Mastering services pricing: designing pricing that works for you and for your clients

✍ Scribed by Doolan, Kevin

• Publisher: FT Press; Pearson
• Year: 2015
• Tongue: English
• Leaves: 321
• Category: Library

✦ Synopsis

The definitive guide on how to price services to deliver profit, fund for product development and meet the needs of the customer/client at a price they are happy to pay.



As traditional manufacturing companies move to service provision, how should they price their services?

What pricing model should they develop and what buyer behaviour model should they nurture? What will happen if you get your services offering right, but your pricing model wrong?





Mastering Services Pricingshows you how to create pricing that allows you to deliver maximum profitandhigh client satisfaction.



. Learn that the cost plus model won t work for service provision

. Understand how your competitors will use pricing to gain market share, create growth and tie in existing customers

. Recognise thatProduct pricing is coercive, services pricing is collaborative

. Understand that services pricing includes lots of frees

. Understand market positioning and how this affects your price and how you can communicate this to clients

. Discover how to maximise profit and client satisfaction

. Be confident in your pricing strategy by having a sound basis for your decision making

"

✦ Table of Contents

Cover......Page 1
Contents......Page 10
About the author......Page 14
Publisher’s acknowledgements......Page 15
Author’s acknowledgements......Page 16
Preface......Page 18
Introduction......Page 20
1 How clients buy services......Page 30
THE DATA......Page 32
ROCKET SCIENCE......Page 34
RELATIONSHIP ADVICE......Page 37
ROUTINE WORK......Page 38
THE FIVE CRITERIA......Page 39
PRICING ROCKET SCIENCE......Page 41
PRICING RELATIONSHIP ADVICE......Page 44
PRICING ROUTINE WORK......Page 49
2 Cost-plus pricing and beyond......Page 52
COST-PLUS PRICING......Page 54
CLIENT-DRIVEN PRICING......Page 59
COMPETITION-DRIVEN PRICING (MARKET-DRIVEN)......Page 62
HOW SERVICE FIRMS COMPETE......Page 66
WHAT NEXT?......Page 74
THE COMPETITIVE LANDSCAPE – WHAT IS YOUR MARKET POSITIONING?......Page 75
NEW SERVICE LAUNCHES – SETTING THE MARKET PRICE......Page 77
3 Pitching for work......Page 82
PITCHING FOR ROCKET SCIENCE......Page 84
PITCHING FOR RELATIONSHIP ADVICE......Page 86
THE LINK BETWEEN CHEMISTRY, LIKEABILITY AND PRICE......Page 91
PITCHING FOR ROUTINE WORK......Page 96
RETENDERS......Page 100
POST-PITCH NEGOTIATION ON PRICE......Page 102
THE TACTICS OF PITCHING......Page 104
4 Negotiating price......Page 110
PRICE AND SCOPE ARE LINKED......Page 117
A SMALL REDUCTION......Page 121
MAJOR REDUCTIONS......Page 123
CLIENTS ON HISTORICALLY LOW RATES......Page 124
DEALING WITH PROCUREMENT......Page 128
JUST HOW STRONG IS YOUR RELATIONSHIP?......Page 129
NEGOTIATING WITH PROCUREMENT......Page 131
NEGOTIATIONS AND ROUTINE WORK......Page 138
5 The pricing lever......Page 142
STRATEGY 1 – INCREASE YOUR PRICES......Page 144
STRATEGY 2 – WORK HARDER......Page 153
STRATEGY 3 – WORK SMARTER, NOT HARDER......Page 158
STRATEGY 4 – CUT OVERHEADS, REDUCE THE COST BASE......Page 159
STRATEGY 5 – CUT PRICES, WIN MORE WORK......Page 162
6 Alternative fees......Page 166
OPTION 1 – FIXED FEES......Page 169
OPTION 2 – PROJECT-BASED COSTING......Page 173
OPTION 4 – CAPPED FEES......Page 185
OPTION 5 – ANNUAL RETAINERS......Page 186
OPTION 6 – CONTINGENT FEES......Page 187
OPTION 7 – SUCCESS-BASED FEES......Page 189
OPTION 8 – DISCOUNTED HOURLY RATES......Page 190
THE CONFIDENT PARTNER......Page 191
7 Pricing tactics......Page 192
FREE, NOT CHEAP......Page 194
GIVE THE CLIENT OPTIONS......Page 196
DEALING WITH LOWBALLING......Page 197
THE ULTIMATUM......Page 200
DISCOUNTS FOR VOLUME......Page 201
ANNUAL PRICE RISES......Page 202
HAVING LOWER COST OPTIONS......Page 203
TEAM STRUCTURE......Page 204
BE IN THE PACK......Page 205
MARKET INTELLIGENCE......Page 206
TROPHY CLIENTS......Page 207
NEGOTIATE WITH THE TOUGHEST CLIENTS AT THE RIGHT TIME......Page 208
DIFFERENTIAL PARTNER RATES......Page 210
SHOW THE DISCOUNT......Page 212
LOWER RATE DOES NOT EQUAL LESS SPEND......Page 213
ACT FOR CLIENTS THAT YOU LIKE (NOT THE BULLIES)......Page 214
FROM TACTICS TO STRATEGY......Page 215
8 Drivers of value......Page 216
TYPICAL STARTING POINT......Page 218
CREATING DIFFERENT SERVICES – PART 1: BEST EVER SERVICE......Page 219
CREATING DIFFERENT SERVICES – PART 2: LOWEST COST......Page 223
CREATING DIFFERENT VERSIONS......Page 224
CREATING DIFFERENT SERVICES – STATISTICS AND DATA......Page 228
USING EXISTING CLIENTS AS YOUR DIFFERENTIATOR......Page 230
MOVING FROM COSTS INCURRED TO VALUE DELIVERED......Page 231
THE PERFECT SOLUTION – START WITH VALUE......Page 232
VALUE PRICING BY WORK TYPE......Page 235
THE BIG QUESTION: DOES VALUE PRICING MEAN THE END OF CHARGING BY TIME?......Page 236
9 Learning from industry......Page 238
PRICING ACROSS THE LIFETIME OF A PRODUCT......Page 240
PENETRATION PRICING......Page 244
LEARNING FROM AIRLINES......Page 245
ADD-ONS AND AFTERCARE – DOUBLE THE PROFIT......Page 252
UNEXPECTED EXTRA COSTS AND PENALTIES......Page 255
INSURERS AND THE POOL......Page 256
PRICE MATCHING PROMISES TO (ACCIDENTALLY) STOP COMPETITION......Page 257
POWER BY THE HOUR – CHANGING THE SUPPLY DYNAMIC......Page 259
10 Saving clients money......Page 262
THE PRICING DILEMMA......Page 264
KEY PERFORMANCE INDICATORS EXERCISE......Page 269
SPEND REDUCTION PROJECTS......Page 271
TARGETED REDUCTIONS......Page 273
CONSOLIDATION AND ITS DANGERS......Page 274
CREATING AND SHARING SAVINGS......Page 276
HIDDEN RESOURCES AND HOW TO USE THEM......Page 277
ROUTINE WORK......Page 278
WHEN TO SAY NO......Page 279
CLIENTS WHO ALWAYS WANT TO SAVE MONEY......Page 280
FINALLY – WHEN DID YOU LAST SAVE A CLIENT MONEY?......Page 281
11 Pricing controls and capabilities......Page 284
UTILISATION......Page 286
THE RATE CARD......Page 288
WRITE-OFFS......Page 291
ANALYSIS OF CURRENT CLIENTS......Page 292
BUILDING PRICING CAPABILITIES BY ROBERT BROWNE......Page 295
THE ROLE OF PRICING IN THE ORGANISATION......Page 296
DEFINING PRICING CAPABILITY......Page 297
PRICING NEEDS A HOME......Page 301
SUMMARY......Page 307
Index......Page 308