Episode #026 Should You Put Your Pricing On Your Bookkeeping Business Website?
There’s been a big debate in our industry about whether bookkeepers should put their prices on their website. Amy talks about whether this is good for business (or not!)
The real message of this story is: “Once you know your value and your ideal clients, pricing becomes much easier!”
Host: Amy Hooke
Guest speaker: None
Topic: Should you put pricing on your website?
Good morning. Welcome. Thanks for coming back again today. I’m going to be talking about a question that I get a lot with pricing, which is, should I put my prices on my website?
Now this is definitely a topic that does get debated amongst bookkeepers. But I believe from what I can see that the consensus is do not put your prices on your website because if you do that they’re going to judge you based on price rather than the value that you provide.
Now, I guess in some ways you could put weight on both sides of the argument. So, I think that in some cases not having your prices on your website will lose you business, and in other scenarios it will gain you business.
So, I guess the first thing I want to talk about here is putting ourselves in the shoes of the client. Just have a think about it for a moment. Have a think about when you need to purchase a certain type of service, and you go to the person’s website. How do you respond personally when you look on that person’s website and you can or cannot see prices?
I guess there’s a range of reactions that you could have. So, for example, you might think oh they don’t have prices, they’re probably really expensive.
I know there’s certain industries. So there is an industry that’s very similar to bookkeeping in a way is actually the copywriting industry. So in the copywriting industry the reason I think that it’s kind of similar is, aside from the fact that bookkeepers are number’s people and copywriters are words’ people, in every other sense there’s actually so many similarities.
So, for example, the discussion about putting prices on your website and how to price your services is huge in the copywriting industry as well. There’s also that similar debate on whether you should charge by the hour, whether you should charge for projects and to charge an upfront fee or whether you should charge retainers. So the wording is different, but the concept is really the same.
Many copywriters don’t put their prices on their website for the mere purpose of not wanting other copywriters to copy them and to see how much they charge. Now, obviously with copywriting and bookkeeping, there are also differences in the way that those businesses operate.
So, a lot of bookkeeping tends to be repeat work whereas with copywriting they might get small projects here and there. However, many copywriters do offer themselves on a retainer because the client might need some regular work done. For example, they might need a couple of blog posts every week, they might need an email campaign every month and that kind of thing. So there are actually a lot of similarities in that sense.
Also, it’s a very detailed focused job. It’s quite funny, I always make a joke about this, but bookkeepers always email me and tell me where I’ve made spelling and grammatical errors in my blog posts and various copy, in my portals, all sorts of things like that.
So I’m not great at grammar. I’m definitely not a copywriter although I am, which is kind of funny. So I do copywriting for bookkeepers. But I would say that when I’m in the creative zone I definitely I’m not, I’m trying to think of how to get the content out on paper rather than editing as I go.
So I actually have a professional copywriter working for me who then goes over everything that I’ve done to make sure that it’s correct. Otherwise, I know that I’ll be getting some emails from bookkeepers pointing out all of my mistakes, which by the way I really actually don’t mind at all. I really appreciate that, so thank you.
Yeah, so back to the pricing and the contrast between bookkeeping and copywriting industry is that there’s a lot of pressure on copywriters to switch from an hourly rate, and a lot of copywriters get told that if they’re charging by the hour they’re doing the wrong thing.
It’s exactly the same in the bookkeeping industry. People might assume because I teach pricing and specifically I teach bookkeepers how to do package based pricing, people automatically assume that I’m anti-hourly rate, and I am actually not anti-hourly rate.
My view on whether you should charge packages or value or fixed price or hourly or whatever, the answer to which one should I do is it depends. It really depends on your business model. It really depends on the type of clients that you’re servicing.
At the end of the day, we need to really balance out what’s best for our clients and what’s also best for our business heading into the future. That can be tricky sometimes because obviously you’ve got a range of clients with different types of needs, and you’ve got to balance up whether you want to kind of put your pricing in place and just say this is the way we do it and there’s no options around that.
But when you’ve got an existing client base it can be tricky to do that because you’ve got clients who are used to the usual way of billing and if your clients already think that your fees are expensive, then you might have trouble transitioning from the hourly to the package billing because they’re already price sensitive.
I think one of the big concerns that business owners have with fixed billing is I think they’re worried that they’re going to be paying more than what they’re receiving. So what they’re worried about is are they going to be getting good value for money.
It was really funny, I actually woke up thinking about this, this morning about value for money, that saying value for money. So what does value for money actually mean? Probably an interesting thing to actually mention here.
So, I’m not going off any dictionary definitions or anything like that. I’m going to just attempt to pull a definition out of my brain from all of the information that I’ve kind of looked at in the past.
But if you think about it from a practical example, let’s say you go down to the shops, and you see a bed shop, and you’re like okay I actually need a new mattress. So I’m going to go into the bed shop, and I’m going to have a look at these new mattresses.
And you’ve got in your mind that mattresses are really expensive. Normally you’ve seen them priced at let’s say $3,000 or $4,000 or even $5,000 for those fancy kind of mattresses.
So you go into the shop, and you have a look in there and yeah, that’s correct, you can see that there’s all these very expensive mattresses. Then the ones that are quite cheap they’re not as comfortable. So you might be thinking … Obviously you’re in the process of weighing out what’s expensive and what’s good, and you’re trying to balance out the comfortableness of the mattress with the price.
So you might go oh this is the most comfortable mattress I’ve ever laid on, but I can’t really justify paying $5,000 for a mattress. Then you might lie on the one that’s really cheap like let’s say a couple of hundred dollars you might go, oh wow, this is really cheap. But it’s really not that comfortable. I can sort of feel the springs poking into my back or whatever. Hopefully you wouldn’t get that.
So what are you looking for? You’ve probably got an idea in your mind. You might think, okay, really if the mattress is amazing I’d probably … Look, I don’t really want to pay $2,000 for a mattress but if the mattress is amazing, if I lie on it and it just makes me almost want to fall asleep on the spot and if I can get a good night sleep from this mattress, well that’s actually worth a lot of money.
Even though I don’t really want to pay $2,000, paying $2,000 would be … I could justify it in my mind because sleep is important, and I want to be comfortable at night and that kind of thing.
Then you might also have in your mind what are … I prefer to pay it around $1,000 mark. So you might have a dollar figure in your head. So you might kind of think, okay, that’s the figure I had in my head. But you didn’t realize that was the figure you had in your head until you started shopping around.
So, until you start to shop around you don’t really know what’s out there and so you’re thinking I’ve got a bit of a vague idea of what I want. I’ve sort of got a vague idea of how much I want to spend. But until you start looking you don’t really know what is around.
So, one of the ways you might do some research is you might look online and see what’s the average cost of the mattress and that kind of thing. Or you might ask some of your friends. You might ask other people how much did you pay and what kind of mattress do you have and do you recommend it? And you might ask is it worth paying this much for a mattress and that kind of thing.
Then let’s say in your search you go online and then you come across one of those online mattress sellers. So you’ve probably heard of Koala. We bought a Koala mattress, I reckon about two years ago. We were both thinking that we needed a new mattress because it wasn’t super comfortable and that sort of thing.
I came across Koala mattress maybe in a Google search, or it might have popped up on my Facebook page and so I started to look at it. So, what I would do is I started to look at their website. As you know, when you’re researching buying a product, you might revisit their website a couple of times.
Then what you do is you’re doing that same process in your mind that you would do if you went into a shop. You’re weighing up the comfortability versus the price except the difference here is that when you go on a website you can’t actually lie on the mattress. You have to actually trust what you see on the website.
So, the things that you look at on the website, so you definitely look at the pricing. So if someone said to you would you like to buy this mattress, and we’re not going to tell you how much it is, but you have to actually call us. Bookkeeping and mattress is a little bit different. But have a think about how you might feel. You might think oh, that’s a bit strange.
Obviously with shopping it would be strange if people don’t put the prices. In fact, when people don’t put the prices, you know sometimes you go on a website where they sell a certain type of product, and they don’t have prices, and you think what? You’ve got to into a shop or call them to figure out the prices? It’s actually a little bit inconvenient, and it doesn’t mean you’re price sensitive.
I mean how many people out there are truly not price sensitive at all. As in people who just go oh I really like … Okay, obviously there’s a lot of good people in the world who might go, oh I really don’t care how much the mattress costs me, I want you to go out there and get me the absolute premium mattress like, I don’t know, one that’s got automated heating device installed in it and it’s got the little things that help you to sit up in bed and all that kind of stuff. So maybe it’s got a call button where you can ask your partner to get you a drink or something like that. So, I think it’s very rare.
We’re always talking about we all have this ideal client in our mind, which is a client that has unlimited money and doesn’t really care about the price. But they do care about the value. Then obviously then you’ve got people who care about the price and not so much the value. You might have people who they just like to buy things that are expensive because it’s kind of posh to do that.
But the thing that I’ve seen in real life in the business world we automatically assume that more expensive is better quality, and I have found that that is completely the opposite. I found that with bookkeepers that I’ve hired in the past. And I’ve found that with also just all types of services. So more expensive doesn’t equal better quality.
But back to the mattress analogy. So what happened was I looked online, and I started assessing these Koala mattress, and the things that I looked for. So I read lots and lots of testimonials by lots and lots of happy people all saying how great the mattress was.
So testimonials are a great way to show people that they’re happy that they’ve used your service and that they’re happy with that service and having those reviews on … You can have them on your website, on your Google, you can have them on your Facebook and on your LinkedIn. That’s where people go to have a look.
So they’re going to weigh up. People don’t just look at price and then go see you later. Although, there will be a category of people who just look at price and say see you later. That’s actually okay because there are bookkeepers out there who can service people that have that particular price point and there’ll be people who don’t really care that much about value. They just want a cheap service, so they can kind of get it done.
I’ll just give you an example. Last week I scoped a job and this guy … You know I talked about it on the last podcast and the one before so I won’t go into the whole story. But this guy was very price sensitive. He thought that the bookkeeping was very simple and that kind of thing and he was quite appalled at my quote.
He liked the first quote, which was based on what he told me, but he didn’t like the second quote, which was based on what I saw in the data file when I actually scoped out the job. So, that was an interesting thing there.
But the reality is that was a price sensitive client, and he wanted… I quoted him $400 a month. To me that’s a small client. But he wanted to pay the first quote, which was $160 a month. So he told me X amount of transactions a month turned out per quarter, turned out that was the monthly amount of transactions, so the quote was a bit bigger.
Yeah, so he decided to go elsewhere, which was fine because he had a certain price point in his mind, and his response to me even was, “The second quote is too expensive. The first quote was more on the money, I’ll go somewhere else.”
It was really what I expected but as you can see he’s got a figure in his mind. So if I had asked him straight up how much, what’s your budget for bookkeeping, he may or may not have known. But what happens if people when they get asked they might not actually know. They might not be able to give you a dollar figure.
So for example, if you say, “What’s your budget for bookkeeping?” They might go, “I have no idea. I have never had a bookkeeper before.” Or they might have a bit of an idea like maybe they’ve been doing it themselves. And they go well it takes about an hour and I probably, I don’t know, I guess bookkeepers maybe are paid about $40 an hour, or something like that.
So they might go, yeah an hour a week, four, yeah okay, so four hours at $40. Yeah okay about $160. I think that’s probably about what I think that I would pay.
But they’re not really sure especially even then they’re not sure. If they know how long it takes to do it themselves they might then think oh, well hopefully it will take the bookkeeper quicker.
So this whole conversation that goes on inside every person before they go on the buying journey. So like me with that mattress I had an idea in my mind of how much I wanted to spend on a mattress.
I knew I wanted to spend … For me it was less than $1,000. I knew I wanted to spend less than $1,000 and I thought I’ll go a bit over if it was really comfortable.
So I kept looking at this Koala website, and I kept looking at the price, and their mattresses are $1,000 or about $1,200 for a queen sized mattress. Although, yeah, because at the time it was $900 so I was like oh cool and then you go on and then you change it to queen size and then you can see that okay, it’s actually a bit more than that.
So I looked at it and looked at it a couple of times. I reckon I visited the site maybe three or four times and then I thought to myself I wonder what else is out there and also because once you start clicking on Koala ads you start getting ads from some of the other mattress companies as well.
So I started comparing another type of mattress, and they’re kind of both made out of different things and one is memory foam and whatever. They’re all different materials mostly stuff that I have no idea about. Sort of like a business owner when they go into a bookkeepers’ website, they’re looking for bits and pieces that they understand like are you fast, okay payroll, yeah. Then they look for the pricing page.
I can tell you, so we’ve developed websites for bookkeepers, and we do their Facebook ads and their Google ads and things like that. So what I do is I actually take screen recordings. So, I’ve watched many, many business owners come to websites and have a look around the website.
So I’ve seen a lot of buyer behaviour. So, from my experience and in some cases depending on the bookkeeper and who their target market is, their pricing on the website can be an asset, or it can be a liability, and I’ve seen both happen.
So, what I do is I watch the screen recordings. I can see where they click. I can see where they move their mouse. I can see where they scroll and how many different pages that they visit. It’s actually in real time, so I can see if they fill out a form and things like that, and it’s actually quite fascinating to watch how consumers interact with bookkeepers’ websites.
So, obviously there’s lots of opinions out there about whether you should or shouldn’t put the prices on your website. But rather than just taking opinions, it’s actually better to go off of observation and take a bigger picture into perspective because often opinions … So the thing with opinions is when people share their opinions they might say to you … You might say, “Oh, should I put my pricing on my website?” And they go, “Oh no, you definitely shouldn’t because it’s going to put off price sensitive clients, tire kickers as they’re sometimes called. So it’s going to … You’re just going to attract tire kickers by having the prices on your website.
The problem with opinions is often the opinion is actually based on just hearing that from someone else. So, I don’t know if you’ve ever noticed, but sometimes when someone asks a question, I don’t know if you’ve ever noticed, but have you ever responded to that person’s question with an answer that you don’t actually know is true. It’s just something that you’ve heard someone else say from somewhere else, it’s secondhand information.
So I think it’s always important to consider your business model, to consider the type of client that you’re working with and your particular market. There’s so many different things that get factored into this. It can be based on what type of software you use, it can be based on your location. So city versus country. It can be based on the range of services that you offer. There’s so many factors involved.
So anyway, I should get back to my story about the Koala mattress. So finally I thought to myself, yeah, you know what? It’s a little bit more than I want to pay because I sort of also want to buy some new bedding and things like that.
But anyway, I thought, you know what? I’m just going to give it a go because they’ve got a 90 day money back guarantee. No, they’ve got a 12 month guarantee. They’ve got … It’s quite funny. Yeah, they’ve got a 90 day sleep on it and then return it if you’re not happy guarantee, like a change of mind.
Then they’ve got a, not even be a lifetime warranty to be honest. So, I thought well I don’t really have anything to lose. If I’m not happy with it I’ll just send it back although I would have put my existing mattress in the hard rubbish, which I did.
But anyway, the mattress turned up, and it was the same day delivery. I pulled the mattress out and being in a packet it was a bit stinky. It took about a week to air it out, which was kind of gross. It made the room smell like, I don’t know, whatever fabric it’s made out of.
But anyway, after that cleared I was completely happy with it. From the moment that I lay on it I was like, oh, this is actually really good. It’s sort of firm enough. It’s comfy enough. It’s not spongy or anything like that. It’s just kind of the right balance between soft and firm, which is what I like.
Anyway, so I slept on this mattress, and it was actually far into … It did end up having an issue, and I ended up getting a replacement. So it was a bit of an unusual thing actually and that hasn’t happened with the second one, which was a bit random.
But anyway, when I first got that mattress, and I first slept on it, I actually thought to myself, wow. When I took the overall picture into account, so I took the fact that they delivered it on the same day. I placed the order and that afternoon the delivery person was on my doorstep and there was a new mattress in my house.
So I kind of thought, oh wow, okay. Firstly, it was a little bit more than what I’d wanted to pay. But instantly, that just increased the value. So the value is the difference between what you pay and what you get in terms of, you know, and it can be a perception thing. It can be a taste thing. It can be … There’s so many factors involved in what someone else considers as value.
But for me so what increased the value was getting it really quickly and then getting it and it being just what people said it was and it being comfortable. Then what increased the value again, it was the two guarantees that they had.
Then the next thing that gave it value was the fact that when something did actually go wrong with it down the track, they just replaced it. So I just had to send a couple of photos, and they actually just replaced it.
So, as you can see in that example, there’s multiple factors that increased the value but the value, people think that value pricing means that you don’t think about how much something costs and things like that. It’s actually not true, it’s just that for that particular person that is what they saw as valuable.
So is it true that if you put your prices on your website that you’re going to decrease the value in someone’s mind or that you’re going to be unable to show the value and demonstrate the value? Well, again, it depends, and I know you probably don’t like it when I say that, but I do say it all the time.
So if you don’t like it you’re going to have to either get used to it or don’t listen to my podcast anymore because that’s often my answer for lots of different things. The reason that it depends is because there’s no one business that is exactly the same.
Yes, from a buyer’s perspective maybe some buyers think that all bookkeeping services are the same. But in my experience hiring bookkeepers, not all bookkeepers are the same. There’s lots of different types of level of service and different people require different levels of service at different times as well.
Does someone just need their accounts recorded at the end of the month or quarter to do their BAS or the end of financial year to do their tax return? Or do they need you to be checking their emails, do they need to check their emails on a daily basis and do invoicing and follow up clients and things like that? There’s a huge vast difference in the level of service that is required for those two and that’s where the value comes in.
So, one of the things … So people automatically think that value equals expensive and that kind of thing. But what it is, is value is where there is actually a good balance between the price and what you actually get for that price.
So when we say that something is good value for money, sometimes it means wow, that was really cheap compared to what I got. That’s what we think is valuable.
But then on the other hand, it’s like wow, that was quite expensive but this is really amazing, it’s really helped to solve a lot of the problems that I was having. So in that sense something cheap can be valuable, something expensive can be valuable.
So, the question that I asked at the start is, should you put your prices on your website? I’m going to be really annoying here, and I’m going to say of course it depends but what does it depend on? Well it depends on you. And what else does it depend on? Well, it depends on your target client. It depends on who you’re going to work with.
A lot of bookkeepers say that they don’t want to work in a niche, and that’s completely fine. But I think bookkeepers who say that don’t actually understand what a niche is. There’s lot of different ways to niche where you can have variety. So you can …
I have talked about this on a couple of different podcasts that you’ve got the horizontal, the vertical and the diagonal niche, which I’ll put a link for you in the transcript notes because I don’t really have time to fully explain it.
But on the gist of it, you’ve got different ways to segment your ideal clients. You can go vertical, which is a deep. You’re going deep in your knowledge. You’re going to one industry, and you’re learning everything that you can about that specific industry.
Or you can go horizontal, which is you go broad across industry, but you refine your niche based on something else, something other than industry. So it could be the type of software. It could be the size of business. It could be the size of payroll. It could be a certain type of specialisation.
In the bookkeeping for example, a lot of bookkeepers don’t do inventory. So it could be that we specialise in any businesses that have inventory. So that’s what I call our horizontal niche because you’re kind of going broad, but you’re still specialising.
Then you’ve got the diagonal niche and this is all about the people. This is about the type of people you want to work with. The best way to work out your diagonal niche is to make a list of, actually picture the worst client you’ve ever had in your entire life and make a list of their characteristics.
Then next to each of those characteristics write the opposite to that and then that’s … Then from that perspective you actually have a bit of a snapshot of the type of people that you’d like to work with, and the people who you don’t like to work with.
So the reason I call that diagonal is because it’s kind of neither vertical nor horizontal. So, the diagonal niche actually helps you to work out which type of people do you enjoy working with. So, for example with me and that client that I told you about that I did the quote for, I knew straight away he wasn’t an ideal client.
The type of people I don’t like working with are people who are like I’ve given you my money, now give me my stuff or people that imply that what I do is easy. It’s just a little bit of this and whatever.
It’s sort of like an attitude that I really don’t enjoy working with. I enjoy working with people that understand that when they pay me money, they are paying for access to me. They are paying for access to my expertise, and they’re paying for the right to engage in a discussion with me on a one-to-one basis. That’s what it is.
I think we should all seriously think about the type of people we like to work with. The way that I view who I like to work with is different for other people. I had this cool … I’ve got this actually this great bookkeeper who I work with just on a monthly basis, and we do mentoring sessions. When we were talking about her niche, she’s not like … I don’t know.
I think I’m a bit of a kind of sensitive creative person. I’m a bit of a right brain person in a left brain world of bookkeeping. So, for me I’m really … I enjoy building relationships with my clients, and I love collaborating with them and working together. Some people don’t care about that. They’re just like just do the work, and I’ll pay you and that’s it.
Some people actually enjoy I show up, I do my job, and I go home at the end of the day. Whereas for me, one of my highest values is meaningful work. So for me I have to see purpose in what I do. I have to be able to see the big picture, and I need to understand why I’m doing a particular thing. So I like to kind of zoom out and look at the big picture.
Other people are not like that, and this bookkeeper that I’ve been doing mentoring with, she’s really cool, she said, she goes, “I’ll work with anyone. I don’t really mind what type. I don’t care if they swear. I don’t care if they …” Do you know what I mean?
That’s actually cool as well. We all have a certain set of values that we work under. Things that are important to us, things that if they are missing from our life and from our business we find it challenging to work.
So I really urge you to actually work out your niche. One of the ways that you can do that is download my business plan template. It’s completely free. It’s got six sections, so the business plan is really … It flows through six sections, and those sections are done in a particular order for a particular reason.
So those six sections if you do your business in that particular order you will find things a lot easier. You’ll find a lot less back and forth on things like that. So, the first step is a high level overview of your business plan. The second step is pricing.
Then after that you’ve got your branding and marketing and then your sales. Then after that you’ve got your developing your range of services and then your team, developing your teams as well.
So, as you can see, pricing goes in there. I slot that in there before marketing because, you know, until you know … And before that it’s figuring out your niche. That’s the first part. Step one, business plan is figuring out who you love to work with, who you don’t love working with, and you start to get a bit of an idea of what type of issues those particular people have.
Then from there you can price it accordingly. So then you price your services for that particular market, what’s going to work best for them and what’s the best way to display that pricing. So some of the clients that I work with decide to stick with the hourly and others go to packages. Some do a combination of both and that’s completely fine. But it’s more about looking at the bigger picture of what do you actually want to achieve with your business and these hourly or package is going to be the best way to accomplish that.
So you look at that and then you kind of work your way through. At that point that’s where you need to model out what your team might need to look like because obviously we can all go, oh, I’d love to have 20 clients and me turning over $250,000 a year or whatever.
But a lot of people don’t sit down to think about okay, well how many staff will I need to meet the demand of that work? So this is the sort of stuff that I help bookkeepers to do in our sessions.
But once you figured out your niche, you’ll know how to price accordingly. Then based on whoever your target market is, a website might be good for you or maybe not. Some of the people who come to me for websites I actually end up saying to them a website is probably not going to be the best set up for you especially at this time in your business.
But if a website is right for you and you’re wondering whether you should put your prices on your website, then that’s definitely something that you can do.
So part of what we’ve been offering as a service to our clients is we’ve actually got a range of pricing tables, different types of ways of displaying your pricing because there’s actually quite a few different ways, believe it or not, to display pricing. So we’ve got quite a few different ways of displaying pricing.
There’s tools out there. So, for example you’ve got Practice Ignition. They have a tool where you can install a pricing kind of calculator tool on the website. Now, I can tell you upfront, I can’t imagine, unless it’s a very small client, no client is ever going to go on your website and purchase bookkeeping services without having a conversation with you.
I doubt in the world that that’s ever going to happen. Maybe it happens very randomly, and please feel free to prove me wrong, but those types of tools even though I don’t believe anyone is ever going to go to a bookkeeper’s website, calculate a pricing thing and then sign an engagement letter without speaking to the bookkeeper.
I think people want a level of reassurance and build a level of trust with the bookkeeper because it’s a very private area of their life, their business finances. So from that perspective I don’t think those things are … They’re kind of bells and whistles.
But on the flip side, I think that actually grew this well because even though the person is not going to sign up on the spot it gives them a guide. People like to have a guideline of how much they’re going to pay.
So, I think in some instances it’s very helpful and in fact in your advantage. I’ve spoken to a lot of business owners and various people I’ve spoken to, accountants and bookkeepers and all sorts of things. There are people out there who actually feel frustrated about the fact that bookkeepers firstly don’t display pricing on their website. And secondly, that there’s such inconsistency in our industry.
I have talked about this quite a lot. I think I’ve talked about it in the episode about PITA clients. I guess it’s probably something that I go on about all the time as well. But there is a discrepancy in our industry between the level of service it’s provided, and the price it’s paid, or the hourly rate that’s charged.
So, I think there is a lot of pressure in our industry, and I put my hand up, and I’ll be the first to admit that I am guilty of this. So when I first entered the world of bookkeeping online, because I was a bookkeeper for 20 years, and I didn’t know that there were these online communities and everything.
So when I joined Facebook, let’s say 2014 when I first started off the book bookkeeping, I logged into these Facebook groups that were for bookkeepers and that’s when I discovered there was this whole world of other bookkeepers out there who I’d never had any contact with before, and it was great because everyone was sharing information, and you could go to them for help and that kind of thing.
But unfortunately, the stuff that you get online on Facebook groups, especially if you don’t know what kind of questions to actually ask, you get a lot of quite bad information in those groups.
So the information that gets thrown around about pricing is just a lot of it is based on people’s opinions, or it’s even just based on something that worked for a specific bookkeeper, but it’s not taking your business model into an example.
But in those groups I was the first person in those groups to put out my hand and say I tried $80 an hour or $100. I was charging between $80 and $120 an hour depending on how many hours they purchased from me each week. So my average client was on about $80 or $90 for my weekly and fortnightly clients.
I was the first person in there telling everyone you should put your prices up, you need to be valued for what you do, and that kind of thing. I’ve done a complete 180. You’ve probably heard, I don’t know if you’ve heard me talk about this. If you’ve ever done my pricing course you’ll hear me talk about this.
But I actually think by putting our prices up and up and up and up for the core bookkeeping service, I think, I believe, this is my very strong opinion, I believe that we’re actually wrecking our industry and what we’re doing is it’s sort of like what happened in the fitness industry.
So when … There was a time where anyone could do a Cert IV and become a trainer, like a personal trainer or whatever. What happened is in those courses they’d tell the students that you can charge $60 an hour or $80 an hour for personal training.
What would happen is these people that have a Cert IV would come out of their Cert IV, start their personal training business with hardly any experience at all and just go out there and expect to be getting paid $60 to $80 per hour.
So a lot of gym owners were very frustrated with this. Then obviously you’ve got people, clients paying a lot of money, and they’re not necessarily getting that high level of service.
So that’s an industry that it still hasn’t been regulated. Whereas the bookkeeping industry now introduced the BAS Agent registration requirement, which obviously did something for the industry. But like I’ve heard of bookkeepers just getting other bookkeepers to sign off their hours.
So there’s no guarantee just because someone is a BAS Agent it doesn’t mean that they’re better and just because they’re better it doesn’t mean that they’re actually offering good service.
You could have the most highly skilled, technically trained bookkeeper in the world, and they could be rude or a jerk or they could be really sloppy in their response time or maybe they never respond to emails on time or whatever.
So there’s not necessarily a balance between skill level and whether someone is a BAS Agent or not a BAS Agent. The correlation is not always there.
So I think it’s a mistake. A lot of bookkeepers are saying oh you need to put your prices up. Obviously the industry averages 65, that’s what being reported. However, we say that’s the industry average but that’s what’s being reported to ICB members. Now I don’t know but maybe ICB members tend to be bookkeepers who have more years of experience, maybe they have been doing what they do a lot longer. Maybe they have a higher level of expertise in general. I don’t really know.
Maybe there’s a lot of bookkeepers out there that aren’t ICB members that maybe they don’t join ICB because they don’t, you know? Maybe they feel that it’s expensive or something like that. I don’t know. Whatever the reason might be. But my point is there could be all these bookkeepers out there that charge a lower rate, and they actually offer a great service.
You know we automatically go oh, a cheap rate must be bad service. Pay nuts, get monkeys, that kind of thing. I just think that’s one of the biggest lies going around in our industry. I think it’s a bad mistake for us to be telling young bookkeepers to, you know, bookkeepers that are … When I say young I mean new to the industry.
If you’ve just finished your Cert IV and you’ve only had a handful of clients, you don’t charge the industry average of $65 an hour, you charge less because it’s going to take you longer to do what you need to do, and you don’t have the level of expertise.
But at the same time, I believe that bookkeeping itself, the core bookkeeping and the data entry, the reconciliations, I believe that that sort of stuff it does hit a cap.
There is a point where that type of bookkeeping you can’t just keep putting your prices up and up and up because eventually business owners are going to go, I’m not going to pay that much money for bookkeeping.
However, there are services that bookkeepers do that are actually worth more in the eyes of the client and also to the bookkeeper. So there are ways that you can increase your prices without increasing your prices in a way.
So, I can’t really go into that right now because I don’t have time. But if you’re interested in hearing more about that, you can sign up for pricing basics.
I’ve got a couple of pricing courses. One of them is pricing mistakes, which is a free course. Then I’ve got a very reasonably priced course where I go through, and I just break down all the basics of pricing, and it will give you the templates and everything that you need to calculate your packages.
The other thing, as I said, we’re offering … If you’ve already figured out your packages or even if you haven’t, if you’re in the process of doing that or even if you’re on an hourly rate, and you need some help on how to display your prices on your website, please get in touch with myself, with my husband William.
So William has been in charge of developing all of these different types of ways of displaying prices. So you’ll be able to have a look at the gallery of items, pricing tables that he uses and things like that, and he can install those for you or you can install them yourself.
But let’s keep the conversation going. There’s a lot of people that are like oh, let’s just stop talking about pricing, okay? Everybody just … If you want to charge by the hour you just do it and leave us alone, we don’t want to hear about pricing.
The reality is that bookkeepers want to hear about pricing. The reason they do is because there’s a building and growing demand coming from business owners. There are business owners who will not work with you if you don’t charge a package.
So, the reality is the times are changing. The way that we operate is changing and not everyone has to change and there will be clients who don’t change as well, and that’s completely fine. But it’s not a bad thing, it’s not like, oh, there’s something wrong with you because you’re not doing it this way.
But the reality is the discussion needs to keep going because there are still people in that space of wanting to know how to do it and wanting to know how to serve their clients in that particular way.
The great thing about pricing based on packages is that it actually gives the bookkeeper an incentive to that level of service. Whereas, I’ve seen this in the contractors I’ve hired in my business. I’ve seen that even with copywriters. I’ve had this kind of this hourly billing where there is actually a disincentive for that person to get the work done quickly.
There’s actually an incentive to do a bit of extra things. There’s an incentive for, and I’m not saying that anybody is being intentionally dishonest or anything like that. I’m absolutely not saying that.
I’m just saying that when the person commits to a set amount of a fee there, and you still need to scope that, you still need to have boundaries on what is included in there. It’s just not unlimited. I’m going to be running a session in the next little while to teach people how to scope jobs, how to do a rescue job and how to do a bookkeeping health check as well.
So these are all skills that we all need to learn. So let’s keep the conversation going because the conversation about pricing it does need to happen. There are issues in pricing in our industry and this isn’t about pricing gurus making fancy claims about value pricing and things like that. This is about a real problem, a real pain point for bookkeepers that needs to be solved.
So we’re here helping to solve that problem, and it’s been a lot of fun along the way. It is an interesting journey to be able to dig into someone’s pricing and help them to work out what it is that they really want to do with their business.
So anyway, thank you for your time today. It’s been a pleasure as always to, you know, bring you this information and knowledge out of the depths of my brain and to keep you company today. So anyway, I’ll look forward to seeing you again next week. Thanks again. See you soon.