Ask VeraSage: Creating a Pricing Cartel

Chris Foster, one of our Trailblazers, asks the following question:

Hi Ron

I've been running your recorded Value Pricing Session as presented at the Principa 2020 conference in Sydney this year over the last 2 months.

I have a regular core group of people turning up at each session.

I believe we are really getting value from these sessions, based on the feedback from the team members.

I suggested that we set up a working group to discuss and develop these concepts further and there was an enthusiastically positive response as the teams likely involvement.

My question is: how should I structure the direction of this working group so that it will result in something meaningful rather than just a talkfest. And what resources do I need to access?

Thanks again Ron for your inspirational leadership in the profession—I can see apositive impact on our team attitude just from the Lunch & Learn sessions and the active discussions held at the end.

Regards

Chris

Hi Chris,

Glad you're getting value from the Principa Value Pricing session.

I'm a bit confused by your question, since I don't know how your pricing is structured. We like to see a pricing cartel (panel, council, call it what you will) established in the firm, which has primary responsibility for pricing all engagements. These people are chosen, usually, by the leaders of the firm based on their demonstrated pricing skill. They are usually fairly easy to spot; they are the ones who view pricing as an enormous opportunity, are intellectually challenged by it, and are willing to continuously learn more.

The cartel is also responsible for educating firm members on change orders, scope creep, FPAs, etc., as well as sharing pricing successes and failures. They also conduct After Action Reviews on all major engagements to learn what could be done better—both for pricing and customer service—next time.

So I guess I'd like to see a pricing cartel emerge from your Lunch & Learns, and maybe even an appointment of a CVO.

Once you've appointed your pricing cartel, we have a CVO reading and resources list I'd be happy to share with you.

I hope that answers your question, Chris. Keep up the great work.