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Access does not equal value

October 5, 2011 by Dale Furtwengler — President, Furtwengler & Associates, P.C.

A professional recently told me that he'd merged his firm with a larger firm. Then he went on to say that he'd sent his clients a letter stating that the fees they'd be paying would be 10 percent higher than they were prior to the merger. What was the rationale for this move?

These clients were told that they had access to a broader array of services than they'd had previously. Care to guess what kind of reaction he got?

His clients were incensed. Having access to more services doesn't mean that they need or want them so why should they pay more for the services they do value.

Let's be real: The acquiring firm has a fee structure higher than that of the firm they acquired and they wanted to have all of their clients on that same fee schedule. That's a worthy goal, but raising prices without adding value won't get you there. What should they have done?

They should have:

• Created bundles of offerings that incorporated some of the new services
• Sat down with each client and made them aware of those bundles
• Discern the client's interest in those bundles
• Priced the bundles to achieve the higher fee structure desired

Why would this have worked better? This approach:

• Offers clients a choice
• Identifies their interests
• Allows customization for those interests
• Demonstrates the value they'll receive
• Enhances the relationship

Were any of those accomplished with the tactic employed? Indeed, the opposite occurred. These clients:

• Didn't like having a new fee structure imposed upon them
• Became resistant to any new services
• Felt taken for granted or deemed unimportant to the firm
• Resented having to pay higher prices without any value being added
• Are likely to search for a new firm

Which result would you prefer? The next time you're in the mood to raise prices, make sure that you're demonstrating higher value in ways the customer/client appreciates. Remember, access does NOT equal value.

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