Though many firms walk away from low price projects, you will always
have clients for whom you must take on a project even though you cannot
get the fee you want. To help you tackle the go/no go decision on these,
answer these twenty questions:
1. What are our overall firm objectives?
2. What are our current and projected mixes?
3. How flexible is our pricing environment?
4. What do we want the price to convey?
5. What will it cost to produce this job (salary/overhead)?
6. How does our cost structure compare to competitors'?
7. What portion of cost is fixed? Variable?
8. How important is price to our client?
9. How much selective demand can we create?
10. Where is this service on the service life-cycle curve?
11. What non-price strategies can we use to redefine this service?
12. How many other firms can offer this same service?
13. How much will raising/lowering price affect profitability?
14. What are the client's time requirements?
15. Is providing this service essential to securing further work with the client?
16. Are we providing special expertise?
17. Where is the location and client?
18. How much will it cost to get this job?
19. Are there factors that may affect our payment?
20. Do we have the financial resources to sustain a loss?
Further, always negotiate price last. And on a price sensitive
project, try to negotiate a "success" fee if you achieve something
significant for the client/project, and always clarify how you are to be
paid for changes during the course of the job.
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