A Simple Pricing Strategy That Changes The Consulting Game
Make Life Easier By Using a Simple Pricing Strategy
As a business owner, you have more on your plate than you can handle. Employees to hire, content to write, networking, social media management, writing business plans, and an endless number of other important tasks. Wouldn't it be easier if you could order consulting services with minimal effort? Wouldn't it be better if you could get these services while saving time to do other things?
There are many types of businesses that have made ordering their services simpler. You can order just about anything online for a fixed price. Why haven't consultants developed a simple pricing strategy?
I already hear people shouting....."You can't do that because you don't know how to price work that is unknown!"
How do you price work where requirements are constantly changing?
Apply Standard Contracting Principles to Your Pricing Strategy
I used to work in contracting. One of our key goals was to ensure that we were issuing Requests For Proposals (RFP's) for contract types that were supportive of the type of work that would be performed.
For example, if the work was going to be highly developmental we would issue a Cost-Plus type contract because we didn't know how many hours would be required to complete each task.
If the work was very common and/or had been done many times before, we would issue a Firm-Fixed Price contract because we knew how many hours each task would take.
For a marketing consultant, tasks such as email marketing or social media campaigns are quite common and the number of hours to perform each task is usually known. Most consultants price work after an initial consultation. However, it would make life easier for the buyer if they could buy standard consulting products with the click of a button.
I completed an analysis of tasks that could be priced without a consultation and purchased online.
In reality, you could create a fixed price package for just about anything but the price may be too high (not competitive) based on the amount of risk the consultant is taking on. There are some obvious consulting items that are just not worth the risk of setting a fixed price.
- Requests to improve profits/engagement by a certain percentage (You have no idea where the company is in their process so you cannot adequately determine a price. It will be dependent on each business and where they are in their lifecycle).
- Establishing a brand (dependent on what the business is and what their goals are)
- Conducting any research (depends on type of information to be collected and it's use)
- Conducting A/B testing (depends on what you are testing and how quickly you can collect data)
There are also consulting tasks that can easily be quantified and have a fixed price set.
- Email marketing campaign
- Marketing plan
- Social media campaign
- Content creation
**You can see an example of this on my pricing page for fixed price consulting services.
Keys to Ensure Success
The key to ensuring you don't lose money using a fixed price approach for your pricing strategy is to document exactly what you are doing, what you are delivering, and standardize as much as possible. Any additional requirements should be priced separately.
- Be clear on what the customer will be receiving and when they will be receiving it
- Use a standard process for collecting information and for executing tasks
- Ensure your quality is high - offer a 100% satisfaction policy
- Solicit feedback once you deliver the product and use that to refine your pricing
Changing With The Times
I understand why most consultants are sticking to a cost-plus approach but many of the tasks consultants are hired for today are standard items. Why not make it easier on the buyer and seller by offering an easy method for purchasing common services? This is a different approach to consulting services but I believe it supports the trends of the buyer's market and makes business owner's lives easier!