wanna change your mindset on how you look at things, start engaging at a more meaningful level is what I'm saying. And you might have to pay for that.

If you're just paying for your taxes to be done, that's not the same thing as helping you through and navigating through all the benefits of tax strategy.

We know the numbers. We can help you. Like, we know those numbers. Right, exactly.

Yeah.

What's that? What is the film? The Accountant? Isn't that the movie?

The Accountant with—

Shoot, he knew all the numbers.

He knew all the numbers. Yeah.

Like, should have been asking, but I found it interesting. I've been following a few people.

Ben Affleck.

Yes, Ben Affleck. They're following a few people where they're interviewing wealthy, successful individuals. How'd you get there? And a common theme I hear is watch your money, know your worth, your network. Obviously, those are things that we've all been hearing. And work hard. One gentleman I was listening to, he's like, it's not like your generation. He's pointing to the young person and saying, it's not like your generation who just expects that. Work 2 or 3 days.

Yeah. And think it's going to land in their lap. I know. I don't know where that mindset came from other than the fact that I think the generation that thinks they can work 2 or 3 days and they don't want to work as much as their parent. Trying to do the opposite of your parent, which is every generation always wants to do the opposite of the parent. Yeah. It's not gonna get them far if you're gonna think that your work-life harmony is gonna be all about just sitting on the couch watching movies. Not gonna work or—

Yeah.

Park or whatever. I mean, you have to factor that in. You're probably not gonna make the same amount of money as somebody who's working 7 days a week and working constantly working. It's more about work, do what you love. If you can do what you love, then it won't feel like work. I think that's the case. And it, and that, that won't always be all the time, but I think that, that the more you love something, the more you can come to that change of mindset because you're You're passionate about what you do. And we've had many times people have had conversations, you're really passionate about this. Yeah, we are. We really are.

We really are.

We are passionate about it because we do love the work and love the puzzle, which that's trust accounting and working with attorneys can be a puzzle right down to their compensation, their client costs, all these things that make it the complexities. But we like it. And I think that it's got to be for the right person. And once you get there, which is specialization, right? So it doesn't matter. They don't have to work with attorneys. They can be working with churches or working with construction.

It could be any shops, auto body shops. That's like a whole thing, right?

And you can get to the place where you're the, the expert in that.

Yeah.

And there's a different mindset about that, because you should get paid more, because you, regardless of passion, you're able to— you've got the knowledge. And that doesn't come for free. You pay for that. We pay to have— like, I pay to have a better Tesla, right? I didn't buy the one that's just the lowest one. I buy the one up. So, I mean, that's— but I'm paying for that. You're paying for that extra piece.

You know that value, which is to my point of in the initial where if somebody signs faster, is that really— it's the value. Like, there's a known value between each other. The thing I feel like you did bring up earlier, and I feel like it's a very good point, is the communication. We've stepped in it. We've done it ourselves individually, together. It doesn't matter how much. It's just having to communicate a little bit differently about it as not so much a warning, but hey, friendly reminder, this is going to happen. We also were— for us internally, we're trying to look at it at a different lens too is what do we have in the current engagement? What are we doing? Mm-hmm. How much time is being spent? How much time is being spent on the extras?

Yeah.

So, and that's prudent, I think, in all forms of business to evaluate your compensation idea of what you should be. It's a contract, so you just, what does that look like? But yeah, I feel like the takeaways are, Well, if you can niche, niche, great. If you don't, then you know your value of who you are in that engagement. If you're a generalist, I guess.

And if you are at capacity, you know, you can up your pricing to see—

Up your pricing.

It's a way to check the levels too, right? So you can always try it higher, and if nobody signs, then you can bring it back down. It's really, the problem sometimes is you, you meet somebody we get on a call, we really like that person. Oh, I really want to help that person. Sit back and go, okay, but I— you need to still be paid the right amount for it because you're going to sit there at the end of the day as you're doing the work and you're going to be sitting there going, oh, I don't want to work on this client. I'm not being paid my worth. And I think that shifting your mindset has to do with really producing a good quality.

It's value.

But you also have to be able to be compensated for it. Otherwise you're going to be unhappy. As I'm looking through my old list of clients, I'm like, all right, I am, you know, as I'm diving in and looking at it and looking at the costs involved that have gone up and I'm not, I'm not staying with it. I have to go forward. And if you lose the clients, you'd be surprised every time I've taken, and it takes courage to do this, right? To go in and raise your prices. But then I've not lost any, or I've maybe lose one that was gonna go anyway and just pushed it along a little quicker.

Mm-hmm.

But, um, you have to be okay with that too. So I think that that's part of it. And, and it's scary. Doing numbers, money, pricing is scary stuff. It's personal.

The big thing too, I will say, is it— when you're— if you're thinking of comparing yourself, or when that market research is going on, some people in our industry target other types of firms and try to beat— outbeat their pricing. It just, it goes back to that belief thing that you said, Lynda. You have to believe in yourself and hold strong. I mean, it is tough. It's not easy in every market, not just ours. In every market, there's an evolution of change right now. It's happening at such a tick of speed. So what are the things that you're gonna do differently and how are you gonna write those engagements and how do you wanna engage? And those are beliefs within yourself on your, how you're going to handle this. Going forward. True.

Very true. And I think, I think too that as you start to do this and you get into a stage where you're at a place where you're figuring it all out, the contract is key. It's pivotal to making sure that you're protected within the boundaries of what you're selling. It's really that piece of communication where you're completely clear with the client that they know what they're buying.

Yeah.

That's, it's always scary to hit that click to have it go forward and go out. 'Cause then once it's gone, you can't really edit it again. And I think that, that just knowing what you, what you feel like you're worth and getting paid for that is, is really, I think figuring that out is the hard part. And then once you figure it out, stick with it, but always kind of raise it up. Don't let it sit for 5 years like I've done and, and not gone back to that. You know, it's easy to sit back and not look at it.

It is easy to do that. I totally agree. That's such a valid point. Just give, allow yourself the opportunity, carve out that time. I'm saying it out loud and I'm saying it to myself at the same time. It's like you just—

It's sometimes too, if you have a friend that you talk to, I think sometimes friends will give you that boost. So like, I don't think you, because we always like kind of undercut what we really know and how people perceive us. So if you talk to a colleague or somebody like, oh no, I could see why you can charge more people. And people make assumptions too, but Oh yeah. You know, they, they're going to look at it and say that, oh, you really are an expert in this. You really know a lot. And I think that you should get paid for that and you should really be charging more for that. And sometimes you might need that little boost of a phone call from somebody that's gonna give you that ego boost that you just need a little bit to give yourself the confidence. 'Cause it's that confidence comes with experience and it comes with time. And in the beginning you feel like you're just fake and you're phony and you're trying to go through it and try to muscle through it and I know I should be charging more, but, and, and sometimes you, maybe you shouldn't. I mean, my first attorney client, I remember thinking, I don't know what to charge. I knew in my heart I should charge more. And I think I charged more to him first than I did the other ones that I had. And then he was helping me learn the industry. So I think that, um, it, it really, now today looking back, he's way underpriced, right? But I think, look, at the time I felt like I was getting compensated well for it and he was helping. So you have to factor in if you're just starting out, it's a different mindset than when you've been established. And that's another part of it. But you can get there. You definitely get there. And sometimes it just takes, it takes courage.

It does. Well, it takes courage to start a business for one. And then to manage it, have people, the whole thing. It's a whole journey, an entrepreneurial journey that we all take. So we took a chance on ourselves to start the business, taking a chance on ourselves as we put ourselves out there to engage on services. And same thing holds true no matter what you do.

Yeah. So I think kind of wrapping this up, if we look at mindset, it's really maybe put that sticky note on your computer. You've got this. I don't know.

Well, actually, you reminded me when you were talking just a moment ago, I was thinking in my mind what I do, and I still do it till today. I gravitated to listening to people that had talked about confidence and exuding confidence. So I'll just say, like, Mel Robbins was one. I really felt the keywords resonated with me, so it really boosted me. Gary Vaynerchuk was another one.

Yeah.

That worked for me. And obviously he's trended his stuff differently now. I mean, because it was all in the beginning is all about at that time, the hustle, but that's, that's not how we want to live as people. Um, so there, these like key people and there's more, there's a ton more and I still do it till today. And it's a good reminder to myself of, okay, I'm human. I'm one of many. I'm not the only one that fights the fight of going through this. Like, there's so many of us going through this and there's so much insecurity out there. So if it's not a friend, if it's just an outside podcast to revalidate it or helps you continue your education, and re-cement what you need to remind yourself of. I do that a lot. I, I use that a lot. And I think that's initially what happened when Lynda and I joined forces. It was this rebalancing of ideas together, and we just complemented each other in that way. And we still do today.

We still— We have the same work ethic. We have the same everything. We're different, but we have the same of a lot of things. And I think that that's critical, and it's helpful if you have a partner or even if you're in a mastermind group, those will help you realize that I really do. And you're investing that time in yourself. So those things like listening to those podcasts, they do make you feel more confident. And I think that's kind of where you're going to get that courage to go forward and really change your mindset. And really, I think, test it out. Even if you test it out on one, you'd be surprised. You'd be surprised. And it does— what did Seth tell you one time about, like, just what do you want for it? He had some kind of a saying that Seth David— Seth David.

Well, what gets you excited and gets you out of bed to do the work, right? But also in my mind, what I always translated that to is I have a lot of risk on the table right now. I'm not fearful of it, but I need to feed my family. I need to— Time for money. There is a threshold in which value dollar-wise I need to make, and which is exactly what clients do.

Yeah.

That's what I mean. There's so much to feed the beast. How much for every dollar earned, how much does it cost me on the other side? And so that's the questions that simple math.

And some of the things you taught me is never give a refund, which I always used to. If I had to, I would give a refund. Never get a refund. I'm trying to think of the other things that you've taught me that I'm like, oh, I'm not a big— Honestly, get paid up front.

Yeah. Well, and I hear this a lot. People always looking for discounts. Okay, fine. I get it. It's a great deal to get a good deal. But would I have paid for the value of that product if I liked it well enough, or that service if I liked it well enough without the discount? I ask myself those questions. We have just gotten into a culture that this is an expected thing, and then it's cheaper and cheaper and cheaper. So just reevaluate— it just reevaluates your perception of how to price and how you engage. And I learned this from Deb Tilsheimer. with her clients. If she goes to her client for— she services restaurants. If she goes into that establishment, she is not expecting a discount. She wants her full price, nothing comped, and she pays her bill and tips well. That's what she does. You pay me for a service and vice versa the other way.

So—

That's, that's true.

That's your value. Yeah, I totally get that.

And it helps you research the client and understand what is— what am I engaging on services-wise? It trains you, like, to your point, learning. You're learning that niche or that education.

When you're just starting out, I mean, it definitely is different pricing mindset than when you've been established. When I first started out, I was like, I just need to pay my Blue Cross bill. I just need to make a paycheck. I mean, those are the things that go through your head. Those are the more important things. And yeah, I'm not, I'm not getting paid the right amount, but I'm just starting out and it, it builds and it changes. So know that, that if you're in that same place or that's where you're sitting right now and you're looking at us going, oh, they probably charge 10 times what we charge. Well, we've had many more years of doing it.

Yeah.

So yes, probably.

So it's really pricing yourself in alignment with your skillset and your market value. And you're like, you. So really, that's kind of the—

Yeah. You're not at the beginning. You're just sitting back like, I'm hoping that people don't notice that I don't know. And it's okay to not know and it's okay to learn as you go. I don't think, I don't think we give enough.

Unless you're a surgeon, please. I would expect.

No, no. Yeah. No, but if you're, I mean, it's okay if you don't know something, it's okay to let them know that you don't know.

Yeah.

I had that happen actually this morning with a text that came in and I'm like, What the heck does that mean? What is this shorthand you just wrote to me? And I had to write back and they're like, oh, haha, this is what it meant. And I'm like, okay, you're speaking in legalese and I'm not, you know, I'm not picking up on— I don't know that acronym. So yeah, and it was something I would have never guessed. So glad I asked. But those are the things that you will learn as you go. And yeah, but yeah. Yeah, standing in confidence, standing in your worth and probably should just raise your prices 10%.

Well, you bring up a really good point of inflation, and you see this now with these little micro strikes in these different places. People are still struggling because it hasn't rebalanced quite yet. And so, yeah, inflation is a big dictator too as well.

I mean, my costs went up, you know, put in the cost of these older ones, put the payrolls in it. I have to And I didn't price it. I didn't keep raising their prices every year like Intuit has done to me. I have to do that. I don't feel— I feel weird, like $10, $15. But really, you should, because you multiply it by that, by X, by however many clients you have, by, by the months. It's a lot of money you're losing.

Quite a bit. Yeah.

Adds up. So you make sure that you're covering your cost. And so it's really eye-opening to sit down and really look at what you have, what it's costing you, what's the time costing you, what is the actual cost of the work. And if you're upside down in it, then you shouldn't care if your client leaves you if you raise the rate because you don't wanna be costing you money to do the work. And I've had those days where a client— I had a client that was costing me $15 a month. I'm like, what am I doing? And I felt bad for the person. He was a wonderful human being, but I can't— you can't let your heart step in front of all that. That's why you really have to step—

Yeah. Yeah. So, well, this was a good topic. Thank you.

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And we didn't mention we're Steve-less today.

Oh shoot. Our cohort, he's out gallivanting around in an RV.

Gallivanting out.

Or no, in an Airstream. Yeah.

Helping his sheepdog win some kind of a contest. So I hope your dog won, Steve.

Oh my gosh. I feel so bad. I've called it the Airbus. I keep calling it other things. It's a really beautiful thing that he has.

He'll love it when he hears us say that you called it an airport.

We miss you, by the way, Steve.

Bye.

Bye, everybody.