Uncovering Lost Revenue Opportunities
By Tim Williams
It’s a popular belief among agency executives that the best opportunity for new business is among current clients. Sometimes that can take the form of new projects and assignments, but sometimes it can just mean doing a better job of capturing the income opportunities you already have.
Here are 10 key questions to help uncover more revenue opportunities by making pricing (not costing) a core competence of the firm and getting paid for the value you create rather than the hours you work:
How can we help all associates understand the firm’s basic value proposition and how we create value for our clients?
What capabilities and tools do we need to put in place to help us better determine and measure value?
How can we do a better job of scope management by identifying and re-pricing work that’s out of scope?
Have we appointed senior executives to be in charge of pricing (not accounting) to ensure that we are pricing on purpose, according to the value received by the client, not the costs incurred by the firm?
What changes in process and procedures do we need to make in order to centralize pricing decisions at the firm?
How can we help keep the firm focused on effectiveness instead of just efficiency? Could we establish effectiveness tools, reports, metrics in place of traditional time-based efficiency tools and metrics?
How can we trade the time we would otherwise spend reviewing, modifying, explaining and defending our fees and invest it upfront in defining what constitutes value in the first place.
What are the main factors holding us back from discussing Scope of Value before Scope of Work?
What are the possible holes and gaps in our pricing and billing system where we might be undercharging or not charging at all for services and value delivered? Do we have a bullet-proof system of checks and balances to make sure this doesn’t happen?
Could we conduct “after action reviews” at the end of major client assignments and relationships in order to assess what was learned and how we could have priced it better?
Remember, just because you may have a good cost accounting system doesn’t mean you have a good pricing system. These are two different skill sets, and agencies must become as proficient in pricing as they are in costing.
