PATRICK JOHANSEN

Patrick Johansen, CPP
THOUGHT LEADERSHIP

Winning Pitches & Proposals: Offering Multiple Price Options

As a former Business Development professional, I know the challenges of creating pricing proposals when responding to RFPs and to pitch requests. As a Pricing professional, I now know that the practice of submitting a single price diminishes success and, often, profits. Why? Buyers want choices. Without multiple price options, firms are setting themselves up for failure. The following will help law leaders avoid that failure.

As a former Business Development professional, I know the challenges of creating pricing proposals when responding to RFPs and to pitch requests. As a Pricing professional, I now know that the practice of submitting a single price diminishes success and, often, profits. Why? Buyers want choices. Without multiple price options, firms are setting themselves up for failure. The following will help law leaders avoid that failure.

Continuing to pursue the status quo—offering only a single price—carries several consequences. First, the status quo does nothing to help your firm improve its low success rate with pitches and proposals. Second, this strategy ignores one of the fundamental needs of buyers: options (aka choices). Third, a single price encourages buyers to search for alternatives. Fourth, a single price encourages buyers to negotiate.

Law leaders can move beyond the status quo (the Single Option), and embrace a multiple price option strategy. The two options below will improve your firm's Pitches & Proposals (P&P) Pricing:

• The Double Option: Options give buyers choices; they also provide context, which is critical to the decision-making process. Hotels, for example, offer regular rooms and concierge rooms. The choices help buyers decide the Price-Value tradeoff. In adding a second option to your P&P Pricing, your firm could continue to offer an hourly rate (a type of time-based fee arrangement) and add a fixed fee (a type of budget-based fee arrangement) or a success fee (a type of performance-based fee arrangement). When creating these options, be sure to mix the types of fee arrangements and to be very clear about the scope.
• The Triple Option: Offering three options—good, better, best—is standard in many industries, such as automotive (Mercedes C/E/S) and airline (Economy/Business/First-Class). Also known as versioning, the Triple Option adds a premium to the firm's services and brand. This option is best employed with Practice Group P&P Pricing. For example, patent prosecution can offer services based on simple/regular/complex science, or litigators can offer services based on basic/full/aggressive representation. When employing the Triple Option, be sure to match your value to each level and have strong fences among the options.