I’m an Elton John fan.
Have been since about 1972 when he released Crocodile Rock.
In early 2020, Anna and I saw him live in Coffs Harbour.
I had bought front row seats for her birthday – Ok, really for me, as she isn’t as big a fan.
While the seats were ridiculously expensive, it was such a buzz in those front seats. It was one of my most exhilarating gigs.
NERVES
I used my Elton John Coffs Harbour concert experience the other day during a rowdy Price Committee meeting with one of my advisory team clients when my pricing recommendations were not being accepted by the advisory team I was working with.
“There is no way we can charge that much!”
“There really isn’t that much to do.”
“How can you justify a fee like that!”
“Not only would most of our clients be unable to afford that fee, I don’t think I’d be able to sleep if I was charging those loyal clients that amount of money”.
“Jim, some of these clients can’t even afford the cheap concert seats let alone the front row that you can afford!”
Wow. I’d hit a nerve.
In fact, the most productive and effective pricing conversations hit similar nerves.
The main emotion sparking pricing nerves is judgement.
Breaking down these overt (and covert) judgements can be tough.
Particularly when some of their judgements are part of the problem.
TOUGH JUDGEMENTS
“There isn’t that much to do”
Advisers naturally judge the ‘amount’ of advice work provided has bearing on the price. The more there is to do, the higher the fee.
That’s a fair judgement.
But is it the only judgement?
Increasingly clients can purchase different advice services elsewhere for a cheaper price. The significant difference is that purchasing elsewhere do not provide access to their existing advisory team.
When your pricing is judged solely upon ‘what’ is provided, pricing decisions end up discounting who is delivering it.
I could have purchased cheaper tickets to Elton John, but I would not have experienced him belting out the finale of Love Lies Bleeding pointing directly at us from six feet away. For a fan of fifty years that’s an incredibly valuable memory.
Busy teams consistently misjudge what value their long-serving clients will place and pay for access not to the cheapest, but the best team they know of.
That’s their existing advisory team.
The toughest pricing judgements are the invisible covert judgements advisers have used for years based upon ‘what’ they offer or ‘what compliance says can be charged’ rather than ‘why’ their clients engage and re-engage their advisory teams.
VALUE
Price is every advisory team’s best time management tool available.
As teams inevitably get busier and busier, misunderstanding the value of “access” and discounting services to the price of “what” is provided will increase the levels of activity while reducing productivity and effectiveness of service delivery for all clients and advisory team members.
Currently the Australian marketplace is under-going an extraordinary regeneration.
There are fewer advisers, greater uncertainty for clients, new demands from advisory teams seeking more workplace flexibility, institutions leaving advice, increased compliance, fewer candidates available to hire, and a regulatory environment without leadership.
This is not the time to get too busy.
Elton sang in front of about 10,000 people that night in Coffs Harbour.
Advisers don’t have a business model that allows them to advise in front of so many, unfortunately.
But they do have clients who value access to them and their teams.
Don’t underprice that access with judgements built for the distribution of products, not the distribution of valued relationships.
What do you reckon?
Photo credit: JJS_collection
ABOUT JIM STACKPOOL
For over 30 years, Jim has influenced, coached, and consulted advisory firms across Australia. His firm, Certainty Advice Group coaches, trains and is building a growing group of advisory firms delivering comprehensive, unconflicted advice, priced purely on value. The community of advisory firms aligns with Australia’s highest and only ACCC/IP Australia Certification Mark standard of comprehensive, unconflicted advice – Certainty Advice. He has authored four books regarding financial advice with his latest – What Price Value – available now in pre-release for launch in March 2022.