Raising prices and/or losing clients

[BLACK BART]

I was just wondering how often others here raised their fees.  And by how much - flat dollar amount, a certain percent, or determined how?

I usually go up $20 every two to three years if they have the same stuff as past years; $35 to $50 if some added forms (not major) are necessary. This method used to work well - I'd raise the fee, 20 to 40 clients would quit, increased fees covered the loss, I'd work less.  But as I've aged, the herd has thinned (death, retirement, increased filing ceilings) and isn't being replaced as in the old days.  Clients used to bring their kids, but now they're on TT - it's rare to land a millennial.  While not a problem for those servicing the (upper) carriage trade; many mom-and-pop shops are serving middle-aged factory guys, and (increasingly) the elderly with interest, rent, and SS; so it's getting to be thin gruel for those fighting Block, J-H, and TT for the scraps.

Just culled/burned the old files and looks like I dropped about 15 this time.  AR may not be #1 in the nickel-nursers race, but we're definitely in the running.  Had a client for ten years and after three seasons at $75, raised him to $95 -- he's gone with the wind and (apparently) hurt feelings.  Another casualty was a good, many-years $250-$350 case (client said daughter was fixing it). Checked around - found out, sure-enough, the mythological (I thought) barber-beautician home of deep tax lore actually exists (the kid's a hairdresser by day and Super-Preparer by night).

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After crosses and losses, men grow humbler and wiser.   ----  FRANKLIN  

[Lee B]

My state, Oregon has had mandatory licensing/testing since 1973, and now the number of licensed preparers has been declining has for the last 3 or 4 years.

Other than a few part time preparers working out of their home, fees in Oregon are high enough that most preparers feel like they are fairly compensated.

Preparers that want to work tax season only are in high demand !

There was another thread last week where some posters were bitching about state licensing, yada, yada.

The higher the entry barrier, the more money you make, so I have no problem with state licensing.

The same barriers exist for attorneys, architects, cpas, engineers, doctors, dentists and etc.

 

[Jack from Ohio]

Double your price.

Lose half your clients.

Earn the same amount of money doing half as much work.

[Possi]

I raise my prices a little every year, on most clients. I usually keep the simple returns pretty cheap, or I lose the easy money. The more detailed returns always go up every year. It's better than skipping a year or 2 then hitting them noticeably hard.

All prices go up. Social Security benefits are the only thing that remains the same. So, my prices increase.  

[Lynn EA USTCP in Louisiana]

I follow pretty much the same system as Possi on raising prices.  Several years ago one lady left over a $5 increase - oh well.  But each year I increase my fees by roughly 5%, except for the simplest of returns or those who I feel have already maxed out their fee based on the return.

 

[FDNY]

16 hours ago, Jack from Ohio said:

Double your price.

Lose half your clients.

Earn the same amount of money doing half as much work.

I assume you are joking, although your math is correct proving the most basic of economic laws.  But our clients are people that we know to be good, bad, and ugly so a blanket across the board large increase  would not be appropriate in our business.  I do small increases for the good, more for the bad , and large increases for the ugly, hoping they will leave.

[Roberts]

It depends upon the client but all things equal, the rate goes up a little every year for most.

the really high paying clients - I'm actually fine keeping it where it is since they are so high above my normal rate.

Some clients as they get older actually get far easier returns so I don't raise.

Really poor clients (I have a few) I'm fine charging a small fee. Consider it a karma investment.

[SaraEA]

And then there are the clients who come in with their check already made out for the same amount they paid last year.

[BLACK BART]

On ‎6‎/‎27‎/‎2017 at 2:01 PM, FDNY said:

...our clients are...good, bad, and ugly...small increases for the good, more for the bad , and large...for the ugly...

How much for the so-so?

[FDNY]

54 minutes ago, BLACK BART said:

How much for the so-so?

While these clients are not very good, or not very bad, with some good qualities and some bad, I would have to say a so-so increase would be appropriate. 

[BLACK BART]

1 hour ago, FDNY said:

While these clients are not very good, or not very bad, with some good qualities and some bad, I would have to say a so-so increase would be appropriate. 

https://en.wiktionary.org/wiki/comme_ci_comme_ça

[FDNY]

18 hours ago, BLACK BART said:

https://en.wiktionary.org/wiki/comme_ci_comme_ça

A little French never hurt anyone! 

[BHoffman]

It is easier to discount than to raise prices.  I set my fee per form at the worst case scenario and then discount.  I have some real PITA clients and charge them a semi-high flat rate every year.  I usually charge new clients a little higher than average and then start discounting if they are organized, timely, responsive to questions, etc.