More on Pricing Legal Services
MarketingExperiments.Com is a member of the MEC Labs Group and a division of Digital Trust Inc. MEC is an online laboratory with a simple (but not easy) five-word mission statement: To discover what really works. The Lab tests every conceivable marketing method on the Internet.Our experiments range from three to eighteen months, and they involve budgets ranging from $4500 to $50,000+. We are often surprised, and sometimes embarrassed to discover just how much we DON'T know about marketing.
In a recent experiment, they worked with a leading psychiatrist and author to determine how to maximize online sales of a new book. They tested three price points ($7.95, $14.00, and $24.95) and measured the effectiveness and total revenue produced by each. Their results are a bit surprising. The lowest price point generated the second-lowest number of orders and the lowest amount of total revenue. The middle price point generated the highest number of orders. The interesting nugget (for me at least) was that when the book was priced at $24.95, the smallest number or orders still generated the highest amount of revenue. In fact, both the $14.00 and $24.95 prices generated more than twice the revenue of the lowest price.
While the lesson for lawyers might not be to change your billable rate to $1,000.00 per hour (and only work one hour per day), it is interesting to note that lower prices (rates) don’t necessarily translate into more sales (clients). We’ve been playing with some pricing strategies here at my firm for our value-based billing mode and I’ll share some year-end results with you soon. Until then, the MarketingExperiments.com newsletter is a worthy read. I highly recommend checking it out yourself.