Tuesday 18 October 2016
Richard Burcher from Validatum ran an excellent session on the psychology of pricing in professional services, in particular the legal sector which promoted a great deal of food for thought and audience debate.
What can legal services learn from high street pricing mechanisms? Whilst ‘buy one get one free’ is not necessarily an option the psychology of how prices are presented to clients is definitely something to be reviewed. Richard did also make the point that looking at innovative pricing is not something that should just be left to the larger firms, he works with a number of smaller niche practices that are winning at innovative pricing.
In the law the majority of pricing is market driven – let’s see what everyone else is charging and let’s do something similar. But as we know there is increasing pressure to offer clients fixed fee options as they need and want price certainty, which sits alongside the age old challenge of rewarding lawyers for time recorded.
A pricing mechanism to consider was one of ‘decoy pricing’ - creating the Goldilocks effect. Create a pricing spectrum that includes a basic, superior and premium offering which offers the client the chance to have all the bells and whistles if they wish to pay for it or the minimum legal requirements to get the job done. Research shows that when offered a three tier offering the majority of people would opt for the middle superior package therefore they are lifted up through the value chain. Giving the client choice can only help continue the discussion with the client and ensure that they don’t look elsewhere for a quote.
When setting pricing strategies they need to be contextual. Does your pricing reflect your brand and market positioning? You need to have the confidence to set your pricing at the level that you pitch your expertise and added value.
Richard ended on the point that you should be confident to use the ‘no’ word it comes to being challenged on price. You have set a price that you believe reflects the work that needs to be done and expertise applied for that matter, and if challenged you need the confidence to say that this price cannot be altered.
Jenny Rennocks, Clarion
PM Forum Yorkshire Committee