Rethinking Unlimited Access Level Agreements

While watching Rory Sutherland’s Zeitgeist presentation for the 20th time, I was struck (finally or again) by his story about Spotify and how they have not gotten much traction with their offer of unlimited downloads per month. He suggests that they change it to some absurdly high number like 180 songs a month.

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Sutherland reasons that unlimited provides no context to the offering. As he put it, “Nobody knows what unlimited music is worth. It is a bit like asking, ‘Would you like to buy my unicorn?’”

The 180 song per month limit would give the price context in that it could be compared to iTunes at $0.99 per song. So for $9.99 a month you could enjoy $180 worth of music.

This got me to thinking.

Perhaps access level agreements should have a similar notion. Instead of saying unlimited access, perhaps it should be changed to 30 contacts (phone calls or emails) per month. Now, this would be more than anyone could possible need, and would therefore it would not be a barrier to any customer in terms of being worried about wasting a call on their particular issue. It would, however, allow them to compare it to other plans where there is a per call fee, thereby increase the perceived value of your offering.

What are your thoughts?

ET HORA LIBELLUM DELENDA EST

A Pricing Idea Confirmed

For years, whenever I have spoken about offering access level agreements, I have suggested a 20 percent premium if the customer wants to pay monthly instead of annually.

Last week, I got some confirmation that my pricing suggestion is right on target. Google is now offering a monthly subscription price for their Google Apps. The only price offered in the past was $50 per user per year, cheap enough to be sure.

Now, they offer a monthly price of $5 per user per month – a difference of, you guessed it, 20 percent.

Every so often, I get one way right!

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How NOT to handle customer consultations

Recently, a friend of mine passed along a newsletter she received from her CPA. Most of the content dealt with tips on preparing for tax filing, but one entry stood out.

Consultations versus “Quick Questions”

One of the things my clients have enjoyed over the years is relatively easy access to me for “quick” questions, by email or phone.

I noticed this past year, that sometimes I was overloaded with these “quick question” contacts during my busiest time of the year.  Even though I strongly encourage my clients to contact me for consulting during the other months for planning-type consulting, I was having to dedicate one to two hours a day replying to “quick” questions when I had 3 weeks or more of tax return work to attend to.  Handling all the “quick” questions was not happening quickly enough, and I fell even further behind.  My CPA association professional standards require me to obtain documentation for all advice given, which adds to the time needed to reply to your questions.

To help with the stress, and to be fair to those clients who have brought their tax information in to be worked on, I have decided to handle these email and phone “quick questions” a little differently this coming year.  It is an experiment, and I am open to hearing from you constructive comments on how I can better handle this area.

As announced in an earlier newsletter, starting February 1, 2011, I began handling these consultation requests more formally.  I will provide one “quick” question consultation, by email or phone for free to each returning tax client, per year.  Of course, there are limits to this, based on complexity and time involved, thus the implied definition of “quick” question.

After the one free “quick question” consultation, each additional such consultation will be provided to you for a small fee, depending on the complexity of the consultation and the length of time involved.

The minimum fee for these additional consultations will be $25 and will be due promptly.  If you choose to have me charge this fee to your credit or debit card, I will add $1 to cover part of the fees the card companies charge me for handling the transaction.

Yes, I know this is quite a change from the unlimited access to me you have enjoyed in the past, but I must get better control over my time, especially during tax season.  Your planning ahead on consulting questions, to minimize the fees I charge to you, will enable me to devote more time to tax form preparation during the busy times.

During the less busy times of the year, I will, at my discretion, waive the “quick question” consultation fees.

Please understand the limitations on my time during my busy time of year, which does not end until early May.  I will be working 70 to 80 hours a week during this time, doing my best to get your tax forms back to you as soon as possible.

One thing you might keep in mind, too, is that when you call for that “quick question”, if you talk with my receptionist or my tax assistant, and you will accept an answer from her, and she does not have to ask me the question to give you an answer, I will not consider this a consultation subject to the fee mentioned above.

What I am trying to accomplish is a reduction of the interruptions.  The preparation of your tax forms is tedious work requiring deep concentration.  Each time I have to stop to answer a phone “quick question”, even if it just takes 5 minutes, requires me to then have to regroup my thoughts and get back to the task at hand.  On a typical day in my busy time, I receive 20 to 30 calls a day.  I have a receptionist to take those calls and hopefully handle your requests.

Much is wrong with this, but let me point out a few items:

  1. The use of quotation mark around the word quick indicating that they are so-called by the client (his word) and that in his mind often these are not quick.
  2. Clearly, he uses the term client in all of its patron-benefactor denotation glory. He views my friend and others as the great unwashed, who can never understand the subtleties of his work.
  3. He acknowledges that these have become a problem, but rather that stratifying his clients (customers) and offering options, he decides to limit these connections for all.
  4. By limiting these interactions he is losing potential business. I am sure that some of these calls turn into engagements, now he will not ever get them because customers will be wondering if they should blow their one free call on something they think is insignificant.
  5. He also institutes a penalty of $1 for putting one of these on a credit card. I guess he would rather bill them in arrears and wait to be paid for at least 30 days. Why not just charge everyone $26 and call it even across the board?
  6. He insinuates that the answers giving by his receptionist and tax assistant have no value. If they answer the question then it must be unworthy. This makes them feel valued I am sure.
  7. Ultimately, he is blaming his own mismanagement of his resources on his customers.

Here is the kicker – he does not bill my friend by the hour, he fix prices all his work and as far as I know does not keep a timesheet. He could be a Trailblazer based on this. But the tyranny of time cuts deep, my friends, he is still mired in being a firm of the past.

SLAs are Dead

I have just returned from Sage North America’s Insights conference in Denver. The conference is, at the same time, completely exhausting and completely invigorating. I learn so much from Sage partners because they continue to test my thinking.

Without question, the best test of my thinking came during my pre-conference session on Sunday. One of the attendees (I cannot remember who, so if it is you, please claim the credit) shook me to the core. She said, “So if you believe we are professional knowledge firms, why should we be selling service level agreements?” I was dumbstruck.

My only response was, “You should not.” I have to admit, I have been wrong.

In one of the all-time great movies The Ten Commandments, Cedric Hardwicke as the Pharaoh Sethi says, “Let the name of Moses be stricken from every book and tablet. Stricken from every pylon and obelisk of Egypt. Let the name of Moses be unheard and unspoken, erased from the memory of man, for all time.”

The same must be done for service level agreements. So, let the phrase “service level agreement” be stricken from every Ron Baker book and article. Stricken from every blog post and comment on the VeraSage Website. Let the phrase of “service level agreement” be unheard and unspoken, erased from the memory of professionals, for all time.

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In keeping with this pronouncement, above is my slide from my session on creating, service access level agreements at the conference. Access Level Agreement is, for now, a placeholder. Other ideas I mulled over where: customer level agreements (too direct), support level agreements (too limiting), and access contract (too legal).

It is time once again to tap into the collective intellectual capacity of the community. Please post your ideas and arguments for or against the correct phrase.