Fee increases, less returns higher fees

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#51
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Excellent point Atsman! Thank you.
 

#52
zl28  
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This is an interesting case study; i wonder where you are located ie NYC, CA where $500 is not that high for a return or the suburbs or rural.

If someone went to raise my fee 35-50% for anything i definitely would not be happy.

Perhaps i would continue with them for the immediate future

but

I'd be on the lookout for a new provider of these services

unless

i knew i was being grossly undercharged in the first place.

I'd be interested to see your retention rate in year 2 with these increases.

Nevertheless, congrats on your high retention rate with this increase.
 

#53
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zl28 wrote:I'd be on the lookout for a new provider of these services

unless

i knew i was being grossly undercharged in the first place.


I'm interested to see if a practitioner can or will increase the level of service to each remaining client when making this shift. I think many of us would like to do more for each client or see that there is more to do for each client, if we just had the time. This is a fundamental shift that can dramatically increase the retention rate after a fee increase.
~Captcook
 

#54
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Excellent point on the last 2 posts, time will tell. I certainly feel having less clients will free up valuable time to give even better service.
 

#55
ATSMAN  
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We all should be reviewing our client base regularly to see who is a resource hog relative to the fees they pay for services. Just today I got rid of one client who was balking at paying additional fee for extra work. I was always weary of him but given that he was with me for over 5 years, I let things slide a little bit, until it got too much for me to bear.

So yes, less clients with a profitable margin will allow you to focus more on clients who may need more attention to be competitive. :D
 

#56
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I'm interested to see if a practitioner can or will increase the level of service to each remaining client when making this shift. I think many of us would like to do more for each client or see that there is more to do for each client, if we just had the time. This is a fundamental shift that can dramatically increase the retention rate after a fee increase.


Our retention rate definitely suffers because we only offer a narrow scope of bare bones services and because we will not spend much time with each client. But I'm not sure we are willing to change that anyway. I know that the time costs involved with new clients is a big one, but we can't seem to charge enough for the things we won't offer - and we don't like to do them. Besides, being narrow means more profits and less stress.

As far as discounts, if I provide them, I ask the client to keep their price private for the very reasons mentioned in this thread. It makes them feel even more special, which they must be anyway if I'm giving them a break in the first place. So it's not like I'm playing games.
 

#57
sappy02  
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smtcpa wrote:I've stopped taking "tax-return-only" clients this summer. I will be paring down my client list, moving more clients to tax prep during the summer, and taking on clients who need regular tax planning, business advisory, and - next year - personal financial planning and investment management.

CornerstoneCPA wrote:Have any of you considered subscription pricing models for tax returns? Provide all-inclusive services to clients willing to pay it, start weeding out lesser clients. Over time, idea is to eliminate all clients not willing to onboard under subscription fees. The firms I have seen utilizing it are thriving.

I am going to begin offering it in 2022 to determine level of interest vs. my other pricing structures, which are now hourly. I view it as a fantastic way of maintaining client quality while hedging against the few clients that would consume a lot of while (vs majority that would not).


Congrats on taking the plunge to a subscription-based model. Sounds like you are getting better quality clients this way. I am looking to transition to a similar model as I currently do a lot of tax-return-only clients. What resources do you like to use to improve your knowledge of tax planning, business advisory, personal financial planning and investment management?
 

#58
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I'm not dipping my toes into the investment management arena--not my cup of tea, regardless of potential earnings. I have started the route a couple of times and honestly decided I hate it. Instead, I promote that I can interface with all of a client's professionals to achieve their objectives. It's catching on with individuals, has always been a method for controllership clients but I never called it subscription pricing. It is why some small businesses pay me $50k/year--I work directly with their bankers, lawyers, etc., to make sure everything is carried out as needed.
 

#59
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This is an excellent topic. I’d like to contribute my 2 cents : This topic is an excellent discusión about one of the best tips I’ve ever heard - (to paraphrase loosely from “Gear up Seminar” as quoted by Spidell Tax Research is to fire 1/2 your clients , double fees , and you’ll be paid the same for 1/2 the work.

Also, that short letter from “ Itdepends” is EXCELLENT example of straightforward simplicity and conciseness. . As another poster stated “ MOST CLIENTS don’t care about our rising costs - compliance - software etc”

When we write sales or communication letters to clients , it’s vital to never underestimate lack of attention span and self—centric view of audience. THE KEY is to write for your intended audience and put yourself in reader’s shoes. Otherwise , any messages sent is a COMPLETE WASTE OF TIME. That last sentence is loosely paraphrased from Dale Carnegie “ How to win friends and influence people “
 

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