There are many reasons to hire a pricing consultant or specialist price consultancy to support you on your pricing journey. These reasons may include assessing the suitability of your current pricing strategy through a pricing audit, identifying specific pricing changes for margin improvements, modelling the business impact of an alternative pricing approach, and much more.
Pricing specialists are great at supporting business transformation, as they can bring a wealth of knowledge both from within your market, and also “borrow” ideas from complementary markets.
Whatever your requirement, it’s important to select the right price consultants for your business. Do you remember being told by your parents or teacher to “make sure you select the right tool for the job”?! This is one of those moments.
In this post, we look at some of the questions you should be asking during the selection process to ensure you find a suitable match.
1. What is your speciality?
We all have our own elements of uniqueness, whether you’re good at scoring goals on the football
Some are excellent at carrying out market research, others are great at number crunching to identify where margins are being given away unnecessarily through over discounting or under-pricing; others are excellent at running pricing tests, or ensuring you select the right pricing tool for your business. Make sure you find out what each pricing firm is known for, and seek case studies to reaffirm this.
2. What is your size?
Alternatively, you may need to get to the bottom of a challenge very quickly, and therefore a larger firm that operates a “bench” of available consultants may be the answer (a bench is where a consultancy looks to always have some employees unassigned on a rolling basis to be able to react quickly to customer requirements).
3. How are your clients better off after a project?
Pricing is one of those unique disciplines where, when you get it right, it can produce very real benefits to a business in terms of increased revenues and/or increased profits. If your business is looking for either of these, ask the consultancy what their track record is.
They may not be able to provide you with financial results by specific project, but they should be able to tell you what their average results are for, say, the last year or more. These can then be used as a tangible comparison between pricing consultancies.
4. What’s been your biggest failure?
Most of us like to focus on the positives, but we can also learn from failure, and I’ll bet that every pricing consultant has had a project that has gone sour, or at the very least not returned the results that were expected.
The key here is to assess their ability to learn from any mistake and what they have done to try and ensure it doesn’t happen again. You don’t want the same thing to happen to your business after all!
5. Can I speak with a reference customer?
Ask for a list of references as you near the end of your decision process. You may have already made your decision, or you may be looking to choose between the final set of options, and this is an excellent way to receive a non-biased opinion of just how good the pricing firm you’re looking to engage with really are.
Be considerate to the other customer who has taken time out of their busy day to discuss their experiences, as they’re unlikely to be benefiting directly from the discussion. This is also another excellent way to expand your pricing network and to gain new ideas from others in a similar boat to yourself.