Monday 5th Nov, 2018
By Fiona Czerniawska.
How much do you have to discount your consulting fee rates for if you want to have an impact on buying behaviour? 5%? 10%? 20%?
Research we carried out five years ago suggested that small price cuts make no difference, except perhaps to the procurement manager who has the lonely and thankless task of demanding a price reduction just at the point when they’re going to sign the contract. Five-percent is neither here nor there to most end-users of consulting services, because their purchase decisions are based on other, more important factors. How credible is the firm they’ve chosen in this particular area? What’s its depth of expertise, or its track record of success? What’s the client-consultant chemistry like? Can they all work together in practice?
Wednesday 28th Feb, 2018
By Fiona Czerniawska.
Everyone thinks they know everything about pricing in consulting. “Segmenting the consulting industry is very simple,” a senior French consultant once told me, with one of those quintessential gallic shrugs. “There are very expensive firms, less expensive firms, and cheap firms.”
That attitude might have been just about defensible 10 years ago, but it would be difficult to justify today. True, clients’ overall sense of the importance of price, relative to other factors they take into account when deciding which consulting firm to use, hasn’t changed much. In our most recent survey of around 3,000 senior executives in six major consulting markets around the world, 6% said this was the attribute that mattered most, up from 5% in 2017. Last year, price came out as the 9th most important attribute; this year it’s moved up to 8th. Those changes are within the margin for error: What we see in our surveys and hear from clients we speak to, is that price is a qualifier, a guide to whether a firm has understood the scope and scale of a project, and a reassurance that they’re not being ripped off. While there’s clearly a minority of clients to whom price is genuinely critical, most think about price only to be able to put it on one side in order to focus on more important aspects: ‘Innovation and the ability to implement’ top this year’s list.
Thursday 11th Jan, 2018
By Edward Haigh.
In the depths of the financial crisis, organisations looked at their consulting expenditure and started asking the obvious question: What, exactly, are we getting for our money?
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