Law firms across the globe talk extensively in their tenders and bids about services and products they provide in addition to the price they are charging for a particular matter. These "value adds" can be as wide ranging as education of in-house teams, information services and "free" advice.
My question is: "Do clients perceive these services as adding value or is there an expectation that these now form a mandatory part of our service offering?"
A very good question Lee. You would appreciate better than most that this is a pricing question because the issue of value is only relevant in the context of what the client is being asked to pay. The first question to ask is 'what is value?' I hope it will be obvious to most that this will differ from client to client. Value, like beauty is in the eye of the beholder.
The one thing that all clients will have in common is a shared perception that they are receiving good value if their perception of the benefits is equal to or greater than the cost., Conversely, poor value as perceived by the client is a set of deliverables and outcomes which do not in their subjective opinion equate to or exceed what they are being asked to pay.
What law firms must understand is that even throwing a whole lot of "value adds" at the client or a prospective client may achieve little if anything if the client doesn't actually value, need, or see any particular benefit in those add-ons. On the contrary, a firm can go to great lengths and considerable expense with all the add-ons and still miss out on a client or a piece of work. Why? Quite simply because the firm failed to invest enough time and effort in trying to understand what the client truly values and needs, what they are prepared to pay modestly for, what they are prepared to pay extravagantly for and what they are not prepared to pay anything for.
I have coined the phrase 'Shrink-wrap Pricing' to try and create the sense that the price and value proposition should be customised for every job and every client and in each case, it should be a perfect fit. Only by taking this kind of approach will more firms begin, to use a cricketing analogy, to find the sweet spot on the bat.