How progressive is your firm when it comes to pricing?

Using survey software, distribute this brief questionnaire to your management team to get a snapshot of where your firm stands on the pricing continuum.  The more progressive you are, the lower the score.

Instructions: Rate these questions based on the following scale:

             1     2     3     4     5     6     7     8     9     10

Strongly Disagree                                    Strongly Agree

 

  1. Generally speaking, our management team doesn’t fully understand why a change in compensation methods is important or necessary.
  2. Adopting a value-based pricing approach is difficult because we aren’t really willing to walk away from a new business prospect who insists on a time-based approach.
  3. Our clients are too conventional to consider anything but compensation based on hours.  They have a procurement mindset that’s more interested in reducing costs than increasing value.
  4. We still haven’t put the discipline in place to focus on specific desired outcomes before jumping to Scope of Work. Things move too fast around here to spend much time focused on Scope of Value.
  5. Our senior leaders and managers don’t yet have the knowledge, skills, or tools to be able to effectively practice value-based pricing.
  6. Our agency would have a very difficult time entering into a compensation agreement that involves not just a potential upside, but a potential downside.
  7. The prevailing belief at our firm is that it’s unwise or impractical for agencies to enter into risk-sharing agreements with their clients because agencies have little to no control over business outcomes that aren’t directly related to advertising.
  8. Value-based agency-client relationships are impractical because there’s too much disagreement over what constitutes value and the metrics that should be used to measure a brand’s success.
  9. Our margins are already too thin to be experimenting with other forms of compensation.
  10. We are too deep into the “work for hire” model to seriously evaluate the potential of developing and owning some of our own intellectual property.

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