Avoiding the Commodity Trap: 3 Ways to Create More Value

In the first of this series of three blog posts, I explained what the commodity trap is, and the big mistakes our profession makes that lead to working way too hard for way too little money.  I told you that the key to avoiding commoditisation is differentiating your services so that they cannot be compared to others’.

Then, in my last blog post, the second in the series, I showed you how we can differentiate anything, and explained that we need to follow a high differentiation, high value pricing strategy to stop being seen as a commodity and stop pricing too low. 

In this final blog post, I want to share with you three different aspects you need to think about in order to create more value for your services following that high differentiation, high value model.

Tangible Benefits

The first thing you need to think about is how can create more tangible value or benefits.  What I mean by that is, whatever service you’re thinking about (e.g., bookkeeping), you need to consider what more you can add on to the service.  What more can you do to create value?

For example, are there additional reports that you could create?  It may be that once a month or quarter you create a report that might have some analysis of the numbers, perhaps some ratios, some trends, some benchmarking, that would help the client to understand the state of their business.  Additional reports are a great example.

Ultimately, what you need to do when creating more value through tangible benefits is understand what the real problems the client has are.  If you have a client who comes to you and they want you to sort out their bookkeeping, you need to ask questions to find out why that is.  What is the underlying reason that they’re coming to you now?

It could be that they’re spending too much time with paperwork, so what they really want is for you to save them time.  If that’s what you uncover, you need to think to yourself what more could you do to help save them even more time?  What are the processes you could put in place in their business?  What apps could you install for them to save time?  Are there any other systems processes that you can do?

The more we understand what the real problems they have are, the more we can understand how to address them.  That helps us to build a better package of tangible benefits that they will value highly and happily pay more for because that’s something different to what anybody else is offering.

Intangible Benefits

The next thing to think about, and even more powerful than the tangible benefits, are the intangible benefits.

What that means is considering the service experience you offer – the wrapper that sits around what you do. If you want to create something that’s different to and better than other firms, you need to think about making your service personal.

One of the things that stops you from being a commodity is being in the relationship business.  Sometimes sole practitioners think they can’t charge as much as large multi-partner firms, and yet one of the things that clients love about working with sole practitioners is they get access to you.  There’s that benefit of personality.  If they went and hired KPMG, they’d never speak to the senior partner.  So, we need to make sure that we recognise there’s value in that and stop being the cheapest just because we’re small.

How can you improve personal service and the overall experience your clients have?  For example, if you have physical meetings and clients come into your reception area for a meeting, how can you make that experience extraordinary?  What about the experience of parking in your car park and the greeting they get in reception?  How can you make the whole thing memorable and special?  Those are the things that people remember and appreciate.  When you do amazing stuff and deliver things in a special way, people will talk about you.

If someone appreciates speed and timing, think about how you can improve your internal processes so that you can do things faster than other firms.

Another important intangible benefit is your brand and reputation.  One of the things I talk about a lot is your expert positioning.  Perhaps you could write an eBook to position yourself as the expert.  Or you could create a blog, a YouTube channel.  These things are going to boost your personal brand and reputation.

The best kind of clients want to work with the experts.  Think about your expertise, your capabilities, your skills.  What is it about your training and past experience that gives you skills in something that most other accountants and bookkeepers don’t have?  Build on that and focus on having skills that make you stand out.

Perceptions

The third area to consider is all about perceptions because it’s not necessarily what you do but the clients’ perceptions of what you do that matters.

A lot of that comes down to how we communicate things.  The words that we use on our website, the way our website looks.

Have you got case studies and videos of clients saying amazing things about your firm?  Put those on your website so anyone visiting you knows the extraordinary things you are doing.

You may not be any more experienced or qualified than the next accountant or bookkeeper, but when clients go to your website and see people saying wonderful things about you, their perception is going to be that you are better.

Let’s recap…

Let’s recap everything we’ve learned in this series of blog posts.

First, we should never, ever compete on price.  We cannot play that game.  And we mustn’t think of our core products, particularly compliance services, as being commodities.  You are not selling commodities; everything you do can be differentiated from what everyone else is doing, it just takes some creative thinking.

When we do that, what we find is that the right clients, the clients we want, will willingly pay more money because they understand that they get more from you.  You have to learn to communicate the benefits you offer that set you apart from everyone else.  Tell your clients about everything you do for them, why you do it, and, most importantly, how they benefit.  What are the problems and pains that you are taking away?

When you do that really well, you can charge much higher prices and people will still choose you because they see you as being different to, and better than, other firms.

If you’ve enjoyed this blog post, check out the full live session it’s based off on my YouTube channel: https://youtu.be/oMe1xawwDsE

If you found this valuable and would like to learn more about value pricing, I run a free live online training session every month with a topic chosen by you. Attend live and you can ask me any questions you have. Click here to register and I will send you an invitation to the next session.

Wishing you every success on your pricing journey

Mark Wickersham

Chartered Accountant, Public Speaker and Author of Amazon No.1 Best Seller “Effective Pricing for Accountants”