Pricing your consultancy services
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© 2010 CapitalWave, Inc. | All rights reserved.
CapitalWave, Inc.
Pricing your Consultancy Services
Copyright © 2011 All Rights Reserved
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© 2010 CapitalWave, Inc. | All rights reserved.
CapitalWave, Inc.
Bryant Nielson CEO & Managing Director
http://www.CapitalWave.comhttp://www.FinancialTrainingSolutions.com
http://www.linkedin.com/in/bryantnielson
http://www.facebook/capitalwave
http://twitter.com/capitalwavehttp://twitter.com/LeadershipFX
http://www.yourtrainingedge.com
bryant.nielson
CapitalWave, Inc.Delivering Innovative Training Solutions
Bryant Nielson, CEO & Managing Director
Page 3
© 2010 CapitalWave, Inc. | All rights reserved.
CapitalWave, Inc.
AGENDA
Pricing Concepts
Factors affecting the Pricing Strategy
Penetrating Pricing
Pricing is too High
Difficulty in Pricing New Products
Pricing Methods in Strategic Marketing
Olympic Pricing Model
Pricing your Consultancy Services
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© 2010 CapitalWave, Inc. | All rights reserved.
CapitalWave, Inc.
Price of What?
Price to Whom?
Price from Where?
Price When?
Does it include free services?
Does it include a guarantee? If so, for how long?
Does this include the deluxe model?
Is the a basic cost?
Pricing Concepts
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© 2010 CapitalWave, Inc. | All rights reserved.
CapitalWave, Inc.
Demand Based Pricing
Competition Based Pricing
Cost Plus Pricing
Elements of a Retail Price Fixed Costs (rent, telephones, computers, insurance, utilities, etc) Variable Costs (compensation, raw materials, delivery)
Retail Price = Cost + Mark Up
Factors affecting the Pricing Strategy
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© 2010 CapitalWave, Inc. | All rights reserved.
CapitalWave, Inc.
Used to stimulate market and sales growth
Offering products at low prices
Acquire and hold market share
Simulate market growth to minimize competition
Price has to be set where there is value
Price must be in reach of the buyer
Targeted towards specific market segments
Walmart vs. Nordstroms
Penetrating Pricing
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© 2010 CapitalWave, Inc. | All rights reserved.
CapitalWave, Inc.
Full Cost Pricing
Marginal Cost Pricing
Price Discrimination
Multi-Product Pricing
Transfer Pricing
Pricing Methods in Strategic Marketing
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© 2010 CapitalWave, Inc. | All rights reserved.
CapitalWave, Inc.
1. Nothing we do deserves a Premium Price
2. Average Pricing seems Fair
3. Cost-based Pricing is easer to explain
4. Everyone else prices it that way
5. Our Sales Team incentives are driven by volume not value
6. Don’t step on anyone’s toes
7. The Customer ‘Tells-us-the-Price’
7 Mistakes of Poor Pricers
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© 2010 CapitalWave, Inc. | All rights reserved.
CapitalWave, Inc.
Fixed costs unknown
Variable costs unknown
Competition pricing unknown
UP
Difficulty in Pricing New Products
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© 2010 CapitalWave, Inc. | All rights reserved.
CapitalWave, Inc.
Olympic Pricing Model
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© 2010 CapitalWave, Inc. | All rights reserved.
CapitalWave, Inc.
Olympic Pricing Model
Gold Silver Bronze
Pre consultancy X X X
eLearning X X
Program Delivery X X X
Post Assessment X X X
Post Debrief X X
90 day follow up X
COST $5,000 $4,000 $3,500
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© 2010 CapitalWave, Inc. | All rights reserved.
CapitalWave, Inc.
Discussion
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© 2010 CapitalWave, Inc. | All rights reserved.
CapitalWave, Inc.
Proposals: Considerations and Presenting
Copyright © 2011 All Rights Reserved
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© 2010 CapitalWave, Inc. | All rights reserved.
CapitalWave, Inc.
Bryant Nielson CEO & Managing Director
http://www.CapitalWave.comhttp://www.FinancialTrainingSolutions.com
http://www.linkedin.com/in/bryantnielson
http://www.facebook/capitalwave
http://twitter.com/capitalwavehttp://twitter.com/LeadershipFX
http://www.yourtrainingedge.com
bryant.nielson
CapitalWave, Inc.Delivering Innovative Training Solutions
Bryant Nielson, CEO & Managing Director
Page 15
© 2010 CapitalWave, Inc. | All rights reserved.
CapitalWave, Inc.
So what considerations
should an Vendor think about for a
client proposal?
Considerations
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© 2010 CapitalWave, Inc. | All rights reserved.
CapitalWave, Inc.
Proposal Solicitation
ORAL PRESENTATIONS
• Oral presentations should inspire confidence• Oral Presentation should position the company’s capabilities• Oral Presentation should identify unique resources
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© 2010 CapitalWave, Inc. | All rights reserved.
CapitalWave, Inc.
WRITTEN PRESENTATIONS
• Detailed Written Proposals• Proposals should be Marketing Documents that describe Value
and Benefits
Proposal Solicitation
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© 2010 CapitalWave, Inc. | All rights reserved.
CapitalWave, Inc.
Supplier Selection
Supplier Selection Process
• Specify desired supplier attributes• Indicate the relative importance of those attributes• Understand VVA (Vendor Value Assessment)
• Delivery Selection• Reliability• Price Reputation
• Procedural Selection• Technical Service• Supplier Flexibility• Product Reliability
• Political Selection• Price• Reputation• Product Reliability• Service Reliability• Supplier Flexibility
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© 2010 CapitalWave, Inc. | All rights reserved.
CapitalWave, Inc.
Supplier Process
Supplier Selection Process
• Attempt to negotiate with Preferred Suppliers 1998 Purchasing Magazine Survey• Better pricing• Better terms
• Counter arguments• Show evidence on Total Cost of Ownership• Live-cycle Costs lower than competitors• Value that buyers receive• Superior offering over competitors
92%
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© 2010 CapitalWave, Inc. | All rights reserved.
CapitalWave, Inc.
Discussion