How to Turn Free Advice Into Profitable Engagements

By William Hamilton

Founder, SmartPath.co

You’ve had this client for years. You like working with them.  

They need help with questions about tax planning, managing their business, and whatever else pops up throughout the year. 

You’re billing them for their return and some accounting cleanup work, but you’re not getting paid for all the other help, conversations, and valuable knowledge you sharing…

How can convert this good client into a fair-margin advisory engagement that actually pays you for what have just been giving away for free?

It’s possible if you follow the right process.

We work with hundreds of firms annually that are giving away too much free time, energy, and strategic planning. 

Everyone says to “charge more,” but they don’t give you the tools for how to do it.

Here’s a simple 5-step process you can follow:

  1. Schedule a Progress Meeting
  2. Define the New Engagement
  3. Calculate New Fees
  4. Offer Engagement Upgrade Options
  5. Create a Quick Question Back-Stop

When you implement these steps in the right order, you can capture $1,000’s in lost revenue leaking out of your firm.

1. Schedule a Progress Meeting

Everyone has a specific area they want to make progress in their life, business, or finances.
That specific area is their true motivation. 

If you want to start charging for something they may have received for free in the past, you must tie your new engagement to a specific piece of progress that aligns with their goals over the next 12-month period.
Here are some examples of progress and the services that you could offer to help:

“This year I really want to”…

  • Open a new location in my business =
    (labor cost planning & cash flow planning to support the business growth)
  • Hire another employee =
    (cash flow planning)
  • Buy a rental property =
    (tax planning, asset depreciation analysis, cash flow analysis)
  • Start saving more for retirement =
    (tax planning and cash flow planning)
  • Getting my business ready for sale =
    (business financial analysis, legacy planning, tax planning)

The potential scenarios are endless, but no matter what the client tells you, there are parts of the puzzle you can usually help with.

Most firm owners skip this step of defining progress or don’t even realize it needs to happen. 
But this is the secret sauce.
Once you identify the client’s true motivation, the rest of the process becomes much easier

2. Define a New Engagement

Chances are, if you’re giving away free planning, you’re currently working with the client on a “reactive” basis. 

You’re reacting to whatever the client is throwing on your desk. 

Clients aren’t tax and accounting professionals. They don’t know what “asks” are complex or important to solve in a specific order vs. what is simple and doesn’t carry any complication, so it should be a quick task.
As a tax professional, your responsibility is to guide your clients from a “reactive” model, where you respond to a barrage of requests, to a proactive model. In this proactive model, you lead them toward a well-defined goal. 

The proactive client model allows you to:

  • Boost holistic outcomes because you’re looking at the client’s full situation before making a recommendation.
  • Decrease the time it takes to provide solutions because you can schedule and prioritize work throughout the year.
  • Minimize their tax bill by having a deeper view of all the moving parts in their business and/or financial world. 

This type of proactive relationship may “look or feel” similar from the outside, but when you look deeper at the results you can create in their life or business, the outcomes are very different. 

So, in fact, you’re not giving the client the same thing as they were paying for before. 

You’re giving them something much more valuable – specific progress on the outcomes they care about most.

And for that increase in value, you deserve to be compensated.
The right clients will happily pay because they’ll recognize the difference.

You define this difference through educational materials and conversations.

If we don’t educate the client, they will want to default back to the way things always were.

3. Calculate New Fees

Now that we know the client’s true motivation and the client sees the value in working proactively rather than reactively throughout the year, we need to understand how much to charge for this new relationship.

Here’s our pricing formula we recommend that we’ve perfected working with over 1,600 firms. 

Calculate:

  • Costs | Hard costs for this specific client. Unique software, unique staff required, etc.
  • Services | What services does this client need to achieve their defined progress? What traditional services may you want to include to give them a “bundled” value price that includes everything they need in one simple fee?
  • Value Margin | What do you want your true profit to be above and beyond your time and costs? 

Avoid tying the different fees in your options to the amount of activity.

Example: Number of phone calls or meetings. The value of your different options should be based on the outcomes you can help the client achieve.
Example:

  • Option 1 – Includes Tax Prep but not Tax Planning ($)
    • Expert Tax Prep is included
    • The outcome of lowering your taxes isn’t 
  • Option 2 – Includes Tax Prep and Tax Planning ($$$)
    • Expert Tax Prep is included
    • Plus, you get the outcome of potentially lowering your taxes by $1,000’s

It doesn’t matter how many phone calls or meetings you have. The right client wants the outcome in option 2 and will be willing to pay for it. 

4. Offer Engagement Upgrade Options

Clients can’t pay more unless we offer a new engagement. We now know what the new fee should be, we need to offer them an option to upgrade.

This can be done in a meeting or via email (as long as you haven’t skipped the first step of defining the progress they want.

Data shows that giving the client at least 2 options, and in some cases, 3, will increase their chances of picking a new option.

One of the options can always be close to what they were getting before, as long as it has a high enough margin to make sense for you (you don’t want to lose twice by not increasing their fee enough to make it worth it).

5. Create a Quick Question Back-Stop

Be sure to document your new options for each client so you can record what was included in each option.

If the client declines the upgrade and comes back later with a “quick question,” you can show them their options again and let them know they can upgrade now or pay separately for this help.

As long as we’re giving clients options that they can choose on their own, you don’t have to feel like the “villain” in the story. 

The client can self-select whatever option they choose is best for them.

But if we don’t document the options and keep them ready, it’s easy to back-slide into doing the work for free if the client doesn’t upgrade during your first offer.

Next Steps

The right clients will be happy to help make progress on the things they truly care about. 

You deserve to be fairly paid for your role in that progress.

Follow these steps and create a simple process for handling the planning and tax advisory work you’ve been giving away, and you can unlock genuine revenue growth in your firm.