PSMJ’s consulting expert, Dave Burstein, PE, presents our Strategic Pricing – Maximizing Profits, Not Just Winning Work.

This webinar explains why most A/E/C firms chronically underprice their services, and how to raise your fees even in this tough economy.

Most firms price their proposals on an ad hoc basis by asking themselves this question: “How low do we need to go to win this one?”. This pricing philosophy may maximize the amount of work that firms win but it doesn’t maximize the profitability of that work. And once you condition a client to getting low fees, it is really hard to increase those fees – even if they are really low.

PSMJ’s analysis of dozens of firms’ pricing reveals that most firms underprice their services, especially their niche services. In fact, we have not found a single firm that overprices – even during the current economic climate where clients are pushing harder than ever to lower prices.

PSMJ has developed a concept we call “strategic pricing” that avoids this problem. Here’s how it works:

• Using PSMJ’s proprietary pricing model (included with this webinar), you develop the optimum long-term pricing structure for each of your markets. This is the price that maximizes your profits.
• We tell you the tactics that other A/E firms have used to successfully raise their prices – even in markets with severe pricing pressures. 
• You pick those tactics that will work best for your firm and apply them on an incremental basis, gradually working your way toward your optimum price.

Here’s a real-life example of how successful this approach can be. T. Baker Smith, a 300-person engineering-survey firm in Louisiana, adopted this approach in the summer of 2010. They set a target direct labor multiplier at 3.3 and then started applying a variety of techniques to raise it. Check out their improvement in achieved direct labor multiplier through 2011:

The webinar recording is available for viewing for only $249 (newsletter members can purchase the recording for only $149). Call PSMJ's Education Department at (800) 537-7765 or (617) 965-0055 for more information.

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