If you’ve leafed through the pages of any upscale magazine – Forbes, Town & Country, Robb Report – you’ve come across an ad for Patek Phillipe watches. “You never really own a Patek Phillipe,” the ads crow from images of impossibly perfect families. “You merely take care of it for the next generation.” Patek Phillipe prices start in the neighborhood of a decent car – something you’d buy for the nanny to drive the kids to school. More typically, they run about the same as the nice Mercedes or Tesla you’d use to drive yourself to work. At auction, they sell for prices that would cover an impressive Manhattan townhouse.
So, what would you think if you heard that Patek had released an “application” watch? Would you assume that it meant “applying” some sort of enamel, or gilded coat, to the face, or the bezel, or one of the complications? Or would you guess what it really means is that you actually have to apply to the manufacturer to buy the watch in the first place? (Naturally, you’ll have already bought several of the Tesla-priced watches already. And there won’t be any bargaining over the price of the “application piece,” either.)
Patek isn’t even the most exclusive watchmaker in the market. Brands like Hemmerle, Viren Baghat, and Joel Arthur Rosenthal (the only living jeweler to have a solo show at the Metropolitan Museum of Art), you need a personal introduction to buy a piece. Roger W. Smith makes just a dozen watches a year. If you want one, you’ll need to pay a £3,000 deposit for the option to get on the waiting list. In a few years, you’ll get an email telling you you’re on the list. That email won’t tell you the price of the watch.
What does any of this have to do with marketing tax planning services. The point is, one of the best ways to motivate anyone to want something is to make it hard for them to get it – or suggest to them they can’t have it at all. That insight has driven creation of what business reporter Nelson Schwartz calls the “Velvet Rope Economy,” with vendors using inequality and prestige to drive high-margin sales in industries from luxury goods to personal services to even healthcare.
How can you put this to work for your practice? If you’re spending most of your time with mom-and-pop businesses and $500 W2 returns, you aren’t going to be able to turn on a dime and reposition yourself as the tax planner to the stars. But you can start by adding a premium division. Seiko has a luxury division called Lasalle. Honda has a luxury division called Acura. Toyota has a luxury division called Lexus. (Hell, even H&R Block had a “Premium” division where you sat in an office with carpeting while they prepped your taxes.)
Premium clients want more than just accounting, payroll, and tax prep. They want service, attention, and recognition. They don’t want to be nickel-and-dimed. They aren’t afraid to pay for that service – in fact, if you don’t charge enough, they won’t take you seriously. So don’t be afraid to throw out bigger numbers than you’re used to. Challenge yourself.
Let me repeat that. If you don’t charge enough, they won’t take you seriously.
These are monthly maintenance plan clients, not fee-for-service clients. You might want to announce aspirational requirements ahead of time. For example, we reserve our Flagship tax Blueprint® service, with the 2x return guarantee, to business owners paying over $100,000 in federal income tax. (That translates to somewhere north of $500,000 in taxable income for a married couple filing jointly.) You can adjust that number up or down as your prospects justify. Just let them know there’s a number – and they’re in or they’re out. (Knowing most people are out is a big part of what makes the best clients want in.)
Consider telling them you can’t take more than one new premium client per month. Don’t be afraid to make them wait. Honestly, if you’re doing the right amount of planning up front, that’s probably all you’ll want anyway. But nothing will make them want to move faster than knowing there’s a line.
Here at TMN, our top-level Fractional Family Office® program is designed to give you exactly this sort of experience to deliver to your clients. But if you’re not ready to step up to our top level, you can still use the velvet rope insight to start raising your top level.
Walmart has a jewelry-and-watch counter where you can get a perfectly nice timepiece. It’ll tell you the time, and look good on your wrist while it does it. But it won’t impress anyone into paying more than “everyday low prices.” And you don’t want to settle for everyday low process for your services, do you? Really?
You might be put off, or even offended, by the tone of this article. Why am I citing obscure watch marques that none of us will ever wear as examples of how to position a business? Why am I dismissing the value of “everyday low price” services when those may be exactly what you went into business to offer? My answer is, if the low-price, high-volume model is working for you, and you’re happy with that, great! Don’t change a thing! But here at TMN, our entire value proposition is built on helping you put more income in your pocket by growing margin, not volume. And if you’re not comfortable with that fundamental direction, you really won’t be happy with us. So if that describes you, feel free to scroll down and unsubscribe from this list. We won’t be offended, and you really don’t have to worry that we’re going after your business ☺.