Another nugget from Seth:
“ Your sales force and your customers may scream that you need to lower your price. It’s not true. You need to increase your value. If people don’t want to pay, it’s because you’re not delivering enough value for the money you’re charging. You’re not selling a commodity unless you want to.”
From job boards to recruitment agencies, pricing is a theme central to all talent service providers. The current thinking is exemplified by recruitment industry guru, John Sumser who believes ‘low price means low quality’ and attracts the wrong type of customers.
Still, business models evolves quickly and one of the most thought provoking piece this year, from Chris Anderson, is the new business of ‘FREE’‘. Increasingly, companies are offering their service or product for free or at ridiculously low price, but are making money elsewhere.
There are reasons to believe that the talent service industry will start to embrace new pricing models. Nowhiring.com.au allows free job postings , instead charging for associated services like screening and CV database access, is one example. We have seen new pricing models in the recruitment industry, and perhaps it can be argued trends like RPOs and in-house recruitment are new pricing methods as much as they are a new way of delivering service or an attempts at ensuring process efficiency.
Be prepared, to see a range of new pricing models in the talent service/products space.
So, here are a few questions – is your current price reflective of the value you provide? Is pricing a good mechanism to differentiate yourself? If the service/product you are selling is perceived to be a commodity, how would you stand out?