What’s stopping your firm from improving its pricing performance?
For most firms, it’s simply about knowing where to start.

Seek practical & actionable pricing improvements

In many professional service firms, management bemoan the fact that they are discounting too much, failing to capture variations, experiencing large write-offs, not capturing a fair share of the value they create for clients and generally have poor pricing disciplines. But amidst all this frustration, it can be hard to know where to start to drive improved pricing outcomes.

Rather than try to make pricing perfect, a more practical approach is simply to seek improvement. And if the improvements are to be actioned, ideally they should be developed and agreed by those responsible for implementing them.

Develop a joint pricing strategy for the Practice Group

But how do you get a diverse group of partners to all agree on a few pricing priorities. Some may operate in more competitive, price-sensitive markets, where discounting is required to win work. Others may have key client relationships where pricing is overseen by the client’s procurement department. Some may work on projects that simply cannot be scoped in advance.

While it is generally inappropriate to develop a pricing strategy at the firm level (the strategy for a Tax group will be quite different to a Real Estate or Infrastructure group), there are significant benefits in developing a pricing strategy for a practice group.

Focus on critical issues to find relevant pricing opportunities

By exploring issues that are particularly relevant to the group (and not wasting their time on issues that are irrelevant), discussing how leading firms are dealing with these challenges and allowing partners to learn from each other, it helps the group identify a broad range of pricing opportunities that they could progress.

These may include:

  • How to compete on superior value, rather than compete on price
  • How to justify why we should be chosen even if we are more expensive
  • How to identify and capture price premiums
  • How to use pricing to improve client satisfaction
  • How to create more accurate estimates
  • How to capture variations in a manner that clients appreciate
  • How to manage projects to improve profitability
  • How to improve pricing processes and pricing disciplines
  • How to use pricing conversations to strengthen client relationships and build trust

Implement a common pricing strategy within the Practice Group

Having identified opportunities, the group can then select the three or four priorities to focus on that they believe will help them win more work, at higher prices, while strengthening client relationships. They can flesh out the specifics of how to action these few priorities.

And most importantly, having jointly developed a focused pricing strategy, they can then keep each other honest on the implementation of the strategy, in order to collectively strengthen the performance of the Practice Group.

Trying to make pricing perfect often hinders progress. There is simply too much to do. But don’t allow this complexity to stop progress. Do something!

Every Practice Group can improve its pricing. What are your priorities? Talk to us to about how we can help your firm to improve pricing performance by developing the right pricing strategy for each practice group.

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