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- W2201598882 abstract "[ILLUSTRATION OMITTED] To price effectively, CPA firms first need to determine clients' price sensitivity. Value-billing expert Ron Baker explains how to do that. A growing number of industry pricing experts are urging CPA firms to jettison the long-standing practice of hourly billing and replace it with a fixed-pricing model, or even the more optimal model of pricing. Few public accounting topics spark as much controversy as this one. To give members additional insight into this topic, the JofA sat down for a QA how will we help this customer grow their business? How do we help the customer achieve their preferred vision of the future? How do we remove surprises for the customer? And if the service entails risk, what is the worst thing that can happen if this project were to fail? You always want to take a look at trying to eliminate or mitigate the risk to the customer. Who on the organizational chart are we dealing with? If you're dealing with the CEO, they're probably less price-sensitive than if you're dealing with the controller. Who referred this customer to us? If it's a warm referral, they're probably going to be less price-sensitive than somebody who just found you on Google, because somebody's already bragged about you. In that case, there's usually less price sensitivity--meaning you can charge a higher price. Are there any serious competitors? Is the customer talking to other firms? Who are those firms? What do we know about those firms? Are they cheaper? Are they more expensive? Has the customer engaged with another firm to do similar work in the past? Why did they leave that firm? They may not be a good customer. They may be one of those customers that changes firms every year, which is usually a big red flag. What you're really trying to do is ascertain the customer's price sensitivity. If they're price-sensitive, they're probably going to only go with your lower-price options. If they're not as price-sensitive, they may pick the gold card or a platinum card option. When clients hear you talk about this, they may say, Wait a minute, they're just trying to gouge me. What's your response to that? Baker: We are not talking about gouging the customer or taking advantage of the customer, because one of the things that we're very strong advocates of is that all firms put in a value guarantee to all of their fixed-price agreements, which basically says, Mr. and Mrs. Customer, if you're not satisfied for whatever reason, only pay for the value that you think you received. If that's zero, that's zero. Now to me, that's the antithesis of being unethical. Plus, keep in mind that we're presenting these options to the customer before we do the work. The customer is voluntarily entering into this transaction. If they think any of our options are gouging them, they're not going to buy from us, and they're going to go somewhere else. I actually think there are more ethical issues when you bill in arrears under hourly billing. …" @default.
- W2201598882 created "2016-06-24" @default.
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- W2201598882 date "2015-08-01" @default.
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- W2201598882 title "Q&A: Price-Sensitivity Training" @default.
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