Mastering Services Pricing

5

The pricing lever

Strategy 1 – increase your prices

Strategy 2 – work harder

Strategy 3 – work smarter not harder

Strategy 4 – cut overheads, reduce the cost base

Strategy 5 – cut prices, win more work

In this chapter we are going to examine some of the options that are open to a firm that wants to increase its profits. Most service firms have a relatively simple business model which involves employing staff, housing them, selling their time (either by the hour or using fixed or project-based fees), then accounting for and billing that.

I will look at the options available to a firm that wants to increase profits, which include increasing the prices charged; working harder or increasing utilisation; the infamous ‘working smarter not harder’; ...