In a recent webinar, Sarah Bedford, Director at HMB Accountants, shared valuable insights into managing scope creep and repricing in accounting firms. Sarah’s firm, located in Teesside, Northeast England, has been dealing with repricing legacy clients—those long-term clients whose fees haven’t kept up with the services provided. Here are some key takeaways from her approach to addressing these challenges.
Key Takeaway #1: Acknowledging the Need for Repricing
Sarah emphasised that the need to reprice is something her firm has recognised for a long time. However, the challenge was not knowing how to reprice in a way that felt manageable and fair for both the firm and the clients. Initially, they experimented with a spreadsheet to calculate fees, but it wasn’t until they adopted GoProposal that they gained the confidence to apply consistent, structured pricing.
Tip: Implement a Pricing Tool to Remove Emotion
Using GoProposal or a similar pricing tool helped Sarah’s firm take the emotion out of pricing conversations. Instead of worrying about justifying their fees, they could show clients a structured, rational calculation that reflected the work being done.
Key Takeaway #2: Building Confidence with New Clients First
One of Sarah’s first steps was to test the new pricing structure with new clients. Since there was less risk with potential clients, this approach allowed her firm to fine-tune their pricing strategy and build confidence in the process. After seeing an 80-90% success rate with new clients, they transitioned to repricing legacy clients.
Tip: Start with New Clients
If you’re worried about how existing clients will react to higher prices, start by testing your pricing strategy on new clients. This allows you to get comfortable with your approach before having potentially more difficult conversations with long-term clients.
Key Takeaway #3: Tackle Difficult Conversations Gradually
Repricing legacy clients can be tough, especially if their fees have remained the same for many years while the scope of work has increased. Sarah’s team approached this gradually, focusing first on clients that were actually costing the firm money. These clients were easier to reprice because, as Sarah put it, “if they left, you were still better off.”
Tip: Reprice Loss-Making Clients First
Start with clients who are costing you money. These clients will provide the least resistance to repricing, and if they leave, your firm is financially better off.
Key Takeaway #4: Flexible Payment Plans to Ease Transitions
In some cases, repriced clients faced a significant jump in fees. To ease the transition, Sarah offered flexible payment plans. For example, one client faced a 40% increase in fees. Instead of demanding immediate payment, they moved the client to a monthly direct debit system, allowing them to spread the cost over time.
Tip: Offer Payment Flexibility
When clients face a large fee increase, offering the option to pay over a longer period can make the transition smoother and more palatable.
Key Takeaway #5: Addressing Scope Creep with Systems
Sarah and her team focus on helping clients understand that they can reduce their fees by improving their internal processes. For example, clients who present disorganised paperwork or manually process transactions often face higher fees. By suggesting tools like AutoEntry or encouraging clients to handle some tasks themselves, they can lower the price while maintaining the value of the service.
Tip: Use Scope Creep as an Opportunity to Improve Client Processes
Instead of simply increasing fees to address scope creep, look for ways to help clients streamline their processes. This not only justifies the price increase but also demonstrates your commitment to helping them run their business more efficiently.
Key Takeaway #6: Repricing is an Ongoing Process
Repricing isn’t something you do once and forget about. Sarah highlighted that her firm is still in the process of repricing legacy clients, and the work continues as they look for opportunities to provide additional value, such as offering management accounts or other services during pricing conversations.
Tip: Repricing is Continuous
Don’t see repricing as a one-time task. Build it into your client review process, and make sure you’re consistently evaluating whether the fees reflect the services being provided.
Key Takeaway #7: Dealing with Client Pushback
One of the challenges Sarah faced was losing clients to cheaper competitors. While this can be frustrating, Sarah noted that even clients who left because of price cuts remained on good terms and continued to reach out to her firm for advice. In some cases, they even acknowledged that they were getting what they paid for with the cheaper service.
Tip: Maintain Relationships with Clients Who Leave
Even if clients leave due to pricing, maintaining a good relationship ensures that they respect your work and may return in the future. Offering transparency and being open about the reasons for repricing can prevent hard feelings.
Key Takeaway #8: Present Pricing Conversations Within a Broader Business Review
Sarah doesn’t schedule meetings specifically for repricing. Instead, she integrates pricing conversations into broader discussions about the client’s business, growth plans, and data quality. By framing the conversation in terms of value and service improvements, clients are more receptive to the fee increases.
Tip: Don’t Make Repricing the Sole Focus of the Meeting
Embed repricing discussions within a broader conversation about the client’s business and the value you provide. This shifts the focus from the cost to the benefits they’re receiving.
Key Takeaway #9: Honesty and Transparency Work
When clients faced significant price increases, Sarah found that being honest about the reasons for repricing helped defuse tension. By admitting that the firm had undercharged in the past, she was able to reset expectations and maintain strong client relationships, even with those who chose to leave.
Tip: Be Honest and Transparent
When explaining price increases, admitting past mistakes in pricing can help clients understand why the change is necessary and prevent feelings of resentment.
Final Thoughts: Start Small and Build Confidence
Sarah’s approach to repricing shows that it doesn’t have to be a daunting task. By starting with new clients and focusing on loss-making legacy clients, you can build confidence in your process. Offering flexible payment terms and framing pricing discussions as part of a broader conversation about the client’s business can make repricing easier to handle, for both you and your clients.
Ready to Reprice?
If you’re facing scope creep and underpriced clients, don’t wait. Start small by repricing a handful of clients, and use a structured pricing tool to guide your conversations. Over time, you’ll find that repricing not only increases your firm’s profitability but also strengthens your relationships with clients.
To learn more about Sarah’s approach to repricing, watch the full session from Elevate Summit here.