One of the most powerful strategies available to any professional service firm is pricing. Regardless of the service, the reputation of the provider, the sophistication of the buyer, the quality of the service or any other aspect of a firm’s position in the marketplace, price plays a significant role in a client’s decision to purchase a service. And, of all of the factors affecting profitability (price, utilization, leverage and margin), price is the only one that does not have a directly adverse impact on some other factor when it is increased. As a result, small adjustments in price have a major effect on net profit.

In fact, it is hard to envision a firm trying to create a strategic direction without answering three basic pricing questions: How do you charge for your services? How do you set your prices? What is your pricing strategy?

Download the full article here ยป