Fear is a powerful emotion, one that can stop us in our tracks and prevent us from growing and moving forward. In the case of value pricing for accountants, it is particularly the fear of the unknown and of venturing outside of our comfort zones that can make our firm’s become stagnant. To help you tackle fear head-on so that you can move your business forward, this article explains how fear manifests itself and how that can be very different from reality.
The amygdala is a funny thing...
Have you ever felt afraid?
Ever doubted yourself?
Have you ever avoided doing something even though you know it’s of high value because it’s too difficult or too much work?
If you answered yes to one or all of these questions, then you have felt fear. Fear that is all down to one small area in your brain called the Amygdala.
As the Amygdala plays a key role in memory, decision-making and emotional responses, it receives direct input from your senses and elicits a quick and automatic response largely based on intuition and experience. You may have heard of the fight or flight response, i.e. the automatic response that the body has to a threat. The Amygdala has a huge part to play in this response to fear as it:
- Always looks out for the unfamiliar and for threats
- Becomes hyper-focused on the threat (e.g. fear, uncertainty or doubt)
- Elicits a physical and emotional response to the threat
- Relaxes only once it’s satisfied that you are safe and there is no threat
While rapidly assessing situations for danger and attributing fear to experiences you have had previously is a great protection response, it can sometimes have an adverse effect. This is because the Amygdala initially sees anything that is unfamiliar as a threat.
Fear often doesn’t reflect reality
When it comes to value pricing for accountants, the fear of doing things differently (even if it could mean growth for your firm) tends to hold you back. It may feel safe and right to remain as you are but this is just the Amygdala eliciting the fear response to try and get you to stay in your comfort zone; to do things the way you’ve always done. While this may feel like protection, it is in these instances where fear stops you from moving forward.(Read: What Neuroscience Says About How People Buy Accountancy Services)
To show you how fear can prevent you from growing, here are the most common fears when it comes to value pricing for accountants and how this differs from reality:
- Fear: We will become too expensive and shut off our stream of new client work.
Reality: Your firm’s new fee structure is likely to persuade the very Prospects you don’t want as clients to not get in contact. As long as your firm is still delivering a valuable service in the mind of your Clients then you can raise your fees.
- Fear: We will lose too many of our existing Clients if we put up our fees.
Reality: Your firm will lose a few Clients when it increases its fees. However, these are often the Clients your firm wants to lose. The gains in revenue, profit and extra capacity your firm will make will easily offset the losses from Clients leaving.
- Fear: Implementing a fee increase will be commercial suicide.
Reality: Staying where your firm is right now with too many low fee, low recovery type clients IS probably a slow way to commit commercial suicide. Most small accountancy firms, with the benefit of hindsight, always wish they had put up their fees earlier.
You'll never know if you don't ask (and asking gets easier)
- Fear: Our clients don’t want to go onto Direct Debit/move onto a new accounting platform/pay in instalments etc.
Reality: Until you have asked Clients and given them no option but to make the change, you don't actually know if your Clients will change. If you make the change the easiest option, e.g. by putting in place a big fee increase for non-compliance, most Clients will agree.
- Fear: I’m not good at difficult conversations around fees. Our Clients will just push back against the fee increase.
Reality: After the first few conversations about fee increases, it gets much easier. Most Clients don’t push back against the fee increase. In fact, some Clients may actually know they are paying too little and will be expecting a fee increase. (Learn how to train your clients to expect regular fee increases!)
Do you see how your fear response is holding you back? Do you see how uncertainty and doubt can prevent you and your firm from growing?
To charge what you and your firm are worth, you need to recode your response to fear. First, you need to get comfortable with the fact that fear is a natural reaction your brain has to anything unfamiliar or unknown. Then, you need to welcome the feeling of fear.
Fear is actually a cue that you are going in the right direction and need to carry on and face the fear head-on. If you let the fear win and keep your firm doing what it has always done in relation to pricing, then you will never be able to price what you are worth. When it comes to your firm’s pricing you have to feel the fear and do it anyway.
Know your "why"
Pushing through your fear and venturing out of your comfort zone isn’t an easy feat but if you know your why for doing so, it quickly becomes achievable. In simple terms, having a strong why (i.e. knowing exactly what your driving force is to sort out the pricing for your firm) is a strong motivator.
Only when the personal benefit of addressing your firm’s pricing outweighs the perceived personal cost, e.g. having difficult conversations or possibly losing clients, will you sort out your pricing and fee levels. This is why it is so essential to identify your why!
The most effective strong whys are where there is a strong personal reason. These are real examples of where understanding their real "why" helped our club members finally, often after much procrastination, address the prices of their firm:
- To increase their GRF to get a much better sale value for their practice, in order to fund their retirement
- To be able to afford and be able to secure the mortgage for their dream house
- Stop their partner nagging them and buy their own place rather than rely on rented accommodation
- To be able to afford to take the whole family for a week’s activity holiday
Feel the fear and do it anyway
In the case of value pricing for accountants, it is the fear of the unknown and of venturing outside of our comfort zones that can make our firm’s become stagnant. Hopefully, now that you know how fear manifests itself and that it often doesn’t reflect reality, you can recode your fear and push through it to move your business forward. To do this effectively, think about your personal why as this can be a far more powerful tool than your Amygdala for overcoming potential threats.
Learn more about value-based pricing for accountants by reading the first 4 chapters of our new book “Profitable Pricing for Accountants” for free here!