Professional Services

Pricing Challenges and Opportunities

Professional Services include temporary work agencies and consultancies (auditors, lawyers, strategic consultants, IT consultants). The economics of these industries are different . Fixed costs are traditionally low for temp agencies which do not have their resources on payroll, whereas they are high for consultancies which do have them on pay-roll. However, all professional services face similar types of pricing challenges :

  • they manage a large number of resources (typically from 1.000 to 1.000.000), of customers (1.000 to 100.000) and offices (up to 5.000)
  • they operate in B2B environments and must maintain long-term relationship with their customers, especially key accounts whose share in revenue is increasing.
  • their customers have different price sensitivities.
  • they experience seasonality in demand and many have opportunities costs when they cannot serve a customer due to unavailable resources.

For these reasons professional services can substantially improve their profitability by adopting Intelligent Pricing technology. This is especially the case in a downturn situation when customers pare their workforce and competition on price increases. Intelligent Pricing allows professional services to optimally match supply and demand.

  • On the demand side Customer requests and their response to proposals are systematically analysed and modelled. This provides a better knowledge of qualifications requested, resources proposed by the enterprise, suggested prices, delay in response to the client, competitive offers, result of the negotiation (win, lose) and cause of lost business (price, resource unavailable), and time allocated to process each request.
  • On the supply side Resources are allocated to customer demands based on their incremental and opportunity costs and prices are fine tuned to reflect these costs, as well as customer price sensitivity, levels of service, and long-term relationship objectives with the customer

Benefits from Open Pricer technology

  • optimize global contracts with key customers
  • increase customer satisfaction and loyalty based on an optimal allocation of resources to customer requests
  • response with precise quotes to one-time requests
  • manage sales promotions when supply is higher than demand
  • pro-actively manage workers contributing to their increased loyalty to the firm
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