Price is a key component of profitability, but Colin Jasper and Stuart Dodds think that we are going about price in the wrong way. They want to change the story of price- from being focused on the cost and start prioritising value. It’s not that complicated to understand pricing according to Jasper, all it takes is a change in attitude.
Jasper isn’t the only one who thinks we need to change our attitude to price. Seth Godin, author and entrepreneur agrees: “Perhaps the reason price is all your clients care about is because you haven’t given them anything else to care about.”
Or, put differently, we need to reestablish our firms as visible experts and trusted advisors.
Jasper has worked with more than 200 of the top law firms around the globe in changing the narrative about pricing within their firm. Jasper is renowned for publishing numerous chapters on pricing for the American Bar Association book, The Power of Legal Project Management (2014) and several chapters in Pricing in the Front Line (2017). Dodds is also a highly regarded author on pricing and is considered one of the leading pricing practitioners in his field. He was responsible for the development of global pricing strategies and provided targeted pricing support to 77 different offices worldwide in his role as Director of Global Pricing and LMP at Baker McKenzie.
“Perhaps the reason price is all your clients care about is because you haven’t given them anything else to care about.”
Here are three of the top issues that Jasper has spoken about in pricing and some of the ways to deal with them:
Clients are acutely aware of prices and will often use them as a determining factor to differentiate firms. However, there has been a gradual shift in attitudes towards pricing in the last few years. Business deals are becoming less personal and clients often feel that they can voice their concerns about price and challenge the prices.
When Jasper first began working in this industry, he says that clients and firms had a much more personal relationship and therefore didn’t question price as much. “The clients have become much more sophisticated buyers, nowadays most companies are using procurement techniques on pricing, meaning that clients have more opportunities to voice their concerns,” says Jasper.
These changes have allowed for a firm to change the way they interact with clients and manage pricing. “The client's ability to buy professional services has gone up but it has put pressure on firms to sell themselves and justify their price and their value,” says Jasper. For the most part, clients are not making decisions based on the cheapest or the lowest price per hour, but rather the value which they are getting for their money. “It is the firm’s role to get the client to understand the best value.”
2. Driving internal change
Partners are often measured based on revenue metrics rather than profitability. This approach can lead to revenue chasing activities that ultimately end up in price (and thus profit) reduction strategies. Structural change is often required to redefine these attitudes, pricing and fee setting skills, improvements to processes for measuring value creation and input costs.
It is important that within a firm you have a clear understanding of who will be doing the work and the amount of work that goes into a project and the value this will create. This requires good internal management and clear and transparent communication, which will do wonders for a firm’s interactions with clients.
3. Learning from the best
Intensive research into some of the highest performing organisations globally has found that this change in marketing strategies away from being primarily focused on pricing and rather focusing on value has proved to be hugely successful. Jasper has studied different companies across the professional services sector and found some of the best examples are coming from other firms like management and consultants.
“Management firms and consultancies are the best at communicating value and we can learn from them, it’s interesting to see different approaches and learn from different parts of the world. True best practice doesn’t always reside in one sector,” says Jasper.
Jasper wants to see a change in the pricing sector. He hopes that less focus on price, and more focus on value will help clients and firms work more harmoniously together. By altering the perception of price it can have a radical effect on the rest of your firm. This conceptual shift and a change in attitudes will allow for firms to make more money with higher client satisfaction which reflects better on your business.
Join Colin Jasper and ICON in becoming a master of pricing strategy
Colin Jasper in partnership with ICON will be hosting a two-day masterclass in pricing which aims to teach participants how to implement these methods into their firms and will go into more depth about changing attitudes in Sydney on 20-21 May 2019 and in Hong Kong on 23-24 May 2019.
“People will leave these masterclasses with more confidence with how do deal with pricing within their firms and how to implement them,” says Jasper. This masterclass promises to help firms improve their pricing and teach them how to communicate with clients.
You can find more information about these classes here:
Make sure you follow our social media pages to get the latest updates from the ICON community.