Site moved to www.nonbillablehour.com/2004/11/more_on_pricing.html

« Baseball's Lessons for Lawyers | Main | To work at home -- or not? »

November 22, 2004

More on Pricing Legal Services

I recently signed up for the free MarketingExperiements.com newsletter.  According to the site:

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.

TrackBack

TrackBack URL for this entry:
http://www.typepad.com/services/trackback/6a00d83451dc1d69e200d8342238d753ef

Listed below are links to weblogs that reference More on Pricing Legal Services:

» licensing fattens lawyer income says study from f/k/a
Matt Homann at the [non]billable hour, is once again dreaming up ways for lawyers to extract more money from clients without giving them a better product. [Read More]

Comments

Verify your Comment

Previewing your Comment

This is only a preview. Your comment has not yet been posted.

Working...
Your comment could not be posted. Error type:
Your comment has been saved. Comments are moderated and will not appear until approved by the author. Post another comment

The letters and numbers you entered did not match the image. Please try again.

As a final step before posting your comment, enter the letters and numbers you see in the image below. This prevents automated programs from posting comments.

Having trouble reading this image? View an alternate.

Working...

Post a comment

Comments are moderated, and will not appear until the author has approved them.