Pricing your advisory services
There comes a time when hourly billing won’t do your services justice. It can be unfair for clients to charge by the hour when you’ve automated processes, and you may find it reduces efficiency. Changing the way you work means changing everything – pricing cannot be left out.
When your client knows you’re on the clock they’re unlikely to want to get in touch. If they have a question only you can answer, they might shy away from giving you a call as they don’t want to incur a cost. This defeats the object of advisory, as you’re meant to be positioning yourself as their trusted go-to person.
Being paid by the hour can also create a slight air of distrust. When you’re paying for a service like a lawyer and they know the longer the case goes on for, the more they’ll be paid, what is their incentive to finish? Hourly billing can reward poor work and encourage people to drag their feet.
Restructuring your pricing
One idea is to set your client up with a three to six-month contract with your firm. If they pay a flat rate monthly, then you can price out one-off services accordingly. These might include building a forecast, budgets, credit control policies, pricing reviews or raising finance.
You want your clients to stop seeing you as an expense. Any business owner is going to try and reduce costs, so will likely only be coming to you for the bare minimum – compliance. A massive blocker for advisory, you need to make your services affordable but also not undersell yourself. Being able to add your fees to their forecast will help them to not overspend and your fees will become an expectation rather than a shock at the end of a meeting.
For more information on pricing, including suggested costs for monthly or quarterly reviews, sign up for our very own CPD-accredited Futrli Advisory Certification. It’s split into four levels (foundation, practice, forecasting and reporting) and will help you and your team transition into the advisory space successfully.
- Internal pricing review. Work out how an adjustment would impact your staff and revenue.
- Set a cost for one-off and recurring services. These might need adjusting in time but even getting a placeholder sorted will help you start thinking about the new structure.
- Sort your clients into compliance and advisory groups. You’ll be able to see what sort of price brackets to look to. You’re in a unique position to charge what you know clients can afford.
- Alert clients to the change with plenty of time. Nobody wants a surprise bill landing on their desk!
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