Answer 3 Questions to Address Client Fee Sensitivity

Answer 3 Questions to Address Client Fee Sensitivity

For professional services firms, determining the appropriate fees to charge is an ongoing effort based on broad economic factors, costs, local market factors and the competition. In recent years, as clients face pressures to reduce costs and improve efficiency, professional service fees have come under more scrutiny, with one-third of B2B purchasing decision-makers saying price is their primary influence.

However, increased fee sensitivity doesn’t automatically mean your fees are too high. If you’re getting more fee-related questions from clients, consider these three questions to determine if the issue is tied to your pricing strategy or communication gaps.

1. What is fee sensitivity?

Fee sensitivity reflects how much price influences client buying behaviors and how they respond to fee adjustments. Clients with high fee sensitivity are more likely to shop around, negotiate prices or switch firms based on cost differences.

Several factors drive increased fee sensitivity, including:

  • Economic Conditions: During periods of slow economic growth or increased inflation, businesses often become more conservative in their spending and look for opportunities to cut costs. In parallel, if consumer spending declines, businesses may project lower revenues, making them more cautious about their spending.
  • Competitive Factors: From a client’s perspective, many professional services firms offer the same or similar services. This perception makes clients more sensitive to fees they see as more expensive. Understanding sector and local market fees is crucial to determining pricing – and differentiating based on value.
  • Perceived Value: When a firm is able to differentiate the value of the services it provides, clients are less sensitive to fee differences or increases.

It’s important to note that not all clients have the same level of fee sensitivity. Take the time to understand the needs and pricing expectations of different client segments and adjust your fee strategies and communications accordingly.

2. What’s your firm’s value story — and how well are you telling it?

A client’s fee sensitivity isn’t always about cutting costs. It may stem from a lack of understanding of the value of your firm’s services and expertise. If you’re in a highly competitive market and your clients are asking questions about your fees, it’s a sign your value story isn’t being communicated effectively or needs to be updated to align with current market conditions and client priorities.

Communicating your firm’s value effectively to both new and existing customers should be a core part of your fee strategy. It’s what explains why your services are worth the fees you charge. Firms that can effectively explain their services and the unique benefits they offer can often command higher fees because clients understand the value they add.

A compelling value story offers transparency by proactively answering key client questions, such as:

  • Expertise: What specialized knowledge or skills does your firm offer?
  • Differentiators: How does your firm stand out from your competitors?
  • Results: What outcomes can clients expect?
  • Efficiency: How does your approach save time or resources for the client?
  • Risk reduction: How do your services mitigate risks for the client?

When communicating your value story, provide proof whenever you can. Use case studies and testimonials that demonstrate value. Quantify the value realized by your clients by calculating time saved, ROI achieved, increased accuracy or long-term savings. Most importantly, make sure your entire team is telling the value story consistently – and backing it up through their client interactions.

3. Would another fee structure better fit your firm’s value story and your client set?

Understanding your market and your clients’ needs and staying in sync as they evolve are critical factors when determining your fees. With this knowledge as the foundation, build transparency into your rates and how you communicate them. Whether you charge an hourly fee or have set fees by service, your fee structure should be easily explainable and align closely with your value story.

If fee sensitivity among your clients is on the rise, dig into the details to figure out why. Talk to clients, do some competitive research to benchmark your fees and audit recent invoices to understand current costs and charges. Apply a value-based pricing lens to your analysis. A value-based approach sets fees based on the perceived value of a service from the client’s perspective, rather than solely on costs or competitor pricing.

As part of your analysis, explore other fee models to see if there’s a better fit to help you balance client needs with your firm’s financial goals. Fee structures in the professional services industry include:

  • Hourly fees
  • Flat fees for specific projects or services
  • Retainer models for ongoing services
  • Tiered pricing options that provide service-level choices to clients, such as basic, standard and premium
  • Service bundles that offer a discount when services are delivered together

When facing fee sensitivity, keep in mind that many clients are willing to pay a premium price for services they can’t (or don’t want to) do themselves, expertise and specialization they don’t have, or experience they can’t get elsewhere.

The professional services industry experts at CBIZ can help you optimize your firm’s strategies with insights and guidance tailored for your situation. Connect with a member of our team and gain access to more resources here.

This article includes input from Brian Brinig, author and Managing Director of CBIZ Forensic Consulting Group. Brian specializes in business and professional practice valuation for purposes of purchase and sale, estate planning, condemnation and business litigation.


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For professional services firms, determining the appropriate fees to charge is an ongoing effort based on broad economic factors, costs, local market factors and the competition. In recentyears, as clients face pressures to reduce costs and improve efficiency, professional service fees have come under more scrutiny, with one-third of B2B purchasing decision-makers saying price is their primary influence.

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