The case for productizing your firm’s client accounting services

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Last Updated September 2, 2023


This blog is part of the August Thought Leader newsletter.

Darren Root headshot and byline

As Rootworks members know, Smart Client Management is a topic I talk about frequently. However, if you’re a new Thought Leader subscriber, you may not be familiar with the concept. (The article I’ve linked above is a good introduction, if you’d like to check it out before you read on.)

There’s one aspect of Smart Client Management, in particular, that I want to touch on this month. It’s mentioned briefly in this section of the article, which covers the three key areas of the modern business model: Who you want to sell to, what you want to sell and how you want to deliver your products.

In this column, I’ll talk about why—once you’ve figured out which services it makes sense to provide—you should develop those services into “off-the-shelf” products you can use for all your clients. In other words, let’s talk about pricing and packaging.

One of your most important jobs

Traditionally, the path to growth has been about adding more customers. Today, it’s about maximizing the customer base you have by holistically serving them, understanding the science of pricing and packaging so you can bring all the pieces together—and doing it all with confidence.

That’s why pricing and packaging may be one of the most important responsibilities you have as a firm leader—because if you don’t do it really well, you could be leaving a lot on the table. Let’s look at some reasons why it’s so important:

  • Business models are changing in the profession. We’re moving toward value-based pricing rather than hourly billing. You’ll have a competitive advantage over firms that are slow to respond to market changes and client preferences.
  • By pricing and packaging your own offerings, your firm can tailor its products and services to address the specific needs and requirements of your ideal clients—a sure recipe for higher client satisfaction and loyalty.
  • Firms that package and pre-price their services can more effectively communicate the value they provide and align their pricing with the benefits and outcomes for their clients.
  • Clear pricing and packaging structures make it easier for your clients to understand the options and costs of your services, so they can make informed decisions.
  • Defining your own standardized service packages gives you the power to create scalable models that will accommodate future growth. You can also easily replicate or modify the packages to serve a more diverse client base.
  • When you have control over your pricing and packaging, you can adapt quickly to market changes, introduce new products, experiment with pricing strategies, test new service bundles or introduce tiers to cater to different client segments.

Of course, you’ll still need to consider industry norms, market demand and how clients perceive the value of your products so you’re sure your pricing is competitive and fair.

Pricing and packaging in action

Like any smart firm owner, you’re probably wondering: If you do put in the effort of productizing your client accounting and tax services, what would the impact be? How would it help your firm grow?

To help you envision what’s possible, here are two powerful examples of the results two of our member firms had after working with their Rootworks coaches to productize their client accounting services.

Firm A

This now-$2.5 million firm combined the knowledge from their coach with a laser focus to intentionally grow their monthly recurring revenue from a nominal amount to over $71,000 in 18 months. They didn’t stop there, though. They kept their focus, kept refining and kept their momentum. The firm now brings in well over $120,000 in monthly recurring revenue—and $1.44 million in annual recurring revenue.

Firm B

This $7 million firm used the knowledge they gained from their coach to create three tiers for their 1040 clients:

  • Tier 1, the simplest and least expensive tier, was all-digital, with no personal consultations—just online transactions.
  • Tier 2, the mid-level tier, offered some digital transactions plus a limited amount of personal contact with the firm and some premium benefits.
  • Tier 3, the highest level of service, provided virtual meetings, rapid response to all client queries and a number of other premium benefits.

All the firm did was sell the tiers to their existing client base; clients selected the tiers on their own. Somewhat to their surprise, Tiers 2 and 3 turned out to be the most popular choices. But clients were fine with the higher fee, because they felt they were getting a better product. And the firm employees continued to do the same amount of work they were doing before. Bottom line? The firm increased fees by over 10% and, over time, has increased its monthly recurring revenue by $750,000—just from a well-thought-out pricing and packaging strategy.

Summing it all up

The firms above are fantastic examples of not only Smart Client Management at work, but of the incredible power of having enough confidence in your firm’s services to turn them into viable, scalable “off-the-shelf” products that are repeatable across clients. And that doesn’t just apply to 1040s; the packages that can be created for your firm are only limited by the number of services you offer and your knowledge of the firm’s clientele.

This is such an important topic for firms that we’ll have two different sessions on packaging and pricing at the Inspire conference in November. So, Rootworks members, whether you’ve registered yet or not, keep checking with us as the full agenda takes shape for all the details. (In the meantime, log in and do a search on “productizing” in the Learning Center for available resources.)

I won’t say that pricing and packaging doesn’t take some time and effort; it does. But the rewards of offering your ideal services, in manageable packages, to your ideal clients—making life easier for both the clients and your team—are worth the effort. Ask any of the Rootworks member firms who have taken that step; I’m positive they’ll agree that they would never go back to the world of hourly billing and non-ideal clients again.

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