This document provides guidance on how to set prices for services by considering factors like the customer's perceived value, completed scope of work, customer profile, competitors' prices, available resources, and risk reduction. It outlines questions to ask the customer regarding budget, deadlines, decision makers, and past experiences. Models are presented to help determine an appropriate price range that is not too expensive, cheap, or inexpensive for the customer.

1. How to Set Price
Ed Kless
Senior Director, Partner Development
and Strategy

2. Presuppositions
• Defined value
• Completed a scope

3. Develop Options
E D S
•B+
C •B+ •1 hour
•Convert…
•RQA •4 SR
•Integrate…
•A+ •A +
B •4 hour
•BPR •Provide…
•2 SR
•SRC •Develop…
•PC
A •Install… •8 hour
•NA
•Train… •1 SR
•SoF

4. Neinbach’s Model
WA HF PF
C
B
A

5. Questions to ask before setting price
• What does the customer think the value of our solution is?
• Have we done a complete scope document/project plan?
• With whom on organization chart am I dealing?
• Who referred this customer to us? Why were we referred in the first
place?
• Do they have any time sensitive deadlines for the completion of this
project? Why do they need to do it now and not in six months?
• Who’s paying for the service? Are they spending other people’s money?
• Do we have any competitors? If so, who? What price information do we
have about these competitors?
• How profitable is customer’s company? How long have they been in
business?
• How busy are your resources?
• Have they engaged with someone else prior to us to do similar work? Who
was prior firm and why are they changing?
• How sophisticated is the customer?
• Does customer add to firm’s skills or markets?
• Do we like this customer? What is the state of their restroom?
• How do we help reduce the customer’s risk?

6. Van Westendorp’s Model
Too
Expensive Cheap Too cheap
expensive
C
B
A

7. The Proposal
Item $
•G+
V •Convert…
•Integrate…
•T+
G •Provide…
•Develop…
T •Install…
•Train…