Professional services firms are feeling significant pressure in these challenging economic times. Many clients are freezing or reducing budgets for external spend with consultants, accounting firms, law firms, and other professional service providers. For those engagements that stay on the books, the pressure to demonstrate value is higher than ever, and there are increasing demands for innovative fee structures.
Clients are now much more likely to challenge invoices and the amount of time spent on engagements. And with Procurement and Sourcing teams increasingly getting involved in negotiating Master Services Agreements, a category of spend they traditionally haven’t focused on, more requests for bigger discounts are coming up. Demands for fixed fee engagements are also up, and more companies are threatening to put work out to bid. In a world where most professional services providers have always felt the pain of a high cost of sales and lengthy sales cycles, these challenges combine to make for some difficult negotiations with clients. They also mean that deepening and strengthening your best client relationships is even more critical than ever. On top of that, many incumbent service providers have increasingly provided “discounts” in the face of threats to go out to proposal, further eroding the integrity of their fee structure and training clients to demand ever increasing discounts.
Vantage Partners helps professional services firms negotiate and manage client relationships in such a way that they see you as a “trusted advisor,” rather than a commodity service provider. We work with firms and their customers to minimize the costly friction that can result from poor working relationships and damaged trust that eats away at margins and can erode client service levels over time.
Some ways we work with professional services firms include:
Clarifying pricing policies and guidelines to ensure that fair fees are set for high value work performed for client
Defining their account management strategies, maximizing the value of key client relationships
Helping to create a more systematic way to think about cost and quality of service delivery, including outsourcing some services which can be more cost-effectively performed by others or offshore
Reducing write offs due to scope creep through more effective scope management capability and more effective fee adjustment conversations
Improving skills, processes, policies, and incentives for negotiating fair fees and creating more effective pricing discipline, even in professional service firms where partners have a great deal of autonomy and discretion
For more information, please contact us at firstname.lastname@example.org or 1.617.904.7816.