“If you are having a rate conversation you are having the wrong conversation.”

• The recent PIE Growth Leaders Exchange focused on the topic of pricing strategies and challenges faced by professional services firms in the current market environment. The participants shared their insights and experiences on how they approach pricing, what factors they consider, and what challenges they encounter.
• Participants discussed the need to align pricing strategies with market conditions and client expectations. Some participants advocated for value pricing, which is based on the perceived value of the service to the client, rather than the cost of delivery. Others preferred cost-plus pricing, which is based on the cost of delivery plus a margin. The conversation suggested an overall shift from cost-plus pricing to value pricing. This shift is significant as it means companies are moving away from simply adding a standard markup to the cost of their services or products. Instead, they are pricing based on the perceived or estimated value of their offerings to the customer.
• Market conditions are playing a significant role in these pricing decisions, indicating that companies are becoming more responsive and adaptive to changes in the market. Furthermore, companies are exploring alternative pricing models, such as performance bonuses or equity in partnerships. These models can provide additional incentives for performance and align the interests of the company with those of its clients or partners. The participants agreed that there is no one-size-fits-all solution, and that pricing strategies should be tailored to different services, geographies, and clients.
• Another highlighted theme was the potential of subscription models, which offer recurring revenue streams and incentivize long-term client relationships. Some participants shared their success stories of implementing subscription models for certain services, such as advisory, analytics, or cybersecurity. They noted that subscription models require a clear value proposition, a high level of trust, and a flexible delivery model.
• The group also discussed variation in pricing governance across firms. Some participants reported having a centralized pricing team that oversees and approves all pricing decisions, while others said that they give more autonomy to individual business lines or regions. One member made the point that rate cards or fixed prices can limit the negotiation space and undervalue the solutions, so it is better to avoid sending them to clients and instead focus on the value proposition and the outcomes.
• A few members also highlighted success in integrating a discretionary bonus that clients can elect to pay following the completion of a project. The bonus may be based on performance criteria or subjective review of the project team and outcomes delivered. Members using this practice in pricing noted that clients often elect to pay the bonus, even though it is entirely optional. The members also noted that while this strategy has been effective in securing additional revenue, it is not a strategy applied unilaterally across the firm.
• Finally, the group discussed how to price new service lines, with some firms targeting smaller clients for initial offerings and others opting for larger, brand-establishing clients. The participants agreed that pricing new services can be challenging, as there may be no established benchmarks or competitors in the market, and that the pricing strategy should reflect the value and differentiation of the service, as well as the client’s willingness and ability to pay. Some participants shared their examples of pricing new services, such as offering lower prices or free trials to smaller clients to gain feedback and testimonials or charging premium prices to larger clients to establish the brand and reputation of the service.
• Members noted the importance of carefully curating the initial client experiences with new services, as they can have a significant impact on the future cost and sales efficiency of the service. The participants recognized the value of creating positive and memorable client experiences with new services, as they can generate word-of-mouth referrals, testimonials, and repeat purchases. They also recognized the challenge of ensuring high-quality and consistent delivery of new services, especially when there may be limited resources or expertise available. Some participants shared their best practices for curating the initial client experiences, such as selecting the right clients and projects for the first engagements, involving senior staff and experts in the delivery, and soliciting feedback and improvement suggestions from the clients.

• The PIE Growth Leaders Exchange also discussed client reference strategies, or the ways firms leverage their existing or past clients to provide testimonials or referrals to potential clients. The participants shared their views and practices on how they use client references in their proposals and pitches, and what benefits and challenges they experience.
• One of the main themes that emerged from the discussion was the consensus on the effectiveness of including client references in proposals, with some firms even providing direct contact details to potential clients. The participants agreed that client references can enhance the credibility and trustworthiness of the firm, as well as showcase the value and impact of the service. Including references and their cell phone numbers directly on proposals, with client permission, makes a powerful statement. The practice demonstrates confidence and transparency, and that it can differentiate the firm from the competitors. While nobody usually calls the references, it still has a significant impact on the decision-making process. The group agreed that client references should be relevant and specific to the context of the proposal, and that they should be obtained with the client’s permission and appreciation.
• Another theme that was discussed was the approach of proactively reaching out to references, rather than waiting for potential clients to contact them. Some participants said that they proactively contact their references and ask them to share their positive experiences with potential clients, either via phone, email, or video. They said that this practice can help to create a stronger impression and a more personal connection with the potential clients, as well as to proactively address any questions or concerns they may have.

“Quality activity begets qualified pipeline. We’re focused on ensuring that the activities we track align with our goals and eventually lead to sales.”

• In addition to pricing, the group also addressed the topic of accountability in pre-revenue activities, such as business development, proposal writing, and pitching. The participants discussed the challenge of ensuring continued business development activities and holding individuals accountable prior to revenue generation, especially in a remote or hybrid work environment.
• One of the main themes that emerged from the discussion was the need to implement training programs and set pre-revenue metrics to drive behavior change and increase business development tenacity. Some participants shared their examples of training programs that aim to enhance the skills and confidence of their staff in business development activities, such as prospecting, qualifying, and closing. Examples of pre-revenue metrics used to measure and reward business development performance include number of leads, number of meetings, number of proposals, and win rate.
• Another theme that was highlighted was the effectiveness of random and regular check-ins on market-facing activities. Some participants said that they conduct random and regular check-ins with their staff to monitor their progress and provide feedback and coaching. They said that this practice helps to keep teams engaged and accountable, as well as to identify and address any issues or challenges early on.

“We’ve just rolled out a new program where all your activity has to make its way into Salesforce. To make it really easy on people, we’ve said you just keep managing your calendar like you always do. But you categorize it. Was it a BD meeting? Was it a networking event? We’ve made sure that only relevant business activities are tracked in Salesforce, and our IT team handles the integration on the back end.”

• The PIE Growth Leaders Exchange also addressed CRM management and activity tracking to report business development activities, such as meetings, calls, emails, and proposals. The participants discussed the challenges and opportunities of using CRM systems, and what best practices they follow.
• Members noted the need to find efficient ways to track and report business development activities using CRM systems, with some automating the process via calendar categorization and data entry outsourcing. The participants acknowledged the importance of having accurate and timely data on business development activities, but also recognized the difficulty and reluctance of staff to manually enter data into CRM systems. One executive shared that staff are required to categorize calendar entries according to the type of activity, such as BD meeting, networking event, proposal writing, etc., allowing the firm to automatically capture the data from the calendars and integrate it with the CRM system, without requiring any additional data entry from the staff. This practice has improved the data quality and the staff compliance, and the firm can now report on the business development activities more accurately and efficiently.
• Members underscored the need for accurate data capture to better understand and report on institutional relationships and channel partnerships. The participants emphasized the value of having a holistic view of the relationships and interactions with clients and partners across the firm, and the ability to report on the revenue and profitability of each relationship and channel. They also emphasized the challenge of ensuring that the data capture is consistent and comprehensive across the firm, and that the CRM system is updated and maintained regularly.

“Just giving someone access to a dashboard doesn’t mean they are leveraging that data.”

• The group highlighted the need for effective reporting packages that track activities, opportunities, and wins over time, emphasizing the importance of real-time data as well as historical snapshots.
• Challenges include ensuring accurate and ongoing data input by teams and leveraging the data by regional leaders to think like sales or BD leaders rather than just seller-doers.
• A few growth leaders shared plans to hire data analysts to gather data from various systems and present it using tools like Power BI and Tableau. “We publish a monthly report that shows what’s spiking right now, often tied to a certain initiative, like last year with recession talks and high inflation, we highlighted services that made sense in that economic environment to better inform and equip our sales teams with ideas and tools for growth.”

“Intentionally, I don’t want a sales culture. I want a growth culture. With the seller-doers, it doesn’t play out the same way.” 

• Participants discussed the distinction between creating a sales-driven culture and nurturing a growth-oriented culture within their organizations.
• The consensus leaned towards promoting a culture of growth, where business development is aligned with strategy and service rather than aggressive sales tactics.
• Strategies include focusing on activities that lead to growth, such as cross-selling, and developing a supportive structure for both seller-doers and professional salespeople.
• Accountability continues to be a challenge in creating a well-run growth team. As one leader mentioned, right now we are just “sharing not should-ing,” but the need to drive towards clearer expectations and accountability around the “should” continues to be important.

• The importance of training seller-doers to engage in BD activities and overcome challenges in client interactions was highlighted.
• Various methods such as recording pitches, mock pitches, and office hours for questions were shared as effective ways to build confidence and proficiency in BD.
• The use of tools like Salesforce cadences to schedule and remind seller-doers of follow-up activities was also discussed. A few leaders shared the need to develop BD training from the inside out, drawing on the expertise of your best rainmakers to drive a culture of growth distinct to your organization.

“We had a process where short-term compensation, akin to a commission-like structure, was placed on cross-sales, and the timing issue was handled by making a cash payment to the originating managing director when 80% of the revenue had been collected.”

• Debates arose around the timing and method of compensating sales activities, particularly the tension between immediate rewards for salespeople versus delayed compensation based on revenue collection.
• One executive asked how you manage one person getting the credit for a sale and another having the relationship. Another executive argued that some sales leaders spend too much time figuring out who gets the credit, rather than focused on just growing the accounts.
• Several structures were shared, including a 3, 2, 1 model, with part of the commission paid upon deal signing and the rest based on revenue collection over time.
• The concept of activity bonuses to support new salespeople during their ramp-up period was also discussed.

• Participants discussed leveraging technology like CRM systems to manage and track BD activities, reporting, and follow-ups.
• Challenges include ensuring accurate and timely data entry by teams and using the CRM to its full potential to drive growth activities.
• Suggestions included the use of sales enablement tools within CRM platforms to automate and prompt BD activities and follow-ups.

“We launched something at the beginning of the year, called ‘See something, do something.’ Basically, we’re trying to teach everybody that they’re in business development. The fact that my staff sees more than the partners do means they know where the problems and the holes are. So, we’ve created an incentive program, and we’re really trying to make sure they understand that sales is not a bad word.”

“We have an institutional kind of immersion here to sales and marketing and partnering outside of the business. Literally, I feel like my job is that I sell every day to change the hearts and minds of folks in order to kind of adopt the best practices that we probably all know that we should be doing.”