Deeper Weekend 2014

Choose your favorite writer

  • Greg Kyte
    Greg Kyte
  • Jason Blumer
    Jason Blumer
  • Jon Lokhorst
    Jon Lokhorst
  • Melinda Guillemette
    Melinda Guillemette
  • Toni Cameron

How can you tell the difference between a firm that is only claiming expertise as an advisor and one that is truly the earned expert? It’s hard for the client to discern this difference from outside the firm, but there are some distinctives that can help identify those that are true experts.


Two distinctives can point to this reality: (1) the number of clients in the firm, and (2) the size of the firm’s invoices.


The Number of Clients

True expert firms can support a team, service, support, and quality control with just a handful of clients (e.g., a team of 12 to 15 can be supported by just 20 to 30 clients). The work is so deep that clients are paying at the level which allows just a few clients to support a fully committed team. While firms that need very large, broad pools of clients reflect the reality of clients paying smaller prices spread out over a volume of clients to make enough revenue to support the efforts of the firm (e.g., hundreds of clients). This large pool of clients creates voluminous movements in work, complex operational systems, fast work with the hands (not the mind) based on external deadlines (from compliance agencies), and not a lot of extreme profit.


The Size of Invoices

Secondly, the invoices of true expert firms will typically be in the 5 to 6 digit lengths per client (as measured on an annual basis) while non-expert firms (even if niching) typically create invoices in the range of 3 to 4 digits in length. This is truly anecdotal but one we have seen many times. Small invoices reflect transactional billing, while large invoices represent deep relationships that clients can’t find elsewhere. Advisory firms are demanding engagements and services in the $10,000 and higher levels (measured annually), while non-expertise firms sell services for $500 to $2,000 per transaction. As mentioned, the $10,000 represents a relationship (which commands higher prices), while the $500 represents a transaction (which anyone can deliver to the client).


To be clear, your goal as a firm owner shouldn’t be to reduce the number of clients in your firm, or to increase the size of your invoices. Both are good results if you are seeking to be an advisory firm. But these results are simply byproducts, or indicators that you are already differentiated as a firm. If you can support your team on a few clients, and tend to price with fewer invoices and larger amounts on the invoices, then it simply represents your recognition in the market you serve. These questions can help you know where you stand as an advisory firm:


Are our clients willing to pay a premium price for a specific service that few perform?


Are we known for a particular service that can generate above average prices simply because they can’t get it elsewhere?


Do the things we sell require us to devote a whole team to serve one client?


Does our sales process usually talk about transactions rather than value and relationships?


Jason is the Founder of Thriveal and the Chief Innovative Officer of his CPA firm, Blumer & Associates. He is the co-host of the Thrivecast and The Businessology Show and speaks and writes frequently for CPAs and creatives, his firm’s chosen niche. Jason loves to watch documentaries on just about anything. He lives in Greenville, SC with his wife and their three children.


CPA firm, Other Thoughts, Pricing
  • On 05-22-2019 at 1:16 pm, Oluwajuwon Awoniyi said:

    What do you advice for a firm that’s just coming up composed of experts in the field of administration willing to offer advice to firms and haven’t been able to attract clients.

  • On 06-01-2020 at 7:47 pm, Ben Burger said:

    Dear Jason, I attented your three part webnar series on advisory series by Intui and I really do resonate with your views and points on advisory services, but operating in an economic environment in South Africa that had been degraded by Moodies to rubbish status one seems to be resistant to your proposed price structure. Taking the Dollar/Rand exchange rate into consideration the proposed US per annum fee of $10 000 charge rate compares to more or less R15000 per month i.e. R180 000 per annum. In mainly serving SMME’s it is quite a challenge to convince clients to embark on the advisory route.

    Structuring marketing in order to convince clients to pay for advisory services in a third world rubbish economic environment will be quite a challnge.
    If the majority of your clients are older than 5 years and follow without exception your advice and methods it would may be worth the risk to just embark on the advisory route (Kindof : either or situation).
    Obviously one has to concentrate on marketing Advisory Services to new clients and for that the marketing strategy must be well thought and planned.

    Definately the way forward in the post Covid-19 area


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