The Price is Right... Right?

Today we're shifting focus to one of the 4 p's of Marketing - Pricing. In sticking with the recession motif, I wish to point out that a company's pricing strategy becomes even more critical in a down market.
There are few organizations that are not price sensitive these days and considerable power has shifted to the customer / purchaser. When the market tightens, demand drops and competition stiffens. This is why it is absolutely critical to (Tip:) consider a customer centric pricing model, whereby revenue is earned when value is delivered to the client.
Plaintiff's lawyers have a highly customer centric model - most of you do not charge unless claimants win. This makes it very compelling for a client to come to you and creates great disincentive for a claimant to deal directly with the insurance adjuster. However, I predict that 1/3 contingency arrangements on 8 figure verdicts may eventually be history, as the Internet will eventually connect informed claimants directly to the results of the top firms in a particular area of expertise and those firms will have to duke it out for the right to represent that particular client.
Yes, firms compete for clients today, but many claimants select firms from one tv ad or one friend referral. Sophisticated consumers will eventually have access to the type of data that will enable them to make much smarter and more efficient purchasing decisions on the type of firm they select and yes, that $10 Mil. contingency on a $33 Mil. verdict that cost you only $1.5 Mil. in litigation expenses and overhead will become less and less common, as a broader pool of competent plaintiff's lawyers and increased technology will ensure tighter competition.
If you are a defense firm and would like to differentiate yourself and possibly win over a new client, how about putting more skin in the game than your competitors? Consider making a small percentage of your fees contingent on particular agreed upon success metrics or "key performace indicators" - just make sure you do not assume too much risk that is outside of your control.
If you are a vendor, make a note of the companies offering similar products and services. Ask yourself questions such as: how are they different, why is it that they are pricing this way, is it important for me to be better on price, or do I have sufficient competitive differentiators that this is not necessary.
Lastly, always keep an open line of communication with your customers. If your product or service is not priced appropriately, they will typically let you know it.

Staying Afloat in Rough Waters

"So, first of all, let me assert my firm belief that the only thing we have to fear is fear itself—nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance." - FDR

Economic experts are predicting that we are about to enter a period of recession that is expected to last for at least the next 12 months. Inevitably, many undisciplined investors will react and move long term investments out of equity and into conservative investment when the market bottoms out, only to miss the ultimate rebound.

There is little difference where business owners and marketing are concerned. In fact, when the going gets tough, the smart steal business away from competitors.
Challenging economic, or down business cycles, actually help sort out inefficiencies in the marketplace.

For example, if a particular defense firm has a relationship with a manager in an insurance branch office, they may have had the luxury of being insulated from competition when markets were strong. Now, the same company may have tighter cost contraints from home office that will force that manager to consider shopping multiple firms that deliver the same, or greater value at more competitive fees.

A vendor that offers cost management solutions to law firms may find that their offering is a much greater business priority today than it was just a year ago and they may actually experience a reduced sales cycle.

Consider the fact that many of your competitors will decrease their marketing spend and there may be far less marketing clutter, as well as decreased demand, which means your dollar may take you much further. As always, look for opportunities where you will get the biggest return and bear in mind that the legal world is not impacted by discretionary spending like other industries are.

Remember, the markets will eventually improve, and what affects your business affects everyone else's also. Tip: The real battle is against other firms, not the market and will be decided by which company can promote itself better, offer more favorable pricing and deliver a superior product and/or service to its clients.

The auto industry serves as case in point and I will rest my case here.