My pricing nightmare
...and how to avoid keeping your clients up at night
Can you guess my least favourite type of pricing in the world?
Tick tock.
Time is money.
My biggest pricing nightmare is sitting in the back of a black cab stuck in traffic, watching the meter tick over. You’re not getting any closer to your destination. You’re less and less likely to make it on time. And yet the price still goes up!
What’s more, you don’t know how much it’s going to cost until you get there. And even then they apply an unexpected ‘tariff’ based on who-knows-what that makes the meter price jump even higher.
So let’s look at how recruitment pricing measures up against the nightmare of a taxi meter. Surely we can’t be any worse… can we?
What we do right…
The good news is we don’t sit our clients in front of an electronic box with the price on it and force them to watch it go up as they work with us.
Our clients also feel like they have a level of control over the price, because they get to negotiate on the rate at the start of the project. Unfortunately for us, they tend to negotiate pretty hard.
On the other hand…
However, this feeling of control papers over the reality of the situation.
Why?
The final fee can vary wildly. If we’re agreeing a 20% rate on a £50-70k salary - and the client may well offer more for the right candidate - then there is very little certainty about the actual price.
This uncertainty highlights a disconnect between what’s good for us and what’s good for our clients.
Just as we might question whether a taxi driver is actually taking us the quickest route when we can see they get paid more for a longer journey, our clients might question whose interests we have in mind when we’re recommending a candidate with high salary expectations.
Let’s reset the meter
Many recruiters look to solve the problem of uncertainty by offering fixed fees, either set in stone on the rate card or calculated using percentage of salary for each role to find a suitable level to fix at.
But if you want to turn the problem into an opportunity, it’s worth addressing the underlying issue. If you can turn uncertainty and doubt into the feeling that you’re perfectly aligned with your client on getting the best solution for them, then you become their trusted advisor throughout the process.
So if you want advice on how to align your pricing strategy with your clients’ objectives, simply reply to this email and we can make sure your approach isn’t giving your clients nightmares.
Jon
PS. Just like me sitting in the back of a taxi, if your client isn't certain how much they have to pay then they're not going to enjoy the ride.
So if you want advice on how to avoid nightmare pricing, simply reply to this email.