Cost, Price, Profitability…Yes.
Since the Great Recession, law firms have been focused on reducing Costs. With a push from clients, the focus shifted to Fee Arrangements. In recent years, the focus has been on Profitability.
Where is the focus on Pricing Strategy?
IT’S TIME FOR PRICING STRATEGY.
Pricing is a powerful tool.
Pricing drives firm revenue (unlike the other three Marketing Mix options). Pricing improves firm profits (unlike the other three profitability levers). In short, Pricing Strategy can be an economic engine.
Pricing is more than numbers.
Pricing is focused on three objectives: Positioning, Purchasing, Profitability. Marketing creates Positioning; Business Development supports Purchasing; Finance drives Profitability. In short, Pricing Strategy requires collaboration.
Pricing is a competitive advantage.
Pricing is proactive, value-based, and collaborative across all departments. Key elements of success include value creation, pricing function, value communication, and price negotiation. In short, Pricing Strategy is the beginning of a profitable firm.
“If you do not have a well-defined pricing strategy, then who, specifically, is setting your prices?”
-Reed Holden, Holden Advisors