Value Pricing.
Some bookkeepers love it while others don't.
There's no question it can be complicated to implement because setting rates for bookkeeping services is very subjective due to the varying needs of different clients.
Our guest today, Mark Wickersham, who is a chartered accountant, author and public speaker, will give you clarity on how you can profitably use Value Pricing in your business.
During this informative interview, you'll discover...
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Why it's important to ask commitment questions to prospects
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Why you need to build up the value of what you do first before revealing your price
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Why the first price you present to a client should be the most expensive
If you'd like to find out more about Mark, visit this link.
You can also contact him on LinkedIn here.
EPISODE TRANSCRIPTION
Michael Palmer: 00:53 Welcome back to the successful bookkeeper podcast. I'm your host, Michael Palmer and today is going to be an amazing episode. Our guest is a sought after profit improvement expert. I'm going to read that one again cause that is an exciting profit improvement expert who wouldn't want to have their profit improve. Everyone talks about home improvement. We're talking about profit improvement today. He's from the United Kingdom. He is a chartered accountant, he's a public speaker and he's a number one bestselling author of a number of books. Effective pricing for accountants, a practical approach to value pricing, how to build a successful bookkeeping business. He is famous for helping bookkeeping and accounting firms double their profits in less than 18 months without having to work harder or do any uncomfortable marketing. Welcome to the show Mark Wickersham.
Mark Wickersham: 01:44 Thank you so much. That was an awesome introduction, Michael. I really appreciate it. Yeah, it's great to have.
MP: 01:49 I've heard lots about you but we've never met. So this is going to be a treat for me as well. And I know for our listeners as well. Fantastic is stuff. So let's start off, tell us a little bit about yourself and how you ended up doing what you're doing today.
MW: 02:05 Yes. Uh, well I've been, I started in the profession a long time ago now. It was 1988. So, I'm yes, I'm that old. Uh, and I, I trained as a chartered accountant in the UK qualified. Uh, and then a few years later, kind of disillusioned with being an employee, set up my own accounting firm, starting from scratch with no clients, working from a bedroom in my house on built up this practice and it, between 1996 and 1999, it looked like I was very successful from the outside looking in because I grew very quickly in two and a half years, I, uh, I grew with over 200 clients, a 200,000 pounds in fees, which I guess about 400 Canadian dollars. Uh, I had 13 team members at one point and it looked really, really good. The reality was it was a mess, a complete mess because I made so many mistakes.
MW: 02:58 And mistakes that actually most accounting professionals book keeps us be to do the same thing. I was growing too quick. I was way too cheap. Yes, I was winning lots of clients and I thought I was a genius at selling. No, it wasn't. I was a genius giving stuff away for free. And so life became increasingly tough. And then I was very fortunate. I met a number of people that helped me on my life journey. So my heroes, one of which is Ron Baker, who I know you've had beef on the show before, and Ron is one of my big heroes in the profession. That's when I first came across his, his first book. And that changed everything for me. And as I read it, kind of this light bulb went on in my head and I figured out a better way to price as I coached a system, a systematic approach that would allow me to get rid of timesheets and price in a consistent way using a system to price with confidence.
MW: 03:51 And my results changed so quickly that within a few short years I then sold my accounting firm in a management buyout. I got involved in a network of Accountants in the U K and I've been teaching accountants in the UK since the year 2000 so 17 years now. I've been teaching value pricing, teaching my process, and in the last few years, increasingly I've been teaching accountants and bookkeepers over in the US and Canada as well, which has been great fun too. And so that's now all I do. I teach accountants, bookkeepers, pricing. I teach my system, I write books, I do Webinars, I do mentoring sessions and I do speaking sessions and I love it. And I particularly love working with bookkeepers over on your side of the ocean because I find in Canada I was up there for, for thrive last November. And the enthusiasm now is just incredible. I absolutely love it.
MP: 04:46 Yeah, thank you. Well, we certainly get excited about making more money. So it's a, it's great and I'm sure you'll be doing a lot more work over here, so hope you like, hopefully, you like traveling.
MW: 05:00 I do love, I love the states and I love Canada. I love, I love everything about North America. So, um, and I'm going to be there four times later this year. So really, really looking forward to those trips.
MP: 05:11 Excellent. You know, as I mentioned earlier in the show, heard lots about you, I've actually looked at your website and just a couple of the demos around the pricing tool that you've created and I've heard people talking about how it works and how valuable it is. Let's, let's get into talking a little bit about how you do actually do this work by helping bookkeepers and accountants primarily. But our show obviously is more slanted towards helping bookkeepers work within value pricing and fixed pricing and the tools that you use.
MW: 05:45 Yeah. Well, the way I help people is, it kind of has two weeks expand into two ways. I developed my cloud pricing tool as you said, which was, which was actually that piece of software started life off back in 1999 that was kind of for me, the light bulb moment when I understood the process of value pricing. And I created my first piece of software for pricing in my own accounting firm back in 99. So really cloud pricing is the latest evolution is if you like, is 18 years old. Uh, that the concept and, and, but it's only in the last 12 months I've been taking it out to Canada and the US and made it kind of a global product. It's a tool that certainly gets some incredible results. And, and I was just before Christmas, I had my UK bookkeeper sent me a message to say how he'd used it to increase his price by seven times, not just 10, 20%, but seven times, which is so far, um, the biggest result I've heard.
MW: 06:41 So I help people through that software tool, but I think actually more important in that, uh, I teach p I, I work closely with, uh, bookkeepers and accountants online. I teach, I haven't those mentoring groups and I teach the concepts because the software is great, but you have to understand value pricing first. And the trouble is value pricing is not easy. It's in face insanely difficult. It's inherently difficult. And so we have to understand the foundations first, which is why I spend most of my time teaching in groups, accountants, and bookkeepers to help them understand some of the foundations and some of the processes that we have to go through to communicate value. Uh, and so on.
MP: 07:29 Absolutely. It is a theme of paying such a difficult conversation and, and we get the question all the time, you know, fixed pricing value pricing per hour pricing and it, and it's, you know, it's debated all the time and uh, in fact, I'm just going to pull up a question, uh, that came up recently and in our Facebook group. So we have this great Facebook group. Hopefully, it'll join it and help answer questions inside of that group as well at The Successful Bookkeeper on Facebook. And one of the questions that came up, it was the help I really need to change my billing to value-based rather than hourly. As I continue to educate myself, I realized that I'm not billing what I'm worth. And so many clients seem to get sticker shock when given an hourly rate. Is there anyone that would be willing to help me build my packages? I will pay for your time. Of course, I know there's a lot of information out there, but to be honest, I really don't have the time to research it and would rather pay someone who has the knowledge to help me. So you know, this is almost want to say that that is a very common thing that I hear along the, uh, the journey.
MW: 08:40 Yeah, I do. I get the same thing myself and I, I, and I think that, no, I don't think, I know from my benchmarking studies that almost every accounting professional, every bookkeeper is way too cheap and we need to put our prices up, but we have to do it in the right way because we have to communicate value. So the problem with value pricing is first, it's so misunderstood. There are, I found actually a lot of people teaching it and teaching it wrong and, and, and a lot of misconceptions. For example, the single biggest misconception I come across in the profession over the last period, the last five to 10 years, is in the UK, particularly a lot of firms are moving to fixed pricing and they think that fixed pricing is value pricing. And it's not a, usually, people that are fixed pricing, uh, have got a single price, a single fixed price.
MW: 09:29 And if you have a single fixed price for anything, then categorically is not value pricing with a few possible exceptions. Uh, and also I can guarantee with a single fixed price is always the wrong price. So if you have a client come to you to say, I want you to do the bookkeeping, and they say, Yep, I can do that, and it'll be $200 a month, that's the wrong price because how can that possibly be related to the value of every client gets the same hourly rate, for example. And the other point is when you reveal a price, a fixed price, so let's say $200 a month, the probability of that number is exactly the number, the other person that the potential client is able and willing to spend is so unlikely. It's almost zero. Yes, they'll have a number in their mind they'll, but they'll have a number in mind never pair to pay.
MW: 10:19 It won't be the 200 it'd like to be a high number or lower number. If it's a lower number, they'll say that's a bit expensive and they'll go somewhere else. So the bookkeeper loses out. They don't make the sale. If it's a higher number, great, you make the sale, but that person would've paid more money and you've left money on the table, you threw profits away, which is almost a worse outcome. So one of the things that makes value pricing so hard is the fact that the first value is subjective. Secondly, it differs from every person, person to person. Everybody will value things differently. And thirdly, just make it even more difficult for the bookkeeping industry is the fact that bookkeeping itself is complex. The scope of the work differs so much from one client to another. You have clients with good record-keeping clients with bad record-keeping clients with a lot of transactions versus smaller clients and that all makes it hard to work out what to price.
MW: 11:12 And that's why I think historically we just go back to the timesheet cause it's easy but that's a crazy way of pricing. So what we need is it needed a system when you have a system for value pricing and the first thing we have to recognize, which is I teach a seven-step formula. I teach a systematic way of thinking about it. And the first thing that we have to think about which really strikes the heart of value pricing is we have to recognize that different customers value things differently. And so we have to come up with a price discrimination strategy. We have to come with a price discrimination strategy and that's the starting point of our pricing. We have to figure out how we're going to charge different customers, different prices. And the bad news is there are actually dozens of different techniques and ways of doing that.
MW: 11:58 All of them very powerful and so on. And we've got to pick out what's the best ones that work for us. And there's really, I think three or four in particular that works well for the accounting profession. And I call these options bundles, upsell. And also we can use something which is, uh, based on time, uh, which I've actually won't go into now, but we can use a number of different techniques. And what, why our goal is, is when we're having a conversation with a client about what we do, bookkeeping, for example, our goal has got to be to come up with a price that at the top end that that particular client's able and willing to spend. And so we need to have a system for doing that. And what we can do is we can't ask the question, we can't say, tell me what's the most you're willing to spend on bookkeeping work because they won't answer that question.
MW: 12:50 Or if they do give a number, they're lying. Okay. So he can't ask. But we've got to have a system, a way of asking the right questions and having a structure so that we can obtain that information because some clients will pay much, much more than they're currently paying. I said the example of the guy who said he got a client to pay seven times what he would've charged before. You only need two or three clients like that and suddenly you could start turning away work and being more confident. The trouble is we don't know how to do that. So we ended up trying to be competitive and cheat with all clients to win the business. And yet the amount of money we're leaving on the table is incredible.
MP: 13:32 I liked how you were saying the, what was a couple of things that you said that I really liked, but you know, the price discrimination, very interesting concept as well as, you know, asking, you know, what do you have in mind to pay the, to pay the bookkeeper. It's like, it's almost kind of like a chess game, uh, that people play in it. It's not just in bookkeeping. I mean, every industry is like, Hey, what's your budget? You know, it's like, you know what a crazy question. You know, while it's, you know, whatever they say, it's either gonna be, you know, do you even know if that's real or, or not? And they're always gonna come in at low. Like, what's my budget? The lowest possible amount, you know? So I like where you're going with this mark. Go. Absolutely. I mean, it is a crazy question and well, one of the reasons it's crazy is because it creates what's called Manka because the reference price, so when you ask somebody the budget, they'll give you a number and that immediately is going to constrain your thinking on what you'll come up with as a price.
MP: 14:26 And it also reinforced in their mind that same anchor so that you now, if you were to go in with a higher price, they're now thinking of the number they've given you the budget. Whereas before you asked the question, they'd perhaps never even gave it any thought. So you must never ask that question. You always have to go first with the pricing. The person that goes first is the same with any form of negotiation. The person that goes first, a that's always a close approximation to what the eventual is. And so we have to be confident with our pricing. We have to have a system, we have to be able to reveal the price without asking that budget question.
MW: 15:00 Yeah. And I think when you do this, people want certainty. And so, uh, when you do this, when you have a system and when you are trained on it well enough that you're confident with it, that provides certainty for people. So even though it might come across as being more than the competitor, they choose that person because they're bringing certainty. It's like, well, it's high. But they were just so confident with what they said and the way that they approach themselves that their unconscious mind is just more willing to go with something that's more certain than the uncertainty of, well, I'm getting a better deal. What? Am I going to get? What I ultimately need or want?
MP: 15:34 Exactly. Yes.
MP: 15:36 Let's dig further into this. And, uh, I, what I really appreciate about you, Mark is, is not just theory, but it's actually already you're giving us, uh, the listeners real tangible things that we can start to apply. And I'm sure people are going to be writing your name in Google to find out more and go to your youtube and you've got lots of great resources online to learn more. But let's, let's give a few more pieces of a resource that will help them go down this journey.
MW: 16:04 Yeah, sure. Let's think about this step one of the formula, the price discrimination, and let me talk about concepts which I call options versus bundles versus the upsell, which are all three ways of, of, of price discrimination probably. I think for our profession, the most powerful form of price discrimination, or at least the simplest but also very powerful, is something called menu pricing. I know you're familiar with, because I teach, I've been teaching this for 17 years and I know Ron talked about it as well on his podcast with you. And that's that you have to give people choices. And specifically three, he called it the goldilocks effect, which I know that's a popular name. I call it the magic of three. You have to get your three choices and they then pick the one that they want. And when you do that and when you do it well, what happens is most people choose the middle option and so straight away, the reason why I think that giving three choices is the starting point on your value pricing journey is that it's easy to implement.
MW: 17:02 And it's also though, if you're nervous about putting your price up to and most people are as a lack of confidence, what happens if the client leaves? Well, what you do as you go to your clients, who you charged a price for last year and this time you come to come up with three options. The cheapest option, your bronze option, if you like. You priced that, that being an amount a little bit higher. I would suggest two or 3%, uh, higher than what you charge last year for essentially the same thing, but perhaps stripping out on the bells and whistles. But then the middle option, you might charge you, let's say 20% higher and you add into their some ways of adding value. And very often we can add so much more value, uh, with things that are low cost to us, like reports and so on.
MW: 17:47 And then we have a higher expensive option, uh, that will would even higher still. And what happens, and people have said when we do this in the right way, very often, many of our existing customers who we always thought of as being price-sensitive, when you give them those three choices, quite a few decide to go for the middle one and therefore they choose to pay you 20% more in price and they pay last year for the extra things that you've built in much of which don't actually take you any further, any more time or things like reports. And so just using that one strategy alone, I know of a firm in the UK that has said that they've increased their average price across their whole firm by 20% just by giving three choices and a, if you factor in then fixed costs. And so on. The impact on bottom-line profit can be a case of doubling profits.
MW: 18:38 So that's the, that's the first strategy that we can do at a starting point. Give three choices. But also what we have to do when we start getting more sophisticated is recognizing that the, we should also think about options and upsells, which are also forms of price discrimination. So giving people three choices of bronze, silver, gold is a nice, simple way to start. And it also means that we can build standardized packages. However, because there's so much complexity in the profession in which every client is different and what has different needs, what we should also consider is giving them options right upfront. In other words, Aston, if they want certain things, yes or no, which allows them to tailor the package to exactly what they want. But it also means that you can get a better price. And so I often have people say to me, okay, mark, if I can't, with a feature for adding value, let's, let's say as part of my bookkeeping, uh, I could, I could give the client every month a valuable management report showing the monthly analysis of, of profit and expenses and, and sales every single month.
MW: 19:46 Uh, and the question would be, uh, how should I treat that? And, and one option could be, and there's no right or wrong here, but you could say, okay, that valuable management report, I'm gonna make that part of my premium bookkeeping package. And that will be a great thing to do. But instead, what you could do is you could say to the client right upfront before you reveal the price, you could say, would you like us to produce a detailed manager report that shows your profit loss every single month, yes or no? And most people would say yes to that. And what you then do is the yes answer triggers behind the scenes, an increase in the price. So you factor it into the price. Um, of all of your three bundles with your bronze, silver, gold. So in other words, you, you're not making this a standard package.
MW: 20:32 You're asking the question, do you want this? Yes or no? And there are lots of things we could ask that sort of question we could ask, do you want to speedy fast turnaround service? Yes or no? Do you want your primary point of contact to be me or are you happy to be able to deal with my assistant? In other words, do you value dealing with the senior partner, the owner of the business, yes or no? And these are what I call options. And this is why they're so powerful. When you give people options, you say, would you like this? Would you like this? Would you like this? Usually, they say yes because people say, yeah, I want that. Stick that in the shopping basket, stick that in the shopping basket. They say yes to these things. What happens is behind the scenes, your calculation, your price is going up, up, up, up, and you'll go, which I know for bookkeepers, this is to say gonna sound scary, but you want to make sure your pricing system, whether it's a tool like cloud pricing or an excel based spreadsheet, when you reveal the price, your goal has got to be to make sure that first price you reveal is too expensive, which I know is going to sound scary for people.
MW: 21:34 But the point is if when you reveal your price if a customer says yes straight away, you know for absolute certainty you've left money on the table. So you've got to change your mindset. Your goal is to get people to say that's a bit expensive because then you know that you found a number that higher than the maximum they're willing to pay. And then when you have a system where there's an excel spreadsheet or a cloud-based software tool when that number is too high, you go back and say to the client, well, let's look at the reason why it's that price. You said to me that you would you really value dealing with me is the main point of contact and not Mary, my assistant on reflection. How important is that? Because if you deal with Mary, you can get a cheaper price.
MW: 22:19 Hmm. Let me think about that. I suppose really I could, I'd be happy working with Mary and so the client at that point then chooses and they say to they now reveal which of the things they've said yes to. They really do value and which things they on reflection, they don't value so much until you take those things one thing at a time out of the shopping basket and you recalculate the price and what happens is every subsequent price you reveal will always be a lower price. That first price creates an anchor. It creates a reference price by which they then judge everything else. Everything else in comparison is cheaper. Where's, how'd you revealed that cheaper price right upfront. That might've been too expensive and this is to do with the contrast principle that we always judge things by reference to what happened immediately before. If you have a system to reveal a high price where you know you have a system to then bring that back down with integrity, with transparency, then you will end up getting a much, much higher price.
MP: 23:14 It's wonderful.
MP: 23:22 There's a lot of psychological things that are happening in this whole process that you're, you're explaining, uh, and the one being comparisons, how people can compare things, but as well, when what I love is asking those questions is, is that they are literally
MP: 23:39 okay
MP: 23:39 commitment questions. It's like, do you want this? And when someone says yes, I want that, it's in psychologically.
MP: 23:46 They are, they're actually becoming more and more committed to you just in the questioning process.
MW: 24:00 Oh, they absolutely are. Yes. And, and that's one of the laws of influence is commitment and consistency, which Dr. Robert Cialdini talks about. And one of the techniques that are very powerful is you should always, you should always have a face to face conversation when you're having price conversations. You always, a fatal mistake is to put prices in a brochure, in a followup email on the website. You'd never do that. You've got to have a face to face conversation and the starting point is actually to build up the value first. So you would, you would build up the value of what you do, you'd present your three options, the three choices, and then only when the client fully understands the value, fully understands what's in it for them and what the options are.
MW: 24:32 Only then do you reveal the price. But a great technique is if you're revealing your bronze, silver, gold bookkeeping, and if you use the right language and the a and build your structures right before you reveal the price is always a great idea to ask the client this question say, so now we tell me out of the three options I've shared with you, which one do you think is the most appropriate for your business? And very often because they've not seen the price at this point in time, they will say the middle of the most expensive. And very often the mentioned the most expensive. If you've got loads of valuable stuff. So what happens is if she says, I think the premium one is the right one for my business, that's what I need. Then you reveal the price with your system. And if the price is too high, you might still have to change a few things about it.
MW: 25:22 But this law of commitment and consistency, we like to be seen to be committed and consistent in our actions. It means that we marry is more likely to perhaps change a little bit the premium price, but she'll want the premium budget. It's a premium package. She won't suddenly say, Oh, do you know what pre I'd love that premium package button. We'd go for the cheapest one because she's made a coach. She's made that commitment and you make it. I think there's a great point you said about psychology, Atty. The whole pricing is about price psychology. Price psychology is so misunderstood. And yet the reason it's so powerful is because, um, there's no such thing as the right price. The right price doesn't exist. And, and I, and this is a, this is a conversation I have with accountants and bookkeepers a lot because, because we're very analytical, we like precise numbers and this is why I think we like timesheets because we, it's a precise number even though it's a wrong numbers or precise number and, and the problem with pricing is there is no such thing as the right price.
MW: 26:15 There was no, there is no scientific scale like there is for example with weight or temperatures or colors to tell us what the right number is, is an arbitrary made-up number. We don't know the price of anything. And so given that it's a made-up number, when we, whenever we buy anything in life we make comparisons. And so our job as a business owner running our own business is to use the right language and the techniques to help the client see the comparison that with the value as being a great deal for them. Even our price might be three times more expensive in the bookkeeper down the road. We need to use techniques in our communication to make the value come alive. Build up the value and at the same time techniques to make the price seem much more than it really is.
MP: 27:07 Absolutely, and that's, I think why you alluded to this is not easy. It's a, is a lot to this because you know, if we're thinking about Domino's, right? You push one domino and all the dominoes start to fall down. Well, the pricing conversation that we're talking about right now, there's like 2030 dominos before this. That can be very powerful to make sure that they're all falling in the right direction and comparisons, like you're saying, if we think about bookkeeping, if you, if you walk into a business and they're comparing you with the bookkeeper down the street, you, you are in trouble because they're going to compare year, your price, whatever that price is. They're going to compare you to what's in the market, what they've known, their experiences, what other they're the people that their social influence has said about it. It's like that's what they're going to come up with. Oh yeah, I pay my bookkeeper $20 an hour. That's what you're competing against. So right away the game has to be a part of, I'm not like those other people. I'm different. I have more things to offer. I'm going to help you get to where you need to get to, which is, which is what I think you're saying, is that this is not one thing. Click a button and you know, here's your price. There is, it's all completely made up. It's completely invented and this is not traditional in this industry.
MW: 28:29 Absolutely. It's, I mean the worst thing we can do is quote an hourly rate because an hourly rate, $30 an hour or whatever it is, it doesn't convey any value because people don't buy an hour of time. They buy the end result, and so we have to get away from the hour. The Hour. People make comparisons. So if you quote an hourly rate, what comparison will they make? Well, they'll probably think about how much they pay their employees by the hour and in comparison, that's a big number. I, I, your price is going to be a big number. Even though it's a, even though I know that bookkeepers undercharge massively, that hourly rate will be seen as a big number because the client will make their own comparisons and they'll compare it with something that's less. And so we have to break that completely. We have to figure out how do we, how do we quantify the value? How do we communicate the value of what we do and then come up with a price that demonstrates the client, there's a profit on the deal that they're getting so much more back than the price that you're paying. And you can't do that with hourly rates.
MP: 29:31 Hmm. Now it's, we talk a lot about is confidence, having confidence in yourself and, and believing in what it is that you do and how you can help, uh, your customer. So can you talk a little bit about the work that you do and how do you bring people along to really get that, this, you know, seven times what you're charging that's going to be difficult for some people to actually even, you know, they might feel, uh, like they're taking them for a ride. They, you know, there are all sorts of these things that come up for people around their own psychology. How do you deal with that?
MW: 30:08 Oh, absolutely. Well, the first thing to, to, to make very clear is that value pricing is not, is not easy. It's but, but at the same time, the rewards when we get it right, are huge. I have seen firms that have literally doubled their profits inside a year on this journey, but for some people, they get it straight away within three or four months, that conference starts to flow. Some take 12 months before it starts to click. Everyone's different. But we've got to start that journey at some point and don't try to expense suddenly everything to change overnight. We just want to try and get some little wins to start with some quick wins, start getting some results. And what happens is as you get those results, the confidence grows. The bookkeeper that got seven times the price, he is not the norm. But on the other hand, I worked closely with a bookkeeper in the UK who actually co-wrote the book, how to build a successful bookkeeping business.
MW: 31:01 Her name's Jane Elwin and there's a 30-minute interview I did have a year ago on my youtube channel and she, I started teaching her two years ago and by her own admission for six months, you didn't do anything. She didn't have the confidence. She listened to me. She took us a note, she nodded along and so on, but then suddenly she took action. She took action in November 2015 and she's, she told me afterward how she had what she called her week of wow. Where she met with four clients. She followed my process to the letter and the, and this came about, she said she was driving to a client on Monday evening about six o'clock in the evening and she was thinking, why on earth am I doing this? Why am I going to the client's premises when I should be relaxing in the evening? Why am I living my life around clients that don't appreciate what I do?
MW: 31:50 And so on that journey, she decided she would just follow the process. I taught her at the end of that meeting, two hours later, the client agrees to a slightly more than doubling of the price for essentially the same service because you'd found a way of communicating value and she was so inspired by that. You had three more meetings in that same week with existing clients. She did the same thing and in all three of the other cases, she will turn them. She doubled the price and the other ones you've got four times the price. She said in that one week she increased the turnover of a bookkeeping business, which is an established business with five employees by 12% 12 that increase in the top line in one week from just repricing for existing clients and she's now gone into some amazing successes. Uh, but it's a journey all starts somewhere.
MW: 32:37 We have to start somewhere and just keep learning. I'm still looking. I'm 17 years I've been teaching this. I'm still learning stuff now then that's because value pricing is an emerging topic. It wasn't until about the 1970s that a few university professors started to teach it in the last 20 years. We've seen a huge growth in behavioral economics, a huge growth in price psychology and we are still at the very early days of actually learning a, that's just the psychology of price and so on. So we just got to look at it as an ongoing journey that we're not going to master it in a few months. We're not going to master it in a few years, probably not even a decade or two. Um, we've just got to keep chipping away at it. And what I'm finding is that firms just keep trying doing the right things, testing things. They start off getting five, a 6% increase in prices.
MW: 33:29 Then they find a few months later their confidence goes up as a result and they start getting 10 20% higher prices. Then their conference goes to another level and you just get better and better and better. So my advice to anyone takes some time to learn about pricing. You said the word earlier is confidence is a big issue. I think confidence is the single biggest issue is the single biggest thing holding us back and confident or lack of confidence comes from a lack of knowledge and a lack of systems. If you have the knowledge, if you do the education and you have some systems for pricing systematically, then suddenly you have the confidence.
MP: 34:04 Absolutely.
MP: 34:09 I echo what you're saying. It's, it's just little bits, little bits at a time or are what going to lead to these really impressive results. They don't happen. The one woman that you mentioned two years, well, even two years is, you know, if you knew it would be only two years, then you'd, you'd take that journey. If you knew that in two years you'd be making way more money and having way more satisfaction. I think it comes back to everything we do in life is just knowing, hey, where am I headed? Where am I trying to get to? What? What outcomes do I want to have? Making more money, having more freedom, having more enjoyment, you know, if you know that's the end. Well, listen, learn more about pricing. We know that's going to lead to those types of outcomes and just take a little bit, increase your education with people like mark today. I mean this has been fantastic. Uh, your confidence will grow. You'll be able to implement things like this, invest in things like the education with mark, uh, and, and join groups like the successful bookkeeper, uh, and get up, get with people who are doing it.
MW: 35:13 Absolutely. I think where it gets really exciting is once you go on this journey and you start to learn the systems and the techniques, one of the things I know you, you'll agree with us that the world's changing so rapidly with cloud technology, with machine learning and, and blockchain and all these sort of fancy words about, and you may have about it, nothing in the UK, Oxford University in Deloitte did a study in 2015 that suggested that 96% of what bookkeepers do will soon be automated, which is scary, which means that as a profession we have to change. The bookkeeping profession will change because of technology, which I think is an exciting and exciting opportunity. It means that we can, we certainly can't price by the hour anymore because some of the things that we do, which are valuable could be done at the touch of a button.
MW: 36:02 And I think one of the best examples is thanks to the wonderful reporting built it built into tools like QuickBooks online or if you plug in fathom or spotlight reporting, you can create some amazing manager reports which are just the byproduct you the press of a button, there's all the reports. And the big, big mistake is because it's a touch of a button, we give them away for free. And yet that management information interpreting the numbers is where the real values are. Historically, as a professional, we've been recording the numbers and yes we will for a while, we'll still continue to do that. But where we can change our client's lives is by helping them interpret those numbers, give them advice and improve their business. And what I think is fascinating about price is that not only is it a huge opportunity for us to improve our own businesses by pricing more effectively and for some firms are doubling their profits.
MW: 36:56 But when we do that, actually I think price consulting as a topic area is a space that accounting professionals can own because there are very, very few price consultants out there. And what we also know is that just like bookkeepers and accountants, most small businesses have no idea how to price. They are way too cheap, they are working too hard for two years on money and I think the bookkeeper can start to change people's lives by helping their clients get their pricing right. Once you've figured out the systems yourself and you are making it work and getting better prices, all that stuff is teachable and I think that creates an exciting future for the bookkeeping profession where they start to change people's lives and be seen as being the experts in business and, and to me being the expert in pricing, it prices a number and bookkeepers and accountants are the experts in numbers. We have credibility there much more so than other areas of traditional consulting like marketing, consulting and sales consulting. That's scary stuff. But price consulting prices just a number. And we are, we have credibility when it comes to the numbers that make up the profit and loss account. So I think the pricing is very exciting. I think the future is very exciting for the profession.
MP: 38:12 I agree. And I just love what you've said. I echo it completely. The, I guess the spirit of this podcast is to empower bookkeepers so that they can empower the people they serve, which are small businesses. And the more they know and the better they are at running their own businesses, the better they're going to be at helping those small businesses thrive, which helps build better communities, help provide a better income from for their families and for the people that work for them. So it's an admirable and honorable thing to be doing and it's got benefit all over the place. It's like win, win, win, win, win all the way. So this has been just great having you on. I definitely want to have you come back and share more, but before we let you go, where's the best place for our listeners to go and start to learn more about you?
MW: 39:02 Well, if anyone wants to see me live, I said, I think I had said earlier, I am actually coming across the pond, uh, several times this year. I will be at scaling new heights. I will be a QB Connect in San Jose. I'll be speaking in Accountex in Boston and uh, and then most exciting at the end of the year I will be speaking at QB connect in Canada, in Toronto again, which aren't really looking forward to because I got such a great reception there, uh, last November. So I'll be over at. So come and see me live at one of those events. Uh, also if you want to try out and get a free 30 day trial of my software cloud pricing, I can send you a voucher code and I can also give you some completely free video-based training. I do a lot of video training, so the best way to find out about all the stuff that I do is either connect with me on LinkedIn.
MW: 39:51 I'm easy to find on Linkedin, go and connect with me on LinkedIn. And then what I always do whenever an accounting professional and bookkeeper connects, I send out a message listing with some links to some free stuff or go and check out my website, which is wickersham.co.uk and when you go to my website, you'll find for example, you can get a few freaks and free things there. For example, you'll get, if you want a copy of my book, how to build a successful bookkeeping business. It sells on Amazon in the UK for 29 pounds. But please do not buy it on Amazon because if you, if you, as long as you pay the shipping and handling, I will, I will send you through the post a copy of the book and you can find details on my website. So my, my, my main advice is to connect on Linkedin and then we can start a conversation. We can start a dialogue and I can send you some links to some stuff.
MP: 40:41 That's great. Well, all of those links and all that information will have as well at Thesuccessfulbookkeeper.com and I encourage you to checkmark out and, and learn more about what he's doing is fantastic. And, and thank you for being on the, uh, the show today, Mark.
MW: 40: 55 Thank you, Mike. Love. Loved it.
MP: 41:01 Excellent. Until next time, we'll see you later. That wraps up another episode of The Successful Bookkeeper podcast. To learn more about today's guests and they get access to all sorts of valuable free business-building resources, you can go to Thesuccessfulbookkeeper.com. Until next time. Goodbye.
