As you know, the SRA guidelines on pricing transparency come into force soon. In this blog, we look at the arguments for and against price transparency, discusses pricing best practice and the opportunities it creates.
Let’s deal with the obvious arguments first. These are the one that spring immediately to mind. In fact, these arguments were debated in the comments section of our last legal futures piece.
“Race to the bottom”
“Service will suffer”
The natural corollary of this would seem to be that pricing favours the cheap. But does it?
All these arguments have some merit, at first glance. Yet, the negative outcomes only arise in the absence of a coherent strategy around pricing and marketing. In fact, as this piece will argue, such a strategy turns this particular challenge into a fantastic opportunity for law firms.
Why publish your pricing?
When speaking with clients and potential clients, the issue of publishing prices is never far away. Even long before the SRA turned their attention to the issue. Traditionally, lawyers have chosen not to publish pricing for a good many (good) reasons, which we’ll discuss below.
Is failing to publish pricing a mistake in today’s digital world? The ability to carry out research and shortlist potential suppliers has given web users the ability to compare products and services like never before. We expect to find the information we need in seconds – including prices. And if we can’t? We move on to someplace where we can. If there’s one thing that forms part of pretty-much every transaction, it’s “How much will it cost me”?
Pricing legal services is inherently difficult. There has been a trend towards commoditising some legal services (fixed-fees, flat-rate Wills, for instance) yet time and line" billing prevails. Although, as we know, even the best-laid costs estimate often doesn’t survive contact with reality!
Pros and Cons
Our view is that transparency will help our clients to win in competitive situations. Published pricing helps to qualify customers before you commit time and resources to consultations and a sales process.
Indeed, when consulting with our existing clients, the conversation often turns to how we can help them get fewer – but better – enquiries.
It goes without saying that improving your conversion rate for desirable business is more profitable and efficient than handling a large volume of unqualified enquiries. Having your website disqualify unprofitable enquiries is the path to a more efficient, more streamlined, more profitable business.
Why are businesses so reluctant to put prices on their website? Let's review here the pros and cons so you can make an informed decision on whether to publish your prices.
Some common arguments against publishing prices
“It’s not done in the legal industry”
Now the SRA have stepped in, it will be. And once it becomes the norm, your clients will expect it.
“Our competitors will see it and undercut us”
Lawyers seem to be acutely sensitive to corporate espionage of this sort. While there’s certainly an element of truth to this argument, there are solid arguments against it which we’ll explore below.
“We can’t exactly predict costs on any matter”
Again, this can be true and often is. However, providing a means of estimating potential costs is (arguably) better than hiding pricing from view.
"The price will drive potential customers away"
Price is what you pay. Value is what you get. As long as that equation works you’ll be fine.
You'll get fewer enquiries.
Again, probably true. However, think about the type of enquiries you want. Do you spend too long dealing with tyre kickers and clients who can’t (or won’t) pay you?
Some arguments for publishing prices
- To be part of the price conversation
Anyone buying anything instinctively looks to price as part of the decision – even though it often isn’t the deciding factor. If they can’t find price, you’re not part of the equation.
To own the conversation
One of the goals of publishing pricing is to control the dialogue around the price and value of your offering. Not only can you provide potential clients the numbers, you can control the narrative around the pricing model and the value you deliver.
In doing this, you can adduce testimonials and case studies from satisfied clients and (subtly) point out the pitfalls of instructing cheaper providers!
Remember, there is an innate sense from buyers that the low-cost provider is never the best, and there is more assumed value in a higher priced product.
To capitalise on search engine traffic.
If you begin typing searches for legal services into Google, you’ll see suggested results related to “cost” and “price”. This means people are searching for it.
You can get some quick wins by creating a pricing page and optimising it – bringing interested, purchase-ready traffic to your site.
To reduce your prices.
This might seem counter-intuitive, but a pricing page is the perfect place to capture leads by having discounts and offers. People are attracted to a discount and offering some might be the key to generating a bit more business.
To provide transparency
The very crux of the matter! As I mentioned above, your clients now expect transparent pricing. When your prices aren’t listed (or indicated), potential clients may well get scared.
In any transaction, customers want to know what they’re going to pay (and if they can afford it) before making a purchase. If there’s even the slightest fear that you may be too expensive, they won’t take it further. Again, as above, this isn’t always a bad thing – by being transparent you’re sure that anyone contacting you is serious about instructing you.
You get what you pay for.
Consciously or subconsciously, we associate a higher price with higher quality. This is why pricing is so important in building your firm’s credibility and reputation. When you publish your prices and explain the reasons why your client should pay you more than your competitor, you’re subconsciously conveying your value.
Pricing Tactics, or, how not to get dragged into a price war
There are a number of tactics you can employ to offset the fear that a visitor will arrive at your pricing page and leave.
First of all, you need to support your pricing model with a solid value statement that is represented not only in words but in the look and feel of your website. Clearly, high-end pricing on a cheap website is unlikely to win you business!
They key question is value. What do your clients get in return for your prices and how do they benefit compared to your competitors?
Don't just publish this information. Make it an integral part of your marketing. Use your website to address your customers' objections before they raise them and, before they choose a competitor.
The internet is an enormous, fluid marketplace that enables all of us to search, compare and find the best deal, whatever we are seeking. Publishing your prices is a bold statement about the value of your offering.
If you can save your ideal client the extra effort of having to ask for your prices you not only save both of you time, you’re also a step ahead in establishing trust – and that's priceless.
Finally, remember, price is just one factor in an overall "buy" decision. More important are value, quality, service, reputation and relationship. Concentrate on those and you will win business.