The Story in your Price: What To Charge Your Clients

In a world that headlines low cost options like Amazon and Walmart, it’s easy to think there’s only one option for your own product price: low.

That’s a dangerous precedent to set, though. Your price tells a story, and setting it wrong can lead to a mismatch in what you want to do and the clients you get in the door. It’s like walking into a theater expecting an action flick and getting a documentary about the irrigation system of the Austro-Hungarian Empire.

My Own Price Journey

I grew up being very price conscious. Which can be good for budgeting, but can lead to other problems.

For example, as a budding young CPA, I dreaded discussing money, especially when it was a lot of money. Taxes, client billing, anything about paying money. I delayed those conversations as long as possible

One conversation particularly sticks out in my mind that helped me change my viewpoint. I had to call a client to tell him he needed to pay an extra $100,000 in estimated taxes. I can’t tell you how fast my heart was racing as I dialed him up on the phone, hands shaking as I pressed the buttons and held the receiver up to my ear.

His response? “Oh, that’s less than I thought it would be.”

Turns out, it’s all about expectations.

Price Signals

My family had a few rough years when I was young, so there’s always a small voice in the back of my head screaming “cheaper is better.”

But that low price screams something else, too. Low price says low quality. You get what you pay for. Think Motel 6, which are fine enough for a place to crash, but don’t expect shampoo in your shower.

Is that what you want for your product? Well, it depends on your client. If you’re aiming for a cost conscious client, then low price makes sense. But it also means that your product needs to reflect the hourly rate you’re charging.

Obviously, lots of people will want Rolex quality for Timex price. And something like that is a great marketing slogan. But if you actually try to do that, you’ll end up working long hours for little pay.

On the flip side, some people only want the most expensive product. But the quality expectations there are extremely high, and I’m sure the marketing for that kind of client is going to be very different than anything I’m covering.

Finding Something That’s “Fair”

You’ll want to set a price that will actually make you money without being overworked. The marketing around that price should be about the value they’re getting for that amount.

While I prefer to give Indiepreneur examples, I’m going to lean on my real world CPA selling experience on this one. Many of our clients had grown from “just starting out” to “doing pretty well.” At that first phase, they usually went to Sole Practitioner CPAs. Those CPAs would charge $500 – $1000 for a tax return. We would charge $3,000 – $5,000. How on earth could be compete?

It wasn’t that hard. For a few thousand extra, you got not one CPA, but a whole team. You had 50+ years of experience looking at your return and financial statements. Complex questions could be run by an international team with experience in every industry. Yes, you’re paying more, but we’ll help you year round, rather than just the month before the filing date looking back on what you did last year.

For your own CPA, would you rather have a person who puts numbers in boxes, or one who can help your company grow?

Some people are happy with the cheap, number in boxes CPA. And you know what? We didn’t want them as clients! Our prices were deliberately set to keep those kinds of clients away, giving us more time to spend on the ones who were willing to pay our fees.

When you’re setting your prices, what kind of person do you want as a client? What kind of person do you want to push away?

You want each of your clients to walk away happy with the service they receive for the price they paid. It’s all about setting expectations at the start.

Don’t get caught up in the race for the lowest price. Only one person can be the cheapest, and if it’s you, you’ll most likely be miserable.

NOTE: Unfortunately, even if you do everything right, you’re not going to make everyone happy. Something I’ve written about before.