Pricing your consultancy services


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Considerations when pricing your consulting services: By Bryant Nielson, CapitalWave Inc.

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Pricing your consultancy services

  1. 1. Pricing your Consultancy Services<br />D E L I V E R I N G I N N O V A T I V E S O L U T I O N S ®<br />Copyright © 2011 All Rights Reserved <br />
  2. 2. Bryant Nielson, CEO & Managing Director<br /><br />http://www.facebook/capitalwave<br /><br />Bryant Nielson CEO & Managing<br />http://www.CapitalWave.com<br /><br />bryant.nielson<br />CapitalWave, Inc.<br />Delivering Innovative Training Solutions<br />
  3. 3. Pricing your Consultancy Services<br />AGENDA<br />Pricing Concepts<br />Factors affecting the Pricing Strategy<br />Penetrating Pricing<br />Pricing is too High<br />Difficulty in Pricing New Products<br />Pricing Methods in Strategic Marketing<br />Olympic Pricing Model <br />
  4. 4. Pricing Concepts<br />Price of What?<br />Price to Whom?<br />Price from Where?<br />Price When?<br />Does it include free services?<br />Does it include a guarantee? If so, for how long?<br />Does this include the deluxe model?<br />Is the a basic cost?<br />
  5. 5. Factors affecting the Pricing Strategy<br />Demand Based Pricing<br />Competition Based Pricing<br />Cost Plus Pricing<br />Elements of a Retail Price<br />Fixed Costs (rent, telephones, computers, insurance, utilities, etc)<br />Variable Costs (compensation, raw materials, delivery)<br />Retail Price = Cost + Mark Up<br />
  6. 6. Penetrating Pricing <br />Used to stimulate market and sales growth<br />Offering products at low prices<br />Acquire and hold market share<br />Simulate market growth to minimize competition<br />Price has to be set where there is value<br />Price must be in reach of the buyer<br />Targeted towards specific market segments<br />Walmart vs. Nordstroms<br />
  7. 7. Pricing Methods in Strategic Marketing<br />Full Cost Pricing<br />Marginal Cost Pricing<br />Price Discrimination<br />Multi-Product Pricing<br />Transfer Pricing<br />
  8. 8. 7 Mistakes of Poor Pricers<br />Nothing we do deserves a Premium Price<br />Average Pricing seems Fair<br />Cost-based Pricing is easer to explain<br />Everyone else prices it that way<br />Our Sales Team incentives are driven by volume not value<br />Don’t step on anyone’s toes<br />The Customer ‘Tells-us-the-Price’<br />
  9. 9. Difficulty in Pricing New Products<br />Fixed costs unknown<br />Variable costs unknown<br />Competition pricing unknown<br />UP<br />
  10. 10. Olympic Pricing Model<br />
  11. 11. Olympic Pricing Model<br />
  12. 12. Discussion<br />
  13. 13. Proposals: Considerations and Presenting<br />D E L I V E R I N G I N N O V A T I V E S O L U T I O N S <br />Copyright © 2011 All Rights Reserved <br />
  14. 14. Bryant Nielson, CEO & Managing Director<br /><br />http://www.facebook/capitalwave<br /><br />Bryant Nielson CEO & Managing<br />http://www.CapitalWave.com<br /><br />bryant.nielson<br />CapitalWave, Inc.<br />Delivering Innovative Training Solutions<br />
  15. 15. Considerations<br />So what considerations should an Vendor think about for a client proposal?<br />
  16. 16. Proposal Solicitation<br />ORAL PRESENTATIONS<br /><ul><li>Oral presentations should inspire confidence
  17. 17. Oral Presentation should position the company’s capabilities
  18. 18. Oral Presentation should identify unique resources</li></li></ul><li>Proposal Solicitation<br />WRITTEN PRESENTATIONS<br /><ul><li>Detailed Written Proposals
  19. 19. Proposals should be Marketing Documents that describe Value and Benefits</li></li></ul><li>Supplier Selection<br />Supplier Selection Process<br /><ul><li>Specify desired supplier attributes
  20. 20. Indicate the relative importance of those attributes
  21. 21. Understand VVA (Vendor Value Assessment)
  22. 22. Delivery Selection
  23. 23. Reliability
  24. 24. Price Reputation
  25. 25. Procedural Selection
  26. 26. Technical Service
  27. 27. Supplier Flexibility
  28. 28. Product Reliability
  29. 29. Political Selection
  30. 30. Price
  31. 31. Reputation
  32. 32. Product Reliability
  33. 33. Service Reliability
  34. 34. Supplier Flexibility</li></li></ul><li>Supplier Process<br />Supplier Selection Process<br /><ul><li>Attempt to negotiate with Preferred Suppliers 1998 Purchasing Magazine Survey
  35. 35. Better pricing
  36. 36. Better terms
  37. 37. Counter arguments
  38. 38. Show evidence on Total Cost of Ownership
  39. 39. Live-cycle Costs lower than competitors
  40. 40. Value that buyers receive
  41. 41. Superior offering over competitors</li></ul>92%<br />
  42. 42. Discussion<br />