Contents

About the author

Publisher’s acknowledgements

Author’s acknowledgements

Preface

Introduction

 1  How clients buy services

The data

Rocket Science

Relationship Advice

Routine Work

The five criteria

Pricing Rocket Science

Pricing Relationship Advice

Pricing Routine Work

 2  Cost-plus pricing and beyond

Cost-plus pricing

Client-driven pricing

Competition-driven pricing (market-driven)

How service firms compete

What next?

Client messaging

The competitive landscape – what is your market positioning?

New service launches – setting the market price

 3  Pitching for work

Pitching for Rocket Science

Pitching for Relationship Advice

The link between chemistry, likeability and price

Pitching for Routine Work

Retenders

Post-pitch negotiation on price

The tactics of pitching

 4  Negotiating price

Price and scope are linked

A small reduction

Major reductions

Clients on historically low rates

Dealing with procurement

Just how strong is your relationship?

Negotiating with procurement

Negotiations and Routine Work

 5  The pricing lever

Strategy 1 – increase your prices

Strategy 2 – work harder

Strategy 3 – work smarter not harder

Strategy 4 – cut overheads, reduce the cost base

Strategy 5 – cut prices, win more work

 6  Alternative fees

Option 1 – fixed fees

Option 2 – project-based costing

Option 3 – blended rates

Option 4 – capped fees

Option 5 – annual retainers

Option 6 – contingent fees

Option 7 – success-based fees

Option 8 – discounted hourly rates

The confident partner

 7  Pricing tactics

Free, not cheap

Show the price of added value

Give the client options

Dealing with lowballing

Supporting a client in distress

The ultimatum

Pedestal selling

Discounts for volume

Annual price rises

Having lower cost options

Team structure

Be in the pack

Market intelligence

Trophy clients

Negotiate with the toughest clients at the right time

Differential partner rates

Deliver what was actually paid for

Show the discount

Lower rate does not equal less spend

Act for clients that you like (not the bullies)

From tactics to strategy

 8  Drivers of value

Typical starting point

Creating different services – part 1: best ever service

Creating different services – part 2: lowest cost

Creating different versions

Price discrimination

Creating different services – statistics and data

Using existing clients as your differentiator

Moving from costs incurred to value delivered

The perfect solution – start with value

Value pricing by work type

The big question: does value pricing mean the end of charging by time?

 9  Learning from industry

Pricing across the lifetime of a product

Penetration pricing

Learning from airlines

Add-ons and aftercare – double the profit

Unexpected extra costs and penalties

Insurers and the pool

Price matching promises to (accidentally) stop competition

Power by the hour – changing the supply dynamic

10 Saving clients money

The pricing dilemma

Key Performance Indicators exercise

Spend reduction projects

Targeted reductions

Consolidation and its dangers

Creating and sharing savings

Hidden resources and how to use them

Rocket Science

Routine Work

When to say no

Clients who always want to save money

Finally – when did you last save a client money?

11 Pricing controls and capabilities

Building pricing controls

Utilisation

The rate card

Write-offs

Analysis of current clients

Building pricing capabilities by Robert Browne

The role of pricing in the organisation

Defining pricing capability

Pricing needs a home

Summary

Index

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