Effective Pricing Training: Foundations and First Steps

So today we'll be talking about the foundations and the things that you want to do first. We do have occasionally some users in here that are not part of Mark's academy. They're just users. They buy the software directly. And there could also be users that are on different levels of. Of the software, because there's three different levels that you can buy. So I'm on the top tier level. If it happens to be that you're seeing something that I'm displaying on my screen that isn't available on yours, it's likely because you need to upgrade your level. And you can reach out to Sarah on Mark's team to do that, or you can do it right in the software. I can show you where to do that as well. So for. I know there's a few people here, I know several of you know me already, but I want to do a really quick introduction and tell you why I love effective pricing as much as I do. And I'm hoping this will be a little inspiring to some of you. So I'm a certified professional bookkeeper. As I mentioned, I'm in southern Ontario in wine country of Niagara region, but I don't drink wine. I have a boutique firm, so we're fairly small in regards to the number of clients that I have and the number of team members that I have. But even though I have a small client list, we do large volumes of work for them because my ideal client is hands off. And we do 100% of the stuff for them. And I have my packages struck, kind of structured that way. And you'll see when I'm talking about things that I really lean them to with some of my communication and stuff that I really lean them towards choosing my premium package, which does let me do 100% of the stuff. So we do a lot of work for our clients. We have won the platinum award for best bookkeeping company five years in a row now. And I've also won a top 21 bookkeeping influencers in Canada awards. So we do have a few awards under our belt. If that's your kind of jam. I kind of like it feels good to be recognized. So I want to share with you some of the success that I had right from the very beginning when I started using effective pricing. So I'm going to show you some of the results from my first few quotes. And some of you will have heard me say that it took me a good one to two full days. Even though I didn't do it in days. It took me about eight to 14 hours to really get it set up the way that I wanted it to be. So did take some time. And that's not including watching the recordings and stuff. That's just fidgeting and tweaking my software and reviewing it and testing it and re changing something and testing it again. That took a lot of time. But gosh, I gotta tell you, it was so worth it. So the very first time that I used effective pricing, it took a lot of courage, let me tell you, to get over that hump. A lot of people don't use it. They've got it all set up. They don't use it because they're afraid to just jump over the edge a little bit. You gotta jump over the edge. You're not going to see results until you do. If you land flat on your face, big deal, you get up, you put a couple band aids on, you wait until you heal and you try it again, right? So my very first time using effective pricing and value pricing, I used to previously do hourly pricing or fixed rate, like menu pricing. So previously on an hourly rate, the work that this client needed to do, I would have billed them about $4,200 a year for what it would have the time that it would have taken me to do his file using effective pricing, the package that they chose was $18,000 a year. That was a difference of 13,800 a year, which is more than three times what I pay for Mark's Academy and the software. And I, and even the time that I invested to get the program up and running, I made it all back and then some in my very first quote. And this was years ago, so you can imagine how it's only gotten better since. Let me show you a couple more. The second time that I used effective pricing, I got over a 200% increase of what my previous quote for that client would have been. My third time, I do diagnostic reviews. One of the things that I always look at is, is what their accounting costs have been in the past. So I can see how much they've either budgeted or paid for their accounting services in the past. So I was able to see that the price that I quoted was 22. Not only was it $22,000 more than what I would have normally billed at an hourly rate, but it was also $30,000 a year more than what they paid their previous bookkeeper. So Mark talks all the time about how people are not price sensitive, they are value sensitive. So you know, and he, he talks about people that are using Apple products. Because they're so expensive, they could buy a cheaper tablet or a cheaper laptop or a cheaper phone, but they buy Apple because of the. The value that Apple brings and sells for their products. So for us, for our service, it's all about properly selling our value. Somebody is not going to pay $30,000 a year more than what they've been paying if they are price sensitive. Okay, let's keep going. So today I am going to jump into the software a little bit, but each session as we go, we're going to spend more and more time in the software. Today we are going to be in the PowerPoint a little bit because I want to talk about some of these foundational core concepts that you have to have a general understanding of before you start trying to use the software. It's like somebody trying to go and use QuickBooks that doesn't understand debits and credits. And we've all seen files come to us of business owners that have tried to do it on their own, and the file is a complete mess. If you go into effective pricing without having some core value pricing concepts, you're going to do the same thing. Your software is going to be a mess and you're not going to get optimal results that you would like. So research shows that customers want two things. They want certainty. They want to know the price up front before they commit to something, and they want to know choice. They'd like to be able to choose the package that suits their needs. I like to use restaurants as a comparison a lot because you go, you have a menu, you can pick and choose what you want. You can pick and choose what your side dish is going to be. You see the price right there. You know, I love seafood. I don't like going to a seafood restaurant and the menu says market price. Well, how do I know what market price is, is? So I usually steer away from things because I want the certainty of knowing how much my meal is going to cost me. Another core concept is that time billing does not give the customer certainty and will almost always sound more expensive. So if you're quoting an hourly rate like $100 an hour, that's going to sound like a lot of money to them. They have no point of reference of the value that you are delivering behind that hundred dollars an hour. So they will subconsciously and automatically start comparing it to other numbers in their head, such as hiring an employee that they could perhaps get for 30 or $40 an hour. And. And they're going to automatically assume that your rate is high. Another Thing to remember is people are not buying your time, they're buying the results that we are going to give them, the things that we're going to complete for them, and the benefit that they are going to see and get for the things that we are doing. Menu pricing and fixed pricing. It's a good stepping stone. If you are not fully prepared to jump into value pricing yet. If you're doing hourly pricing but it's not where you want to permanently live, eventually you'll want to move out of there still because you're always going to be leaving money on the table. What I see a lot on social media is people not understanding the difference of menu and fixed pricing compared to value pricing. How I define it is that fixed pricing is having a set price in exchange for a task. So reconciling a bank account is $100. You're no longer charging hourly for the time that it takes to do that bank reconciliation, but instead you're charging a flat rate for it. And then menu pricing is a little bit different because then this becomes a comb of a series of fixed prices. So you could have a fixed price of a bank reconciliation for a hundred dollars, a fixed price for a set of financial statements for $300, a fixed price for accounts receivable entries for $200. And you have like all these fixed prices on your menu. And then the customer says, comes and says, I would like to order a bank reconciliation and financial statements, but I'm not going to order the accounts receivable. So then you still end up with a flat rate price. It's just that they've been able to pick and choose the things that are included in that flat rate price. So that's kind of the difference between fixed and menu pricing. In a value pricing model, we start to then tap into the things that they want. So when we're talking about bank reconciliations, accounts payable, accounts receivable, so on and so forth, those are things that they need. That's the compliance type work that has to be done in value pricing. When we're starting to tap into the things they want. Now we're starting to tap into the things that they value. Imagine you're booking a vacation to Jamaica, right? You want to go on a trip to Jamaica, but you would value staying at a five star resort instead of a three star resort. You would value having a limo pick you up at the airport instead of taking a shuttle bus. So these are little nuances of tapping into what a client values beyond doing just the compliance stuff that needs to be done anyway. The other thing that you'll hear a lot about is tapping into the pain that they are feeling. Especially about some of the things that are maybe compliance related that they don't understand or, or they just never have time to get to or mistakes and errors that are causing them problems. So when we can offer to take away their pain, that is something that they are going to value. Remember always to price each customer individually. So this is another recommendation of why you don't want to have a fixed price for the services that you provide. Every customer is different. Every customer is going to value different things. Take two customers that go in to McDonald's that are ordering a Big Mac combo, one of them wants extra cheese and they value having a super cheesy burger, they're going to pay extra for that. So every customer is different and you have to price every customer different because not all of them are going going to value the same things. In our world like outside of the McDonald's world. In our world that could mean things like having faster response times, having support options available, having their work completed earlier in the month. Like one of my upsells is, if they have all of their documents uploaded to me by the 5th of the month, then I will have their work completed by the 15th of the month. But they have to pay extra for that. If they value that, that they get their completed work in the middle of the month rather than the end of the month, they're going to pay for it because another client that might not be important to them, they might not care how quickly I do their work. So I want to be able to tap in to and, and find out what the things are that people value that they're willing to pay more for. And that's how I'm increasing those rates that I was showing you a couple slides ago. Remember that I, I talked about this already. Value pricing is not easy. It takes time, it takes tweaking, like a couple people said in the chat. And I'm, I'm constantly evolving. Every time I price a customer or lose a customer, do I have my hand raised for some reason? Every time I do that, I typically discover something where I go back and I change something in my model, change the way a question is worded, maybe add another question, which also we'll talk about service agreements later in the year and how you can do your proposals in the software as well. But usually every time I've learned a lesson from a client, be it good or bad, because there are obviously both, it typically Changes my model and my service agreement so I can easily go into the software and make those changes. So those numbers that I was showing you, that first quote that I did, that earned me almost 14,000 extra. And, you know, let's say it took me eight hours of work to set up my first model. That's like eighteen hundred dollars an hour that it took me to set up that model. I'm. I'm more than willing to do that over and over and over again. So, in a nutshell, the concept of optimal pricing is finding out how to determine what is the highest price that a client is willing to pay. It's not easy. We can't just obviously ask them, hey, what's your maximum price? It's like when you're buying something or selling something on Facebook marketplace, and somebody messages you and says, what's the lowest price that you'll sell this for? I'm never going to tell them, you know, I'm going to say, well, what are you offering? Right? It's the same thing when we're asking them what's the maximum price that they're willing to pay, even if they said something. If I ask a client, what's your budget? What's the maximum price you're going to pay? Which I don't ask this, but let's say I was, and they come back and they say $5,000 a year. I have a really, really high closure rate, which I completely contribute to Mark and teaching me how to build. And I promise you, if somebody has ever come to me and said I have a budget of $5,000 a year, I promise you I have more than likely doubled that by the time they agree to the price that I reveal at the end of my sales process. Just because I do such a great job at building the value. So I have a process that I use. This is my sales process. I do this before I even show the customer the effective pricing software. So first, I start with an ideal client and niche, and that can be whatever it means to you. It can mean an industry. It can mean the type of business. Maybe you like, sole props or charities. For me, part of my. I do have some. Some industries that I deal with, but more than one. For people that know me, you'll know I used to have all my eggs in one basket servicing travel agents. And then Covid came, and over 90% of my clients went out of business. So I've learned to not put all my eggs in one basket. I do have a couple of different industry niches now, but what does remain the same about my ideal client is like I was mentioning, I like a client that lets my firm do a hundred percent of the work. And if they do want to do some of the work themselves, hey, I'm good with that. But you know what? I'm going to sell you my training package because I'm going to train you how I want the work done. But I'm going to make it sound in a way that it's advantageous to them, that it's saving them time and making me more efficient if they're doing things correctly from the beginning. So they're going to pay me to teach them how to do things the way that I want them to do it. Are you noticing I'm a bit of a control freak? The next thing I do, I have a 15 minute video meeting. It's a very quick qualifier type of meeting. I do have a little bit of preliminary qualification that I do from that. Some people automate this with a form on their website. I'm rebuilding my website. It's been a pretty slow process that I've been working on for a while because I've been the bottleneck in my business to approve things when the designer does them. But it's in progress and then I will be automating a lot more of my pre qualification. I mentioned already that I always do a diagnostic review and if you're wondering, yes, I charge for it. I charge minimum $500 and the most that I've charged was $1500. And and I, I decide on the spot during that 15 minute meeting of how much I'm going to charge for that diagnostic review because it depends on how complex the file is going to be. Are they registered for sales tax? Do they have payroll? Do they have inventory? It depends on how many things I'm going to need to review. Then I have my fact find meeting. This is another meeting, a video meeting with the client. I tell them to allow about 60 to 90 minutes for this. I have a list of some of my favorite questions that I ask here. But my intention of this meeting is really to get them talking and then just listen and look at their body language and learn, you know, hear the tone of their voice, hear when they get stressed because they might not tell you this stresses me out but you'll be able to hear it in their voice. So there's a lot of non communicative things that you can watch for in that meeting. That's why I love video meetings so much. And so in that that's where I'M finding out their pain points. That's where I'm finding out what they value, what types of things they look for. Then I have a brochure review meeting. I'm just going to show the couple last things here and my effective pricing meeting. So step five and six, I sometimes combine. It depends on what's really happened during the fact find meeting. If the fact find meeting, if I've gotten like a lot of information from there, I might pre send them the brochure review and then just quickly review it at the beginning of my effective pricing meeting. Or if I haven't, if I want some more information that I didn't get from the fact find meeting, then I will book a separate meeting for that. Okay, so I'm going to move over into the software. So if you are logging in for the first time, what you will see is going to look a little different. Let me just see. I think I have it in a PDF here. Let me quickly show you the, the handouts that you're going to get today. So you're going to get this getting started checklist. This is all about how to register for the software. I think everybody here is probably registered already. And then there will be an onboarding checklist of things that we're going to be talking about today. But when you're logging in to the software for the first time, you're going to see a checklist window actually pop up. And as you complete each of the things in there, it will, it will check it off for you. And when you've completed the list that no longer pops up, which is why it isn't popping up in my, in my version because we've already gone through everything. So let me. Okay, so you'll see in here each page is kind of separate things. We're going to be talking about each one. So I won't spend too much time showing you the handout. This is the screenshot that you will see when you're logging in for the first time. So it'll say customize the software and there will be a configure button. And when you do that, this will then be completed and you will have completed one of five add your company settings, create your first pricing model, do a quote, and create your first pricing success metric. So obviously not everything is going to be done right away, but this will continue to pop up when you log in. Until it's done, you can bypass it. So if you're not finished, you can still bypass it and go into to the program. So here we are now in effective pricing. First thing I want to show you because I want to get rid of them so they're not on my screen is this notifications window. But it will tell you when there is one of these sessions coming up, which is what these two messages are about. It will tell you if there's been updates to the program and it will say what those updates are. You have. And if you have, once you've read something, it goes into the red section and then you have your archived section. So messages don't ever actually disappear. So let's say there was an update, there would be a message here and when you go in to read it, it would tell you what the updates are and give you some information about them. So I'm just going to get rid of both those and you'll see now I have no more new notifications. So this first screen is. I'm going to take a bit of a tour around the window. Up here we have our, I call it a hamburger button. This is just going to expand or minimize the menu on the left hand side. This menu, as you can see, will have a home button which takes you back to the home screen. It has a dashboard button which. This is where you can see your pricing success metrics. Now remember, this is a demo model of the software, but you can see where I got my quote from earlier of the percentage increase that I've been getting since I started using the software. This is the price success metric where it tells you every time you do a quote. It gives you the option at the end when you're finalizing the quote if you would like to enter what you would have previously charged for a quote, like that. And then it generates this metric for you and it tells you, it keeps track of your percentage increase of how much more you are charging from what you previously would have charged. And then it tells you if you have any quotes in draft mode, so on and so forth. And you can quickly click to go to any of those. There are some quote information at the bottom. So that's your dashboard. And then also these two icons are for actual pricing models and they will only show up in this menu once you have made the model active. And we'll talk about that some more when we start looking at models. Then you'll have your company logo and this is all customizable, the colors, the logo that you put in, everything. I'm going to show you that in just a moment where you can change all of that. Over here is where we sign out. I showed you the notifications. This gear icon is your settings window and you're going to use that a lot. Okay so in the my profile section this is where you can upload your photos. So in my non test version of the software, which you will see later this year, I'm going to show you some stuff. In my actual version I have a photo uploaded here. Here's when you can change your password if you want to Important note down here about the the file type and the size of your file. I find a lot of times people have problems uploading their file type here and it's because of the size it can't be more than 500kb and and then there's a recommendation here and you can contact support right at the link if you need help. There's also a chat button down here that will send a message. You can see Sarah's lovely picture will send a message to Sarah. And there's also a help section that you can refer to as well. Then you have payment details and invoices. So this is for what you are paying for the software. So this is a test version. I'm not paying anything for it. Academy members, the software is included in your membership in the academy, so you wouldn't be paying anything for the software either. But if you're a direct purchaser and you want to be able to go in and download your receipts, this is where you would find them. If you want to update your payment details, change your credit card number or anything, this is where you would do that as well. It's way down at the bottom underneath the list of payment invoices. If you have a team that is responsible for pricing for your clients, you can give them access to the software as well. And they would be listed in the my team section here. Again it depends on what plan you have of how many people you can add. But you would just add a user, assign a role and, and then they would be in here your company details. So this is related to your company and this is where you would add. If you charge sales tax and what your default tax rate is, you can, if you don't want to do the pricing success metrics, you can turn them off. And right here when I mentioned earlier about if you're on, if you're seeing stuff that I'm demonstrating that is not in your version and you want to change your plan and I said you could do that by reaching out to Sarah or you could change it yourself in the software, this is where you can do that. So you would just Click on Change Plan and here are your options. It tells you how many users you can have, how many models you can have, how many clients you can have, and the price if you want to pay annually. And you obviously just click that button and then it's saying downgrade for me because I already have the Pro version. And if you wanted to cancel your account, I hope nobody ever wants to do that. It's a great program. You can do that in here as well. Okay, keywords are in here. I'm not going to talk about those today. We're going to have a whole section about keywords later in the program. And same with the integrations. You can integrate QuickBooks and Xero with effective pricing. But we're going to have a whole separate conversation about that later today. We're just talking about the foundations to get you started. Okay, so back into the gear icon. So in the theme and design section, there's a lot of things that you can do in here. First, obviously is if you want to change your logo again. There's instructions about the file type and the file size. And then you can upload that. There's this localization box where you can change your time zone, you can change your date format, and then it shows you an example of what it would look like. So if I wanted to change this to say January instead of 01, I can change it like that. And then the currency symbol that you want to display, so for me here it's the dollar sign. So you can change that symbol and just put in whatever you'd like to do in the number formatting section. At the top here is a separator. So you can choose the type of separator that you want to use and the type of decim point. So here in Canada, with large numbers, aside from our two decimal point spot for large numbers, every three numbers we typically will put a comma sign in. If I don't want to use that comma sign and I want to use. I don't know, I just want to show you. As in this isn't what I would actually use, but I just want to show you, you can see in the preview of how it looks to whatever you change it to. In the client search field, you have three options. Drop down, list, search, window, or both. We are going to talk about this a little more in another session when we've got a few clients set up in here and I will come back and show you this again. So I'm going to skip that part a little bit for now and Then over here and here in the color section, there's a lot of things that we can change. So over on this left hand side is our example screen. So if you see the base color over here is marked orange. Is it orange or yellow? If I wanted to change that. If you have actual hex code numbers for your company, you can put in the actual hex code or you can use a bar. If I wanted to say, okay, you can see that that has changed this bar and if I clicked save, it's going to change it on my entire screen. Now if I also wanted to change my font color. So this is going to be for my font over here. Right now it's black. If I wanted to change it to blue, you can see that my client's name has changed to blue. So these are for our primary sections. Okay. We'll look at a few of these and then we have our primary button color. So I want that to match my line color. So I'm going to change that. And then my action button color, which is this one here, I will change that as well. This is coming up a lot more pink. So my, my colors for my company is. Does have red in it. And this is not. You'll see my colors when I go into my version. So this is where you can play around with that stuff. Then we have our top header. If I wanted to change the background color to say like a light gray, I can do that. So if I save this, if I say okay and then save this is going to change the background color in my top bar. And you can see all of my primary button colors have changed to this horrible pink. I'm going to change that back when today's class is finished. But if you scroll down in this section, there's a lot of things that you can change. Icon and text color. Let's change that to blue again. So that's going to change these ones over here now. So this one at the top was our primary. These ones now is our icon and text color. Then we have our side menu. I'll change my background color there to gray, changes it in my preview window. And then the rest of the section is, is our table. So we have a tick color, cross color, odd row color and even row color. I'm just going to quickly change some of these so you can see what it is that it's changing. But again I recommend that you go in and play with this on your own. So that has changed my odd row colors. If I want to change my even row colors now Gosh, this is starting to look like a children's coloring book. And then now you can see I can't see this tick color because I made the background the same color. Let's make it black. Now my tick colors are black. My cross colors that are red. Let's change those to just something that'll show up blue. So now those are blue. So the other things I will go back and change afterwards. So that is all in your theme and design section. Just going to go back to the home screen for a minute. I just have a couple more things I want to show you. So one of the other things that I wanted to show you is about the progress tracking badges. So when I was scrolling through the notifications, there was one in there about how I had leveled up. So as you're using the software behind the scenes, you're going to be earning points along the way. When you complete various tasks, those points will then turn into badges at different levels. And once you complete the onboarding, you will be able to view these on your dashboard. And everyone starts with the apprentice level badge. If you're thinking, how do I earn points? I don't know. It's. It's a secret within the Mark Wickersham company. I know what some of them are, which I'm happy to share with you. When you create a new pricing model and you make it go live, you will get points for that. Every time you complete a quote, you will get points each completed proposal. Every time you get great results with the pricing success metric. And also I didn't show this, but I will show it when we start doing a quote. When you complete the pricing success metric and you get a great result, it will ask you, and this is optional, it will ask you if you would like to submit your success story. It doesn't get published anywhere. It goes to Mark and the team. But when you submit that story, there is an option that says, says, is Mark allowed to use that success story in future material? And if you've been to any of Mark's sessions, you'll see sometimes he'll post snippets on the screen of various success stories that people have had and that's where these are coming from and sometimes from his messaging groups and stuff. But this is one of the places that it may come from. So every time you submit a success story, you will get points as well. Sometimes I will get a message that says, I've earned the next level badge. I don't know what the points level is for each badge. That's part of the secret. I just use the software because it's had phenomenal results. For me, the badges are just a little bonus. You know, when I talked about my firm winning awards and stuff, I like getting badges. Aside from that, I want to thank everybody for coming. I'm really excited that you're going to start using the software. I'm really looking forward to hearing some of your results and how you level up with it. Bye.