What pricing strategies can you use to win new consulting business?

I always promote value based pricing .. and it’s very important to split costing from pricing .. let me explain. Sharing with your client what you have in mind to fulfill their needs as a scope and tying it with a value is essential for the credibility and mastery of what you do .. and it’s always dynamic because sometimes you will exert effort a bit below your offering or a bit higher .. but eventually you bring commitment with your client .. doesn’t work with everyone but I believe it’s a great way to do business .. On another note, costing the assignment on effort (hourly rate) and monitoring this effort is crucial to ensure that your projects are profitable and you maintain a healthy consulting practice

In our consulting firm, we've found success with a value-based pricing strategy, which focuses on the perceived value we deliver to our clients rather than just the cost of our services. This approach allows us to tailor our proposals to demonstrate the tangible benefits and ROI we offer, making the investment worthwhile for the client. We also consider tiered pricing models, offering packages with varying levels of service and customization. This flexibility caters to a broader range of clients and projects, from startups to established corporations. Ultimately, clear communication about the outcomes and value each tier offers ensures clients feel they're making an informed decision that aligns with their needs and budget.

While pricing certainly plays a role in the decision-making process, clients are ultimately looking for consultants who can deliver tangible results and solve their problems effectively. In my experience, selling your value is far more important than competing on price alone for the following reasons: ? Differentiation: Focusing on your value proposition sets you apart from competitors. ? Quality Over Quantity: Emphasizing your value and the quality of your work justifies pricing and positions you as a trusted advisor. ? Long-Term Relationships: Consistently delivering value encourages clients to continue working with you and refer your services.

Ultimately clients want value, and they will have their own view on what value means to them. Of course they can be helped to explore this in negotiations, but if you get to a point where "price" drives their decision then you're on a sticky wicket. Pricing on the basis of outcomes helps (so using the terms here "value-based" and "performance-based", but often clients either won't understand how this works, or won't want this. It can leave them exposed to uncertain price because the future isn't yet clear. In my experience, you want to be willing (and able) to adopt ALL pricing strategies and use each one when it suits the client, the project, and your own resourcing pressures.

The pricing model you choose will depend on the market that you are playing in. Some markets which are highly regulated will only allow for cost-plus pricing and that can at times limit your options. Value-based pricing can be highly advantageous and can be combined with a retainer-based model or performance-based pricing. The key to this approach is having a deep understanding of your customer, their needs, their pains and their gains. If you can create an offering that can help your customers accomplish what they are trying to do and also create gain and relieve pain, you will be very well positioned to use the Value-based pricing model. It requires a shift from focusing on your internal capabilities to your customer needs.

It needs to be a combination of value and base cost, with choosing an expert that has the unique experience with your industry, your region, similar projects done, and clear business future outlook. Meaning, following scrutinize examination of the market, the chosen consultant has to be paid well based on its experience, and in addition, if the senior CXO level would actually like her/him to fully be engaged towards future success, I would add a layer of percentage of the TCO savings, Revenue growth, or both.

Value delivered to the client rather than on the cost of providing the service which requires understanding the client's needs, goals, and the potential impact on consulting services. Highlight the value proposition and outcomes that can be delivered, and set prices accordingly.

By focusing on the tangible impact of solutions, such as revenue growth, cost reduction, or quality enhancement, this method allows businesses to price their services more effectively, capturing the true value delivered. Value-based pricing not only underscores a company's competitive advantage but also fosters alignment between service providers and their clients' objectives, paving the way for deeper and more sustainable relationships. Although it demands more upfront research and ongoing communication, the potential for increased profitability and client satisfaction makes it a compelling approach for businesses aiming to excel in today's competitive landscape.

In my opinion Value based helps to create healthy relationship. It allows consultant team to have open conversation focus on Customer success.

Once, a long-time client complained of overcharging and shrinking margins. Despite team confidence in reducing prices, I sensed a mismatch. Digging in, we realized we'd been delivering far more value than our original pricing reflected. Sitting down with the client, we walked through our operations, adapting to their evolving needs. Sensing an opportunity, we offered a revamped e-commerce solution. Results? Client revenue soared by 27%, margins restored, and our business grew by 20%. Lesson learned: aligning pricing with value is key to mutual success.

This is the most commonly used pricing strategy wherein a fixed project fee is charged payed out on different milestones of the project Fee is charged based on duration, resources deployed (man months) and if any SME consultation is required then that amount is added as well

Os pre?os baseados em projeto s?o interessantes por conta da entrega e metodologia. Obviamente, podem acontecer intercorrências no caminho que pode ser sanado com uma boa conversa anteriormente ao fechamento do contrato.

Implementing project-based pricing in consulting enables clients to anticipate costs clearly which helps in enhancing the appeal of your proposals. Tailor your pricing to the project's scope, intricacy, and client value. Transparency about inclusions and potential extra charges is crucial. Adjust rates according to each project's specific needs and benefits, ensuring competitive and compelling proposals. Ensure to be transparent and showcase value addition which customer requires while responding to RFPs/ RFIs ..

In such case, you get almost all the tools to solve the problem. It's a very comprehensive approach of remediating you were asked for. Definitely, you have to be a pro in a lot of different service strategies you offer to do your job proper and efficient way.

"Project-based pricing might be a good choice if you know all parameters of the project: duration, required team and skills, desired outcome. It also has the advantage that prices can be easily compared between competitors. And if you know the prices of your competitors, one of the easiest strategies to win the project is to beat them or offer some additional discount for a lighthouse project. However, if parameters are not well known, a fixed-price project might not be the best choice because it leaves room for interpretation of what services are included and what are not.

А mixture of Retained-based and Value-based pricing cаn be effective strategy for the long run. This approach is able to keep both firms well-run and efficient.

Wouldn’t recommend it unless the advisor/consultant is really experienced and confident. It requires agility and readiness to respond to multiple challenges. Is so, it is all worth it.

Los honorarios deben estar ligados al cumplimiento de objetivos, tal como si fueras un empleado. El posicionamiento creo que debe ir con una porción fija de honorarios y una parte ligada a los avances y logros que la empresa tenga por nuestros servicios. Evidentemente esto implica definir con toda claridad los indicadores pero sobre todo, los resultados esperados. Esto generará autoconfianza pero principalmente ganará la confianza del cliente, al saber que tendrá que ver resultados para hacer el pago de los honorarios o tarifa.

O trabalho no êxito para a consultoria por exemplo é um pouco temerário, pois s?o muitas horas de trabalho para realizar o programa. Acredito que um valor de pagamento no come?o e uma taxa b?nus seja interessante.

Based on Business model like in Real estate - I agree that we can offer our customers a retainer fee on top-line revenues, in addition to the performance fee. And for some projects like SaaS, it's best to charge fixed implementation plus a retainer. And for construction equipment rental it's best to charge % of asset value.

Based on Business model like in Real estate - I agree that we can offer our customers a retainer fee on top-line revenues, in addition to the performance fee. And for some projects like SaaS, it's best to charge fixed implementation plus a retainer. And for construction equipment rental it's best to charge % of asset value.

Ideal for M&A projects. Fixed fee covers the maintenance of consultant/advisor whereas variable fee covers the added value created. Provided of course that the consultant has the necessary skills and is well placed to shape a favourable valuation.

Penetration pricing is another strategy where you can offer a lower price for the consulting service to attract customers. The goal is to disrupt the market and quickly build a customer base and obtain a market share in a crowded market. The advantage of using the penetration pricing strategy is that it helps you to persuade your competitor’s existing customers to buy your consulting service because your prices are too good to miss. The downside is that you may get forced into a price war with other competitors, which makes it inefficient in the long run. If this happens and you can’t afford to lower your prices any further, you may lose all of your customers to the next business that comes along offering cheaper prices.

The real question should always be: Did my team and I over deliver? It does not really matter how we decide on what our fees should be. What really matters is what the people will say after we have provided our services about us. In general, we should strive to provide a consulting experience so great that the client will be happy to give us our fee, and will want us back for more!

El tipo de costeo de la consultoria debe estar relacionado con la experiencia del consultor sobre determinado ámbito de conocimiento y/o temática. No es lo mismo una tarifa al iniciarse en el mundo de la consultoría que luego de haber obtenido una buena experiencia. Nunca hay que olvidar que el consultor es la persona a la cual se consulta sobre determinado tema o situación. En la matriz RACI de responsabilidad, las empresas, esperan que, en principio, cumplan con la letra C (consultant) cuando tienen que salir a buscar apoyo o conocimientos externos a su organización. No se puede fallar. El precio de sus servicios debe ser proporcional al valor que tienen como capacidad para ofrecer a una empresa o negocio.

While the article outlines fundamental pricing strategies, the crucial aspect is aligning them with customer and company needs. During deal finalization, I ensure accuracy in assessing efforts, value, volume, resources, and infrastructure to mitigate the risk of over-cost during execution.

Penetration Pricing: Initially offer lower rates to enter a new market or attract first-time clients, with plans to increase rates once a relationship is established and value is demonstrated. Tiered Pricing: Provide different service packages (basic, standard, premium) at various price points to cater to a wide range of clients. Bundling Services: Offer a combination of services at a discounted rate compared to purchasing them separately. This can increase the perceived value. Flexible Payment Terms: Offering flexible payment options (like phased payments for milestones) can make your services more accessible to a variety of clients.