Record Associates

Value, advantage and investment:  

decision-making in 2010

17th December 2009
Contents
value and investment decisions
comparative advantage

Value and pricing

 

With a clear, client focused value map we are better able to link pricing to our offering.  It reduces the risk of under-pricing or over-pricing work and supports strategic decision-making by linking derived profits to the profitability benchmarks we aim for from each and every market we work in.

 

To a prosperous and profitable 2010.

What we do
 
Record Associates helps PS firms to identify, develop and articulate sources of value through:
 
 
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Perceptions of value are guided by personal preference.  The downturn has seen buyers re-examine the relationship between cost and value by focusing on what value means to them.  Buyers are more likely to consider 'experimentation' or switch suppliers with the consulting firm Bain reckoning that 18% of value switchers will never return to their previous suppliers.
 
In the professional services sector, one manifestation of this focus on value is the Association of Corporate Counsel's "Value Challenge" - a peer review mechanism to gather and share feedback on legal advisers used by US-based General Counsel.  The assessment criteria used: 
 
  • Understands Objectives/Expectations
  • Technical Expertise
  • Responsiveness/Communication
  • Predictable Cost/Budgeting Skills
  • Efficiency/Process Management
  • Results Delivered/Execution
 

How significant is it that these measurement criteria (notably the last three) are different to the typical strategic positioning of most professional services firms?  Should we use these criteria to develop strategy, investment decisions, competitive advantage and pricing? 

Value and comparative advantage

 

If these yardsticks signify a new savvy amongst buyers, we can use them to identify our comparative advantage and value.  Our challenge is to provide better value than competing firms in the areas deemed most important to clients.  We can map competitive positioning against direct alternatives (eg IPO service in the AiM or project management in the public sector) to better understand the perceived positioning of our firm. 

 

Click here for a value modelling map 

 

This approach highlights where we have strengths and importantly what buyers are prepared to pay for.  It identifies value accelerators and unique examples of our differentiation.  Critical information to enable strategy to be developed.

Value and investment decisions

 

Conversely this method also clarifies "me-too" offerings and perceived weak points. We can use value assessments as a way to guide our investment decisions at a practice, service line and firmwide level.  By highlighting areas which provide the highest return on investment we actively reduce the inherent risk of innovation within our organisation.