CPA Practice Advisor - 23

THE MILLENNIAL ADVISOR

The Problem with Price

HAVE YOU EVER felt that your customers simply do not understand the value of what you
bring to the table? Do you suspect customers are starting to see your brand of expertise
as a commodity? If only they appreciated the very real value of what you do, then you
GARRETT WAGNER, CPA

CEO/Founder, C3 Evolution Group
garrett.wagner@cpapracticeadvisor.com

Maybe it is time to rethink how we
show our value to others by ripping a
page from Dell, Southwest, Allstate,
Disney, GM, and just about every other
major brand. They use the classic
"good-better-best"-G-B-B-marketing strategy to change the customer's
perceptions of fit, finish and a feeling
of having a choice. The results are
higher satisfaction, market share and
revenues.

OPTIONS
In price sensitive markets, the
concept of G-B-B helps human psychology do its job. Look no further
than Allstate insurance. Within
three years of rolling out its "Your
Choice" auto plans, Allstate sold
3.9 million policies. They foresaw
that customers wanted options
even when it comes to buying a
commodity. People ask themselves,
"Something has to set apart one
insurance from another-or why
would there be so many choices?"
Giving a customer options changes
the discussion from a binary yes/no
price point. Using tiers to illustrate
where value begins and ends generates the conversation. That's when you
demonstrate knowledge and differentiation. The beauty of it is, G-B-B is not
simply salesmanship and persuasion.
It is clarifying for intelligent decisionmakers where, when, how and why
your value kicks in.

could help them open so many more doors. You are not alone. Accounting firms across
the country are feeling the pain of growing price sensitivity in an industry long-perceived
as a necessary evil rather than a value-add.
UNTAPPED GROWTH
the highly valued items, and the Best
Uber owes much of its success to the
G-B-B pricing strategy. Uber started
in 2010 as a black-car luxury service
offering the very best product in an
on-demand model. Seeking revenue
growth, the premise expanded into
good and better pricing options.
Fast forward, Uber still shuttles
people from point A to point B. But it
makes most of its revenue from its two
lower-tier options. Not only do buyers
like options, but when faced with the
G-B-B options, buyers tend to change
how they view the entire market. Uber
is more than a taxi service, because
they offer consistent experiences but at
different price points. When you rent a
car, for example, how many times have
you debated spending another $5 per
day for the full-size sedan?

package showcases the premium
options. That is where you can tell
the stories of clients who grew and
evolved, proving that this was the level
of "best practices" that helped them
the most.
Have you ever thought about
changing your cable and internet
package to save money? You quickly
realized that all those channels you
truly value are only in the higher end
packages.
The G-B-B pricing model applies
to so many service industries, we
can embrace these concepts to yield
similar benefits. Will it feel uncomfortable and impersonal? It may feel
that way at first, but certainly some
skilled creative marketing people can
maintain your brand.

FRAMING

DEPLOY-TEST-ACT

Any good G-B-B strategy revolves
around framing the differences
between the three packages. Always
start with creating your "Good"
package and begin to frame up from
that point.
What is the bare minimum you
want to deliver? Establish a Good
base model that speaks to the kinds
of customers you tend to win and keep
long-term. Just keep in mind how those
relationships began-stay at a basic,
core offering and let new customers
evolve and graduate over time.
The Good package answers the
customer's most immediate and
common needs. It also leaves them
wanting more as they glance from
left to right. The Better package offers

Due to the nature of the G-B-B
pricing, it fits perfectly into a deploytest-act methodology of deployment.
As a rule of G-B-B pricing, 20% of
revenue will come from the good,
60% from the better, and 20% from
the best. With that in mind, organizations can deploy a pricing strategy
for a line of accounting services. For
example, bundle individual and
corporate tax returns for small business owners. Add other services that
relieve owners and LLCs of payroll or
other common headaches at Better
and Best levels. Test the results.
If an organization consistently
pitches ten potential clients with
this same model, it may begin to see
the results that fall in line with the

NOVEMBER 2019 ■

general rule. If not, tweak and change
the model and start the assessment
again with the next ten clients. The key
is to systematically deploy a pricing
methodology, test for results, then
make one or two changes until the
desired outcomes is achieved. Note
the importance of consistent and
changing only a couple of variables
over time; too many throw out the
baby with the bathwater when they
are just one more test-run away from
the winning formula.
When it comes to individual tax
returns, Good is the completion of that
tax return-a highly competitive, commoditized service. Your Better solution
may include value-adds, like free
extensions, guarantee of completion by
a set date, or bundling in an advisory
service you just rolled out. Your Best
option may include unlimited phone
calls and consultations every quarter
throughout the year.
Changing the way we price tax
returns may seem like a bad idea or
something that just won't work in our
industry. But we need to remember
that our customers are happily enjoying this same pricing concept across
all other aspects of their lives. When
was the last time you walked into the
grocery store and complained that you
had a G-B-B option for pasta sauce,
so you weren't going to shop there
anymore?
Make this the year you change up
your options, reframe the conversations with new customers and watch
as they begin to appreciate the very
real value you bring to the table. ■

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