The Pricing Tactics I Actually Use in My Old Firm

Speaker A: Hey there, firm owners. I'm Ryan Lozanis and you're listening to the Future Firm Accounting Podcast, the place where you'll get one practical lesson each episode to help you unlock freedom and growth in your firm. Thanks for tuning in today. I want to talk about something I've been genuinely fascinated by for years and and that's the psychology of pricing. Not just how to set your prices, but how the way you present a price can meaningfully affect whether a prospect says yes or no, and how much they're willing to pay. This stuff is grounded in real research on how the brain works, and once you understand it, you start seeing these principles everywhere. Not just in accounting, but in every industry that sells anything. I first got deep into this topic through the work of Nick Kollenda, a consumer psychologist who has written extensively on pricing psychology. His book and online guides lay out dozens of tactics, all backed by actual studies, and I genuinely recommend checking out his work if this topic interests you. What struck me reading through it was how much of this applies directly to how accounting firms present proposals, and how few firms are actually thinking about any of it. What a lot of firms do instead is look at what the average pricing is in their area or niche and then try to come in a little lower, thinking that'll help them win business. And in my view, that's a big mistake, because all that does is attract price shoppers, the exact kind of clients you don't want. There's a much better way to approach it. What I want to do today is walk you through eight specific tactics from this space that I personally use or have used when it comes to pricing my own services. These aren't abstract theories, they're practical things you can apply directly to how you structure and present your proposals. Let's get into it. The first tactic is three tiered pricing. And I know, I know if you've been following my content for any length of time, you've probably heard me talk about this before. I sound like a broken record on this one, but there's a reason I keep coming back to it, and that's because it works. It worked when I was running Zen Accounting. It works for the members inside Future Firm Accelerate and pricing is honestly one of those topics that comes up constantly in my coaching work. I I've run dedicated workshops on it entire AMA calls focused on nothing but pricing questions because it's something that genuinely puzzles a lot of firm owners and the stakes are high when you get it wrong. So bear with me if this feels familiar, because the details matter. Three tiered pricing is exactly what it sounds like. Rather than presenting a single price to a prospect, you present three options, typically a base, a mid tier and and a premium. This works because of a well documented behavior called the compromise effect. Research consistently shows that when people are presented with three options, they tend to gravitate toward the middle one. Nobody wants to feel like they're buying the cheapest thing available, and most people aren't ready to jump straight to the premium. Without more context, the middle feels safe, considered reasonable. What that means for you is that you can actually design your packages with this tendency in mind. Build your mid tier as your target, price it at a margin you're genuinely happy with, load it with features that make it feel like the obvious sensible choice, and structure the other two tiers to frame it well, which leads naturally into the second tactic. The second tactic is price anchoring, and it works hand in hand with three tiered pricing. It's based on the idea that the first number a prospect sees sets a mental reference point and an anchor that colors how they evaluate every other number after it. So rather than presenting your options from cheapest to most expensive, which feels intuitive, you actually want to lead with your most expensive option first. When a prospect's first impression is your premium price, everything else you show them looks cheaper by comparison. That initial sticker shock is intentional. It recalibrates their sense of what's reasonable. By the time they get to your mid tier, it genuinely feels accessible relative to what they just saw. Price anchoring only works when there's a meaningful gap between your top tier and the others. Which brings me to the third tactic. The third tactic is deliberately engineering the gap between your tiers. Specifically, you want a wide gap between your premium and mid tier and a narrower gap between your mid tier and base. This amplifies the anchoring effect and makes the middle option feel like the smart move. You're not forcing anyone's hand, but you're creating a structure where choosing the mid tier is the path of least resistance. I also like to hold back certain key features from the base tier and only include them in the mid, which adds another reason to move up without it feeling pushy. The fourth tactic is something I feel strongly about and that I think a lot of firms get bundling everything into a single price. Some pricing approaches out there recommend itemizing every individual service. A separate price for bookkeeping, a separate price for tax prep, a separate price for financial statements, and so on. I don't subscribe to that approach at all. My view is that every additional price you show a prospect creates a separate decision point, and every decision point adds friction. The whole goal of a good sales process is to reduce friction, not add it. When you bundle everything into one number, you're making it as easy as possible for the prospect to say yes. You're saying, here are all your needs. Here's one solution, here's one price. Clean, simple and easy. To say yes to one price for the whole solution is almost always the right move. The fifth tactic comes directly from Kalenda's research, and it's one that sounds almost too simple to matter until you actually understand the psychology behind it. Remove the dollar sign and the commas from your prices. Studies show that the more characters a price contains, the larger and more expensive that number feels to the brain. It's a visual fluency effect. More characters means more processing effort, and more processing effort gets subconsciously associated with a bigger, heavier number. Kolenda's research goes even further on this, and here's something that really surprised me when I first came across the number of syllables in a price affects how expensive, even when you're just reading it silently. Our brains process written numbers phonetically, even when we don't say them out loud. So A price of $1,499 takes more mental effort to process than 1,499, both visually and phonetically. The lighter and simpler you can make the number look and sound, the less friction the prospect feels when they see it. So if Your price is $7,000 a month, don't write $7,000, write 7,000. Remove the dollar sign, remove the comma. The number is identical, but it reads as lighter and less significant. For very large prices, you might keep one comma, but as a general rule, strip out every character you don't need. The sixth tactic is using non round numbers for custom pricing. And this one is about perceived precision. When you quote a prospect a round number like $3,000, there's a subtle but real risk that it feels arbitrary, like you just picked a number rather than calculating it. A non round number like 2740 or 2860 signals that some thought went into it that there was a process behind the figure. Calenda's research actually supports this. Precise numbers imply precision in the thinking behind them. Now, this applies specifically to custom value pricing, where you're quoting different amounts to different clients. If you have fixed pricing, like a program or a clearly advertised package or round numbers are completely fine because they signal confidence and clarity rather than arbitrariness. Know which context you're in and choose accordingly. The seventh tactic is a language one and it's small, but I think it matters more than people realize. Never refer to your price as a cost or a fee. I came across this idea through Ron Baker's work on pricing and value billing and it's stuck with me ever since. The words cost and fee carry a negative connotation. They frame what you're charging as a burden, something the client has to absorb. The word price is neutral. Some people go further and use investment, which has a positive framing, implying return and value. Personally, I land somewhere in the middle, but I'm consistent about avoiding cost and fee in any client facing communication. Words carry weight, and the ones you choose in client facing communication matter more than you think. The eighth tactic is one that ties everything together and and that I find particularly useful when managing capacity. Use your three tiered structure strategically to steer clients toward the engagement scope that actually works for your firm right now. If a prospect comes in with demands that would stretch your team thin, you don't have to say no. Instead, put those demands into the premium tier at a price that either compensates you properly for the added complexity or gently discourages the client from choosing it. What you're doing is showing them you've understood their needs. Nothing gets dismissed, but you're structuring the options so that the choice most clients make is also the one that works best for your capacity. It's a way of protecting your firm without ever having to have an awkward conversation about it. Now, these eight tactics are really just the beginning of what's possible when you start thinking seriously about pricing psychology. Calenda alone has documented dozens more and there's a whole body of research from behavioral economics that that applies directly to how accounting firms present and sell their services. If I had to distill it to one underlying principle, it would be this. Pricing is not just a number, it's a presentation. The same number can feel expensive or reasonable, depending entirely on how it's framed, what's around it, and the order in which things are revealed. Understanding that and designing your proposals with it in mind is one of the most high leverage things you can do to to improve your close rate and the revenue you generate per client. So take a look at your current proposal process, walk through it from the prospect's perspective and ask yourself honestly whether you're applying any of these principles or whether you're just putting a number on a page and hoping for the best. Hopefully that helps. And if you want more help, be sure to check out my future firm Accelerate Program. We'll help you unlock freedom and growth in your firm through proven systems, expert coaching, and a like minded community of hundreds of others just like you. Pricing is one of the areas we go deep on inside the program and the firms that get this right tend to see some of the most significant revenue improvements of anything we work on together. For more info, just head on over to www.futurefirmacccelerate.com so that's all for today. Hope you found today's episode helpful and I'll catch you in the next one. Take care.