Pricing strategy for market-leading IT agency

New Pricing Strategy for 7N´s High-End IT Consultants

7N´successful business model of providing high-end consultants, based on a cost-plus pricing strategy, was under pressure from increasing competition in the market and increased push-back from customers to existing pricing. Accordingly, they wanted to anchor a new pricing strategy in the market, in which customers reflected prices.

Our assistance

Zangenberg Analytics provided market knowledge and recommendations for a new pricing strategy, providing 7N with an optimal position in the market vis-à-vis pricing. By providing national price benchmarks for each individual category of consultant, categorised according to skill and seniority, we were able to ensure competitive prices for the client in the comparable segments in the Nordic region.

In many cases, the capacities of 7N’s consultants exceeded the market’s expectations for the priced consultants. This, therefore, justified price increases for large parts of the rate card.

We also ensured that the overall pricing could tally with the client’s expectations by calculating a market-compliant volume discount adapted to 7N’s selection of IT consultants.

Results

• 7N gained market knowledge to increase earnings, while positioning itself strategically in the market
• Assessment showed that 7N could increase the prices of some consultants by up to 36%, while remaining competitive
• 7N received recommendations in terms of where to highlight the skills of their consultants and increase their general seniority premium, given that the seniority of many of the IT consultants was not being fully compensated in relation to the market’s valuation