When Was The Last Time You Did Pricing Discovery?

When was the last time a client pushed back on your advice fees? If the answer is never or rarely, then maybe you need to reconsider your pricing strategy.

Most Advisers seek to create an engagement with clients that involves very little tension around the pricing discussion. Yet this almost always leads to lower margins, lower service levels, and lower perceived value.

Having difficult pricing discussions with clients is uncomfortable. But building a profitable and efficient business will take some uncomfortable conversations and also some looking in the mirror.

Price Discovery

Introducing price discovery….. Price discovery is the act of taking your value (advice) to people who wish to use that value (clients) and discovering what they are willing to pay for it.

How do you actually know what your clients value or what they are willing to pay for it? The only way to find out is to take it to market. Test your clients, and gauge where that sits.

Do a review of your book and see what clients are currently paying for your advice. At what level do you need to get your client fees so that you can run an efficient and profitable business?

In your next review, have the conversation about repricing your clients to the desired level of fees for your business… see what the reaction is. It’s all about discovery.

But what if they leave?

Naturally, some clients will leave. In fact, if no clients leave, you have set the bar too low and haven’t implemented a successful price discovery strategy.

If you could have fewer clients paying higher fees, wouldn’t that be a good outcome? It might give you time to focus on attracting new clients who are willing to pay higher fees.

Remember, you don’t need to abandon your client completely. If you are an adviser who feels a duty of care to every client, maybe you could switch off an ongoing fee and move the client to a fee-for-service model.

It isn’t easy…

Repricing your clients is not an easy task. It takes courage. You need to be confident in the advice you give and the value you bring to your clients’ lives. After all, if you aren’t adding value to their lives, then you aren’t fulfilling your purpose of being an adviser. It’s about knowing your self-worth and charging your client according to your self-worth.

How do you unlock the value of your advice?

When preparing for difficult conversations, focus on the value of your advice. Think about your relationship with the client over the last few years. Where have they come from, and what challenges have they faced?  How has your advice helped them through these difficult challenges?

It’s about making the intangible tangible. If you can understand your clients’ hopes, fears, and dreams (intangible) and build your service around realising these hopes, fears, and dreams (tangible), your client will resonate with your advice and see immediate value in your fee.

Again, if you can’t pinpoint key challenges you have helped your client through, maybe you could focus your time on helping other people through difficult times who will value your service.

Don’t fear clients saying no. It’s not a reflection of your service. It’s a reflection on the impact you can have on your clients’ lives.