Are you still stuck with hourly billing? 

Brilliant bookkeepers and amazing accountants are all shifting to value-based pricing. 

And that means ditching the hourly billing for something that better serves your clients - and you! 

Getting Into Value-Based Pricing

As the former CEO of one of the largest tax and bookkeeping companies in the world (with nearly 4,000 offices!) it became clear to me there that value-based pricing was something we need to see more of in this industry. 

Ron Baker has been a proponent of this method for a long time, championing the simple idea that we should price our services based on the value they deliver, not the hours we track on a timesheet. Clients want clarity, predictability, and value, not surprise bills based on time spent. 

Value-based pricing is the way forward, putting the focus on results instead of hours.

One form of value-based pricing I’ve written about is menu pricing, and today we’ll be discussing another of my favorite pricing models, the 3-tiered pricing strategy.  

Value-based pricing provides a solid foundation for fixed and menu pricing models. 

Understanding the 3-Tiered Pricing Model

3-tiered pricing is exactly how it sounds - offering three options for clients to choose from, instead of hourly rates or extensive service options. At the core of the 3-tiered pricing model is the “Good, Better, Best” framework. It’s a strategy that’s as simple as it is effective. 

Here’s how it could apply to your business:

• Good: This is the entry-level package offering essential services. Think basic tax filings or monthly bookkeeping—just enough to cover the essentials but not much more.
  
• Better: The middle tier is where the magic happens. This option offers a more comprehensive suite of services, such as tax planning, quarterly reviews, and perhaps a bit of strategic advice. It’s the sweet spot where most clients find themselves.
  
• Best: The premium package pulls out all the stops—proactive tax strategies, detailed financial forecasting, and ongoing advisory services. It’s for clients who want maximum value and are willing to invest in a higher level of service. For some, this might mean faster response times to queries. 

The Psychology Behind 3-Tiered Pricing

Why does 3-tiered pricing work so well? 

It leverages client psychology, offering just enough choice to feel empowered but not overwhelmed. People tend to gravitate towards the middle option—the “Better” tier—because it strikes the perfect balance between value and cost. This makes it easier for you to guide clients towards the package that’s best suited for them, and often, it’s the one that brings in the most revenue.

Benefits of 3-Tiered Pricing for Bookkeepers and Accountants

Simplifies Pricing Conversations

With 3-tiered pricing, you’ll avoid those dreaded awkward conversations about billable hours. It simplifies your pricing structure and allows you to present clear, upfront options. Clients know exactly what they’re paying for, which eliminates confusion and builds trust.

Increases Revenue Potential

Clients tend to gravitate towards the mid-tier or even the premium package when given a choice. This means you’re likely to increase your overall revenue, as clients see the value in upgrading to a higher tier.

Improves Client Satisfaction

Offering clients a clear, customizable pricing structure leads to better satisfaction. They can choose the package that fits their needs and budget, which makes them feel more in control of the process. Happy clients are loyal clients!

Steps to Implement 3-Tiered Pricing in Your Bookkeeping & Accounting Practice

Guess what? Implementing 3-tiered pricing is as easy as 1-2-3! (Well, 1-2-3-4-5, if I’m being honest…) Here are the 5 steps to implementing this pricing structure, based on my years of experience putting these together with clients. 

Step 1: Evaluate and Categorize Your Service Offerings

First things first, take a look at all the services you offer. Organize them by value, from basic to premium. This could include everything from bookkeeping and payroll to tax preparation, financial planning, and advisory services. Once you’ve grouped your services, you’ll have a clear view of what belongs in each pricing tier.

Step 2: Define Each Tier

• Good Tier: This is your entry-level package, focused on basic compliance work like monthly bookkeeping or tax filings. It’s straightforward and essential but doesn’t include strategic guidance.
  
• Better Tier: This package steps it up by offering more value, such as quarterly reviews, tax planning, and financial strategy sessions. It provides more touchpoints and higher-level advice.
• Best Tier: For clients who want top-tier service, the premium package is all about proactive strategies. Think comprehensive advisory services, advanced financial forecasting, and ongoing, very personalized support.

Step 3: Price Each Tier Based on Value

Pricing is where the real transformation happens. Instead of basing your fees on time, focus on the value each tier provides to your clients. What results are they getting? How are your services helping them grow or save money? 

Use this as your pricing guide, and remember: clients are paying for outcomes, not hours.

Step 4: Communicate the Value to Clients

Make sure you can clearly explain the benefits of each tier to your clients. When they understand the value you bring, it makes the conversation about pricing much easier. Whether you’re creating proposals or discussing pricing during a meeting, lay out each option with a focus on results.

• When presenting 3-tiered pricing in a proposal, it’s helpful to visually lay out the options in a table format. This makes it easy for clients to see the differences between the tiers and choose the one that best fits their needs.
• Focus on the value of each tier, and the results. Put less emphasis on listing out every single service offering. 
• When discussing pricing options with clients, tie each tier to the results or outcomes that matter to the client. For example:
• “With our Good package, you’ll ensure that your financials stay compliant, you avoid common mistakes and pitfalls, and all tax filings are handled seamlessly. This is the no-frills solution for businesses that need the basics." 
• "In the Better package, we go beyond compliance and help you make smarter financial decisions with quarterly reviews and tax strategies. This helps you save more money and stay on top of your financial game year-round."
• "For our Best clients, we take a more hands-on approach, offering proactive advisory services and forecasting to help you not only stay compliant but also grow your business and maximize profitability."

Step 5: Offer Choice, But Guide the Decision

Clients love choice, but too many options can lead to indecision. With the 3-tiered model, you offer just the right amount of choice while gently guiding clients towards the middle tier, which is often the best value. It’s the pricing “sweet spot,” where clients feel like they’re getting the most bang for their buck.

Common Pitfalls to Avoid When Implementing 3-Tiered Pricing

Even the best pricing model can have potential pitfalls. Here are some I've seen over the years, and how you can avoid them.

• Overloading Tiers with Too Many Services: Keep your tiers simple. Clients don’t want to feel like they’re paying for extras they don’t need. Stick to essential, high-value services.
• Pricing Too Low or Too High: Avoid the trap of underpricing yourself. Be sure to price based on the value and results you’re delivering. Likewise, don’t overprice without backing it up with top-tier service.
• Failing to Articulate Value: Your clients need to understand the value they’re getting at each level. Make sure to clearly communicate the benefits and results that come with each package.

When clients have switched to their chosen plan, make sure you're delivering the value you committed to by having regular check-ins to understand how they’re feeling about your services. 

Embracing the Future of Bookkeeping & Accounting Pricing Models

It’s time to leave hourly billing behind and step into the future with 3-tiered pricing. 

I’ve seen so many of our Bookkeepers IGNITE members successfully implement these pricing structures, practices, which is why I wanted to share with you! 

This model not only simplifies your pricing structure but also enhances client relationships and boosts your revenue. By offering clients clear, tailored options, you empower them to choose the package that perfectly fits their needs and budgets—while positioning yourself as a modern, value-driven accounting pro who knows how to deliver results with style.

Take the first step by evaluating your current service offerings and start building your own “Good, Better, Best” pricing model today. Your clients—and your bottom line—will thank you!

Reach out to us if you have any questions!