OT: Quoting Prices

[geekgirldany]

Over the years in my business I have always quoted a price on preparing tax returns with a cushion for extra forms. The past two years I have really been under quoting.

How do you handle calls or meetings where they ask for a price upfront? Seems like I lose clients if I do not give an idea on pricing.

[JohnH]

I'm glad to give them a range based on the info they give me. I also tell them that if something unexpected arises, I'll let them know if their fee is going to exceed my estimate. I've very seldom found that to be the case, and in the few situations it did happen, I just stuck with the high-side estimate.

[geekgirldany]

Thanks John for posting.

I believe what I need to do is print out a price list. I have most of the forms memorized but sometimes forget a few.
From now on I will call before I print to tell them the price as to not waste anymore of my time.

[S T]

Some experience with this - they find us through websites, freebie listing in phone book, or some other source and they have already phoned a lot of other places - so they are looking for the cheapest and the fastest - NOT the BEST!

I don't advertise - just a few Association listings and the rest are a "referral" -

Don't be dismayed about not capturing that phone in call that is price checking - I think in the years I have been preparing taxes I have only maybe captured less than a dozen of those clients

Sandy

[Traveling EA]

Quoting prices

I, like Sandy do not quote prices over the phone. The people asking for prices are shopping for the best possible deal they can find. I would prefer long term clients that are not going to leave since John Smith down the road is charging $10 less to get the return. I also do not advertise, but get clients through word of mouth, or referrals. Every year, I pick up a few clients - generally 10% or so through referrals, or people I have met and talked to.

[Jiggers]

Someone else once said that giving a quote for tax return preparation over the telephone is like giving a haircut over the telephone.

[BP.]

Ask up front if they are price shopping. Ask for a range of prices they have received. Ask if they have other considerations besides price. Why are they switching preparers? You want to avoid the price shoppers. If we build up some rapport over the phone, and I get enough info, I might consider giving an estimated range, only IF it seems like I want to work with the person. Try and take the focus off price. Or cut the shopper loose and don't waste your time. I avoid giving prices over the phone, and tell people how impossible that is. Don't be afraid of not being the lowest! Don't compete on price. Take the good advice already posted to your thread.

[JoshinNC]

I tell every new client

bring me last year's tax return. I will tell you what I would have charged to prepare that return, assuming there was no bookkeeping, research or IRS consultation necessary. If this year is similar, expect a similar fee. If it's not, expect something different. Do you have some differences you would like me to quote for you while we are sitting here? No? Great! Let's get started.

[Black Bart]

Someone else once said that giving a quote for tax return preparation over the telephone is like giving a haircut over the telephone.

That was our own esteemed colleague, the sage of the savannah , one JohnH.

[RitaB]

Someone else said

Someone else said, "Sometimes people just don't know how to start the conversation, and all they can come up with is 'how much do you charge?'". I have thought about that a lot. I try to ask all the right questions so I get an idea of what I would charge, and stlll dodge answering. Let's face it, people really are clueless for the most part, and surprises are common when they get here.

I had a client come in to tell me that his mother was 91, does she still have to file? (See, they think 91 is relevant and there is a cut-off age.)

Me: Tell me about her income.

Sonny Boy: All she has is SS benefits.

Me: Then, no she would not be required to file.

Then, he whips out a 1099-R with Dear Ole Mom's $54,000 taxable withdrawal. That's a game changer, right there. Pretty sure.

[Lion]

I do pretty much what Josh does. I offer a quote on last year's return if they will bring it to me, plus any new situations they have. I still make it clear that it is a starting price and still give them a range from that price up a $100 or more to give myself a cushion.

If they are price shopping, I have a good colleague who uses less expensive software than I do and who prices to be below her local HRB to whom I refer such callers.

[taxxcpa]

I usually tell price-shoppers that most returns are between $100 and $500.

[MRPLOW]

Take the focus off the price, many people ask price because they don't know what else to ask, like was previously said.

After they ask the price, immediately give them your 60 second sales pitch about yourself and the service that you offer.
Try to find out why they need a new tax preparer...
After all this I then tell them that in terms of fee's, the basic 1040 Federal & State return starts at about $150 and goes up from there depending on the complexity and time required.

Work on your 60 second sales pitch, this is very important!

[JohnH]

OK, how about this for my 60-second pitch (also known as the "elevator speech"):

"Buying quality is like buying oats.
For a fair price I can provide you with good quality oats.

On the other hand;
if price is all you're concerned about,
then you can go down the street,
spend a little less money,
and get oats that have already been through the horse."

[geekgirldany]

Well that is pretty good John

Thank you all for posting. I like the bring in the last year return to review in regards to pricing.

I am really trying to get away from those that are only concerned about pricing. It seems like most of the time they end up being the worse clients.

I've never been good at marketing. I've been blessed that I've got new customers from my yard sign and the biggie referrals.
I am starting a new coaching program that is geared towards accountants to show them how to market their services. Hopefully this will help me build up my clients and increase my net income.

It has been 13 years since I started my business and I really should be netting more. It is my fault because of how I have priced but things have to change.

Thanks again