Pricing ideas to upgrade your fees

Do you sometimes wonder if your pricing model is the best one for you and your clients?

When you find the sweet spot for your pricing it will help you convert and keep your ideal clients.

Both you and your clients will feel like it’s a fair deal for both parties.

How often are you having pricing negotiations?

If it’s never, you have room to rethink your prices.

If it’s often, it doesn’t mean you need to reduce your prices, but it may be an opportunity to look at how well your pricing aligns to what serves your clients best.

Let’s take a look at a few options and there might be a few gems in here that you can use to tweak your current pricing structure.

These options are just to help you start your creativity around pricing, please use each example as a starting point for ideas to help you tweak and refine your own fees.

Here we go…

The traditional approach

A percentage of fee, typically increasing with seniority.

Inside this traditional approach many agency owners struggle with how to transition from a contingent option to retained.

Here’s a few options that can help you with this transition if that’s what you’d like to do.

A sliding scale option

-?Introduce a sliding scale option for the sign on fee or first instalment.

-?This feels more bespoke for the client.

For example, your overall fee may be 25% (this varies greatly country to country so don’t read too much into the percentage).

You could offer the client the option of paying a higher upfront fee in return for a slightly lower overall percentage.

- 5% upfront, 10% on presenting candidates and 10% on placement = 25%

-?15% upfront, 5% on presenting candidates and 0% on placement = 20%

i.e. a discount for paying you more upfront.

There are many ways you could shape this to create a bespoke solution for your clients.

Don’t be afraid of creating bespoke solutions.? Clients love it when they believe the fee has been tailored to their needs. (note, I didn’t say discounted)

-?You can position it as a good mix of flexibility and commitment. The “Pay as you go” option.

-?Try to avoid the word retainer if it creates a negative response in your market. ?

We used to have a product where we took a tiny deposit ($2,000) for clients where retained wasn’t an option just to secure the commitment.

We kept the $2,000 if at any point they cancelled the assignment as long as we submitted two appropriate candidates.

This way the risk was shared. And we would advise them that extra commitment would prioritise their role over contingent customers. Clients loved it.

Flat fees can work too

-?Flat fees can help clients forecast predictability if that is important to them. It’s a very transparent and simple way of billing.

-?To decide your flat fee, I would recommend taking the average fee for that tier of role and fix the cost there.

* Flat fee doesn’t mean less cost; it means consistency.

Offering three tiers with varying inclusions

You will have seen this with SAAS models.

If this suits you can list out variables such as guarantee period, marketing, deploying additional resources to expedite the process, etc.

Here’s a few examples on which you could model your 3 options.

Guarantee

-?Basic Tier - 30 day standard guarantee

-?Mid Tier - 60- 90 days replacement

-?Premium Tier - rolling replacement for 2 hires or another option, it can be used against another position.?

Number of roles covered

-?Basic Tier – 1 role

-?Mid Tier – 3 roles

-?Premium Tier – 5 roles

This works well for clients with bulk hiring needs.

Sourcing channels

-?Basic Tier – Standard process

-?Mid Tier – Talent mapping

-?Premium Tier - Engaging a sourcing team to work on the role exclusively

Speed of delivery

-?Basic Tier – Standard process

-?Mid Tier – Guaranteed shortlist in 2 weeks

-?Premium Tier – Priority service with 7 day turnaround and daily updates

Variables are only valuable if that’s a hot button for client.

Once you know what they’re looking for you can reconfigure this proposal to suit what you know is important to them.

For some clients speed may be important, for others sweeping the entire market may be more important to them.

Depth of screening

-?Basic Tier – Standard resume screening and interview

-?Mid Tier ?- In- depth behavioural interviews and cultural fit assessment

-?Premium Tier – Psychometric testing and police checks

Marketing campaign

-?Basic Tier – Standard process, no client branding

-?Mid Tier – Customised marketing co-branded

-?Premium Tier – Full employer branding package, including client video and career landing page

Other ideas can include

-??A portal to log in to talent pools (great for premium clients)

-?Recruitment consulting services to an in-house team (they will always come back and use you when they are stuck hiring)

-?Data insights from your hiring process that you may or may not charge premium clients for

I hope that helps get the creative juices flowing in a way that helps you leverage your fees and create something you know your clients will appreciate.

You can mix and match any of these ideas to create something unique and really stand out to your clients.

Let me know what you think!

BK