Have you considered mystery shopping as way to help price your accounting services?
Mystery shopping can help you develop competitive analysis skills. It can also help you price your products and services so both you and your clients receive the value you each deserve.
Gusto, along with our partners at CPA Academy, hosted a great webinar on mystery shopping in accounting that also covered conducting competition analyses and setting prices on goods and services.
Our webinar “Are You Charging Your Clients Enough?: Mystery Shopping Accounting Services” provided key information from Greg Kyte and Caleb Newquist. The webinar provided insights into what people might look for in accounting services, especially when establishing a starting price. You can watch the full webinar here.
In addition to this article, Part One, make sure to check out Part Two of this article series, where you’ll learn about how to set prices for your accounting firm’s services.
In this part, you’ll learn from the accounting expertise of Greg Kyte and Caleb Newquist. Greg Kyte is a licensed CPA and comptroller He is also the founder of Comedy CPA. Caleb Newquist is the Editor-at-Large at Gusto. He is a former CPA and is also the founding editor at Going Concern, a website dedicated to accounting news, trends, and resources.
With years of combined accounting experience, Greg and Caleb were ideal candidates to teach you all about mystery shopping in accounting. Let’s get started!
What is mystery shopping?
You may have heard about mystery shoppers, but may not be sure about who they are and what they do. Mystery shoppers can help you understand competitor prices and how to evaluate your own prices.
Greg explained that mystery shoppers compare product prices and see where they can get the most value for their money. They scope out products, compare product prices, and see where they can get the most value for the price. Mystery shoppers also monitor both how customers interact with businesses and overall business operations. They evaluate your business’ strengths and weaknesses and create competitive analyses comparing you to other businesses.
Greg explained the value of mystery shoppers as it relates to accounting. He gave an account of his experience mystery shopping at popular tax preparation companies.
“I actually have done some mystery shopping of my personal taxes where instead of doing it myself, like I typically do, I actually went out to Liberty Tax and H&R Block. And it was an incredibly eye-opening experience.”– Greg Kyte
Greg explained the importance of mystery shopping and comparing your firm to your competitors. This is especially important because your clients are always actively thinking of alternative solutions to your service:
“You need to identify the next best alternative for your firm because that’s what your clients are doing when they decide to come and use you for their … accounting services. … Whether that’s outsourced CPA, … whether that’s tax, whether it’s accounting … there’s always another alternative that they have. And if your customer is doing their job right, they’re at least thinking about the other alternatives if not actively pursuing them to see what they could get and for what price at other places.”– Greg Kyte
Your clients might not be in the process of actively pursuing an alternative solution to your services, but they always have potential alternatives in mind. If you’re not comparing your prices to other accounting firms and tax service providers, you might find that you’re either overpricing or underpricing your services.
Greg explained four things you need to look for as a mystery shopper when comparing your services to others. These key insights will help you price your own services better.
What to look for when mystery shopping accounting services
As a mystery shopper, Greg discovered valuable insights from having preparers at H&R Block and Liberty Tax locations prepare his tax return. H&R Block and Liberty Tax made simple mistakes on his tax forms, and charged him more than many other qualified tax experts.
The IRS points out how some of the most common tax filing mistakes are misspelled names, missing social security numbers, and simple math mistakes. The H&R Block and Liberty Tax locations that Greg went to made these mistakes on his taxes, and even failed to list Greg Kyte’s two dependents:
“They didn’t put either of my dependent children on my tax return. I didn’t find it because I didn’t think anybody could miss your dependent children on your tax return, especially because I’d already told them about them twice.”– Greg Kyte
This is part of what mystery shoppers look for in accounting services:
- Common mistakes when filing taxes
- Overpriced services
- Other alternatives to tax services
Mystery shoppers also look for a starting price. Clients want the best price and will shop around until they find an anchor price that works for them.
Mystery shoppers also evaluate the services that firms offer their clients. If you’re mystery shopping, you can find out what services are packaged to customers and how they compare to others.
“So if you’re able to get a peek inside what your competition is doing, not just what they’re charging, but what they’re doing for your client, then you have a very good idea of what differentiates you from your competition.”– Greg Kyte
If an accounting firm charges a high price, you want to know if there’s any value behind it. The firm will need to offer exceptional services to justify their high price.
Pricing your services and competitor analysis
Competitive analysis is seeing what competing businesses offer your ideal customer and at what price. It also gives you insights into your own business and what changes you need to make. It helps you create a unique value proposition for your customers. You can use this to price your services:
“You’ll still have your eyes open to what other people are charging, and hopefully, you’ll be able to get your prices where they should be as well.”– Greg Kyte
In addition to pricing, your business can also figure out what strengths you have over your competition. Greg also noted that having CPAs adds value for customers. Your pricing should reflect the value you offer customers.
Greg’s mystery shopping experiences with H&R Block and Liberty Tax show that how mystery shopping can help construct a competitive analyses. You may be grossly underpricing your accounting services without even realizing it.
Greg discovered that H&R Block and Liberty Tax both made obvious mistakes, yet they continue charging more than expert CPAs. People don’t want errors when it comes to their taxes, especially when it will reduce their tax refund. If you’re a quality tax expert, you can charge more for your services than competitors and explain to potential customers that your price reflects the fact that you’ll do their taxes error-free and get them the best possible tax return.
Learn more about mystery shopping and how it can help you price your services
If you want to learn more, check out the full webinar here. You can also check out Part Two of this webinar series, where you’ll learn all about value pricing your accounting services. At Gusto, we want your accounting firms to succeed in their profession, and a huge part of that success is pricing your services so you receive the compensation you deserve and your clients receive the advice they need.
If you want to find out even more about using competitor analysis for improving your firm, check out Gusto’s Partner Program! Gusto’s Partner Program supports accounting professionals who advise clients each day on pricing their services and understanding their competition. Joining Gusto’s Partner Program also makes you eligible for free Gusto payroll, HR tools, and a dedicated Gusto partner advisor. You’ll also receive revenue share or discounts in perpetuity for your clients. Other benefits include free payroll transfers to move your clients to Gusto, a new revenue stream for your practice, and other valuable resources.