Building the foundations for great pricing
If you don’t know where you’ve come from you won’t know where you’re going
I spend all my time telling recruitment leaders how important pricing is, and even I’m surprised by the number of recruitment agencies making pricing their priority for 2022/23.
As with any big change project, one of the key first steps is to set clear benchmarks of where you are now with your pricing. This helps you to review the project after 12 months, and you can also use good benchmarks to see where certain people and teams are ahead of the curve, or where they need more support and encouragement.
Here are three tips on setting clear benchmarks.
A good benchmark is not a brief snapshot in time.
Recruitment pricing from 2010-2019 changed very little for most agencies, then prices fluctuated massively over the last two years.
If you accidentally set a benchmark at the depths of the pandemic you may think your project has made huge gains… but in reality it’s struggling to get off the ground.
I now analyse 3-4 years of pricing data at the start of a big project to make sure I’m setting benchmarks based on realistic expectations.
A good benchmark is specific.
If you rely on a single average across your whole business, you’ll miss important details that make your project a success.
A few years ago I spoke with a director whose board had given him the task of raising the average price across the whole of his business. Within two weeks, they’d won a huge new client… at discounted rates to reflect the volume of roles. Because the director’s goal was too broad and didn’t account for volume discounts, that was the end of his project bonus that year!
Finally, you need to make sure your team agrees with the benchmarks you’ve set.
Big changes always have their rocky moments, so if someone is struggling to make the change it can be easy for them to challenge the way the project is set up.
If you’ve got buy-in from everyone in your business - from your board to your consultants - then you will find it much easier to work together in solving problems along the way.
So if you’re making pricing a priority for the next 12 months and would value a one-to-one consultation on your objectives and opportunities, simply reply to this email with the word ‘PRICING’ and I can help you get started.
Jon
P.S. The key to a successful pricing project is setting strong foundations, and a clear benchmark is only one part of these foundations.
If you want to talk through the ways you can set a strong foundation for your pricing change, simply reply to this email with the word ‘PRICING’ and I can help you get started.