Top Professional Services Provider
Pricing Solutions to Advance Profitable Renewal Decisions
Leveraging Data for Profitable Renewal Strategies
A clear path to maximizing revenue and retention
The organization faced challenges in optimizing renewal pricing, balancing competitive market dynamics, and aligning internal stakeholders on data-driven decision-making. Concerns about pricing sustainability, customer retention, and margin protection created uncertainty around the best approach for structuring renewals. To address these challenges, a comprehensive market analysis was conducted, including in-depth customer interviews and a quantitative survey to assess pricing sensitivity, renewal triggers, and perceived value. The insights uncovered strategic opportunities to refine pricing models, implement strategic renewal strategies, and enhance analytics-driven forecasting, ultimately strengthening long-term profitability and customer loyalty.
Explore More Case Studies
Situation
Unlocking Pricing Potential in a Complex, Decentralized Organization
- Tax, audit, and consulting services provider serving 15+ industries
- Highly decentralized decision-making on price across 500+ decision makers
- Varied pricing guidance and targets across service lines
- Limited historical price realization (0-2%) over the last 3 years
- Fee increases were offset by larger scopes and added resource hours, resulting in stagnant or declining margins
Project Overview
Identified 4 key workstreams with near-term initiatives to enhance pricing impact, align with market expectations, and build robust measurement analytics
Inside-out Analysis
Engaged leadership to assess renewal pricing opportunities.
Developed analytics for historical price realization.
Technology Assessment
Evaluated internal pricing tools across service lines.
Reviewed existing systems and processes for optimization.
Market Research
Conducted surveys with key decision-makers to assess pricing expectations.
Analyzed responses to refine value propositions and competitive positioning.
Renewal Pricing
Identified pricing factors based on data and market insights.
Assessed renewal pricing strategies for margin growth.
Challenges & Considerations
Data Inconsistencies
Decentralized pricing data limits visibility into renewal rates.
Complex Technology Landscape
Existing pricing tools and processes require further evaluation.
Risk of Client Churn
Price adjustments may impact retention and customer satisfaction.
Approach
Data-Driven Pricing Strategies for Stronger Margins and Growth
- Conducted a market survey (n=300) targeting key decision-makers like CFOs, VPs of Audit, and Controllers to uncover brand perception, value drivers, and pricing expectations
- Analyzed historical price realization and price drivers
- Built pricing models to establish project-level rate increase targets for in-scope service renewals
- Created dashboards to visualize price variance and key drivers within peer groups, enabling informed pricing decisions
- Delivered workshops and documentation to equip partners with best practices for effective price communication
- Future: Expanded scope, including additional services and new business across company
Project Workflow
Historical Analysis
Sample Analysis Findings:
- Clients value [Company]’s services, however, that is not always reflected in price
- Trends in price changes and regional price variations are evident across in-scope service lines, highlighting the need for a deeper understanding of market dynamics
- Certain clients expect price changes, but clients do not expect the same across the company and services
Process & Technology Assessment
Learnings revealed opportunities to optimize pricing strategies, improve governance frameworks, and drive greater consistency across operations
Decision Support
Given ample support through pricing guidance and justifying data, decision makers can drive additional margin through price realization in the renewal process
- Managing Directors / Partners largely set prices based on perception of market and client expectations
- Internal tool is not being leveraged for pricing
Reporting and Measurement
Real-time measurement into price realization and leakage will allow service, solution, and location leaders to identify and address pricing outliers to drive incremental margin
- Measurement maturity differs across service lines; some service leaders have access to price realization measurement tools while other reporting is unclear
- Within all service lines, tracking of renewals is convoluted within data systems
Delegation of authority
Pricing governance that addresses exceptions and outliers will push decision makers to price profitability and give leadership additional visibility into key accounts
- Governance is limited today with little friction for submitted pricing
- Evaluation criteria for renewal pricing exists generally for some services but not others
- No tracking of exception reasons for price decisions
Enterprise-Wide Goal Setting
Clear goals for price and volume will help decision makers align pricing actions to scorecards, incentivizing price realization
- Clear price realization goals do not exist across all service lines
- Where price realization goals exist, conflation between fee increases due to scope vs. rate has led to diminished impact
Market Research
High Level Summary, Service A
Perceived as a reliable provider and clients report a high degree of satisfaction with this service. However, services are not considered as premium across relative providers.
Considered less expensive than their competitor set, especially in comparison to large providers.
Commoditized services; Winning price sensitive clients through discounting; Clients must be primed to expect increases year over year.
Switching costs are high throughout the industry; Clients have a hard time moving on from high-value providers.
Service Renewal Pricing Model Overview
Pricing is tailored to buying persona, using data-driven inputs to guide target price recommendations
Model Inputs
The pricing model integrates data from multiple sources to quantify opportunities and provide valuable pricing insights
Pricing Algorithm
Target price calculations incorporate client attributes and deal dynamics, aligning pricing with enterprise strategy
Model Outputs
Rate increase target ranges are delivered at the client-solution code level, along with decision-support and aggregated goals to drive behavior
Technology Solution
Integrate pricing recommendations and decision support into existing systems to reduce unnecessary process change and increase adoption
Pricing Recommendation Integration Sample Results
- Embed net rate increase % into existing tools for greater visibility
- Embed hyperlink to upcoming year pricing decision support for seamless user experience, including an updated pricing decision tree
- Track click-through rate of hyperlink by user to understand tool usage
- Track adoption of recommendations
Usage and Adoption of Pricing Processes and Recommendations
Measurement Dashboards: Tracked application usage, monitored recommendation adoption, and established future goal of financial impact measurement as renewals are billed
- Are users and decision makers following the desired process?
- What is our progress to completion?
- Are the recommendations being accepted?
- What solutions / regions appear to not be following recommendations?
- What is our expected revenue benefit from price and volume?
- Where are sources of leakage?
The Results
Strong pricing perception and competitive advantage across metrics
