Why is Data Driven Pricing™ Needed?
Pricing accounting and bookkeeping services has always been hard, because clients are complex and there are so many unknown factors. Getting all the data you’d need to accurately inform that price would just take too long.
So what invariably happens is that a client paints the best case scenario, and it’s only when you get under the bonnet of that business that you realise what things are really like.
The client then requires more work than initially expected and it can be months or even years before you realise that you’re massively undercharging this client.
”Data Driven Pricing OMG! We use Xavier lots and to quote, we just won our biggest client through sending a health report from Xavier, now it’s all integrated with GoProposal ❤️😁👍 - Jeri WilliamsSmooth Accounting
But now let’s be honest with ourselves for a moment. How comfortable do you feel to then go back to that client and explain that they need to pay more, and why they need to pay more. How do you back it up? How do you justify it? What if a client objects?
So most firms take the hit, do the work and lose the money.
But this can’t continue. And so it was this pain point that sparked a conversation between Jonathan Gaunt and James Ashford, and that spark produced Data Driven Pricing.
What is Data Driven Pricing™ ?
Jonathan is just a brilliant thinker, in the way that is constructed his firm and with the value that he gives to his clients too. He’s been a user and advocate of GoProposal since day one.
Through everything he’s done at FD works, Jonathan then built Xavier to give him access to a far more valuable and useful set of data, that could be extracted from Xero.
”Wow! Well done team GP! I am really looking forward to rolling Data-Driven Pricing out for our proposal process! It is going to change our practice beyond belief. Hannah AdamsFreedom in Numbers
We use Xavier in our accounting firm, across all of our clients, using data extracted from Xero.
Jonathan and James Ashford were having a conversation about how amazing it would be if we could pull all the data from Xavier, into GoProposal, in real time.
To have everything there that we need, to be able to inform the price initially, then to carry out accurate fee reviews with our clients every time.
All client’s transaction volumes, their revenue, the quality of their bookkeeping. All there, in front of you during a proposal or fee review meeting.
It was this conversation that sparked the idea of Data Driven Pricing™. There’s no more guesswork. No more unknown. You can get your clients data in real time, whilst creating the proposal.
What DATA Does Data Driven Pricing™ Use?
By connecting GoProposal to Xavier, we can give you instant access to the following data sets…
Xavier calculates an overall score for a client to indicate the health of their books based on a series of Xavier metrics and bookkeeping best practices. The score is presented as a percentage, with a heart icon for traffic-light status. The health score is proportional to the size of the client.
The revenue for the last 12 months.
Current Run Rate
The run rate refers to the financial performance of the company, based on the current financial information as a predictor of future performance. We take last quarter’s revenue and multiply it by 4.
Monthly Sales Invoices
The number of sales invoices that are created in Xero.
Monthly Purchase Invoices
The number of purchase invoices that are created in Xero.
Monthly Credits Notes
The number of credit notes that are created in Xero – does not differentiate between sales and purchase invoices. Used as a guide for the amount of rework required.
The number of journals that are created in Xero.
Monthly Bank Transactions
The number of bank transactions, typically generated using create, bank rules and cash coding that are created in Xero.
Combines the count for Sales, Bills, Credits, Manual Journals and Bank Transactions, to provide a guide for activities such as VAT return volumes.
”At last the future is NOW!!! "In God We Trust... All Others Must Use Data" ~ W. Edwards Deming. The Godfather of Data may be smiling to see someone's heard. Everton WilsonEDVOCAP
Combines the VAT scheme and frequency – helping you to understand the complexity and regularity of the clients VAT returns.
VAT Period Start
In the same way that you have a catch-up on the annual tasks, for a new client you don’t want to be disadvantaged by not getting rewarded for that first VAT return.
The outstanding debtor balance at the end of the complete month.
Average Debtor Days
Average time to get paid between the invoice being issued and paid in full.
Shows the impact in cash of improving debtor days by a single day.
No. of Bank Accounts
The number of bank accounts in Xero.
No. of Manual Feeds
How many of the accounts included above are based on manual feeds where you have to upload statement lines.
This data can then be averaged out over the last 12 months of the last 3 months, depending on whether you’re using this data with new clients for an initial proposal or with an existing client’s renewal or fee review.
How Data Driven Pricing works within GoProposal.
This is how Data-Driven Pricing works in under 60 seconds.
”Mind. Blown. The realisation that this was the moment where the way we price changes forever has left me speechless. The impact this will have is off the scale - on another level! Well done team GP!
James MiddletonElevate Accounting
Watch the full Data Driven Pricing™ Training Event?
Jonathan and James streamed live into the GoProposal Community with this in-depth video training.
This will show you how the data from Xavier get’s pulled directly into GoProposal, how the integration should be used with your team and your clients, the nuances and objection handling.
Welcome to the new way of pricing and selling your services. Welcome to Data-Driven Pricing™.
”Hands down the best software I use being Xavier and GoProposal have now collaborated to produce Data-Driven Pricing....drop the mic! Huw MoseleyLink Accounting