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- What's Next For Accounting? - Issue #116
What's Next For Accounting? - Issue #116
📃 10 Tips To Optimize Your Renewals
This week I ran through my tippy top tips for renewal season. Nothing earth shattering but a lot of small things I got right & wrong over the years:
Note changes in scope throughout the year
If you don’t, you’ll forget about them and give away work.Involve the team in the renewal process
When I told the team to do #1 they had a hard time remembering. When they were the ones talking clients through renewals, they remembered.Include a list of changes in scope with the renewal proposal
If you don’t, they’ll forget about them and undervalue you.Include a summary of results you’ve achieved for them to-date with the renewal proposal
If you don’t, they’ll forget about them and undervalue you.Don’t forget about change in client company size
Too often we get a few years into an engagement, their business has quadrupled in size, but your fees have only gone up 20%. It’s probably not a linear relationship, but it should be a factor.Employ decoy pricing
I’m in favor of 3 options because people like feeling like they have a choice (and they probably should have a choice), but if I want them to choose the third option, I’m not going to price it $100 $200 $300, I’m going to price it $100 $275 $300.Stop worrying about clients leaving
If your firm runs a 40% margin, and you’re increasing prices 20%, it takes more than 33% of clients leaving before profit goes backwards. Imagine if you had a third less work to do and made the same money 🫠Renewals are an opportunity to add value & improve profitability
Leave it to the last minute and it’s going to feel like an administrative task.Incentivize clients to lean into new processes
When we transitioned several thousand annual engagements to an up-front model, we did this by telling them they could see the price they’d pay up-front by reviewing their proposal online. Dangling a carrot makes that new thing feel like less of a chore.When you’re making a pricing call the right answer is almost always the bigger one
Pick the bigger number and move on.
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📅 This Week
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😍From The Community
My private peer networking community Realize for firm leaders, now capped at 500 members.
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01/16 🧠 AMA with Ben Coons - Offshoring for CAS & Bookkeeping with Jason Staats
01/25 🌴 Take A Step Back with Geraldine Carter
01/29 🕸️ Into The Chadiverse with Chad Davis
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