The reality is that fees are the backbone of success for any business delivering services to others.
Utilising Fees Surveys to identify and charge the correct fee can mean the difference between a highly profitable business, a profitable business or a business that goes broke.
In service industries the fees being charged are the only source of revenue for the business. This means that getting fees right is absolutely critical.
If the fees are too low profitability will be affected. If fees are too high it may impact on the amount of business being done.
Operating in the Dark
Most service industries operate in the dark when it comes to understanding what their ‘competitors’ are charging. Often anecdotal information is available and possibly friendly colleagues may discuss fees, but generally there is limited access to quality information on what the broader industry is charging.
This opens opportunity for Associations, Business Suppliers and other interested parties to provide a truly valuable service to their members, clients and/or customers.
Providing the opportunity to compare fees anonymously has proven to be a highly valued service in many industries. So why not try it in your industry?
Facts About Fees
- If the pricing of a service is incorrect then the mistake will be duplicated repeatedly until the fee is corrected
- Many costs in business are fixed so small changes in fees will result in exponentially higher levels of profit
If a business operates on a 30% profit before director’s wages then a 10% increase in fees will result in a 25% increase in profits assuming all else remains the same.
Conversely, if a business under charges by just 10% then profit will decline by a massive 33.3%
Benefits to Members
A key element of a Fees Survey for participating businesses is that there are significant benefits on offer with no risk at all.
If fees are too low participants have an enormous advantage in finding out. If fees are on the higher side it is just a matter of ensuring they are within the range of direct competitors.
Key benefits:
- Quantifies the value that is placed on services
- Demonstrates the market position of an organization relative to peers
- Clearly identifies pricing strengths and/or weaknesses
- Will help maximise profits
- Encourage behavior to set fees in a more businesslike manner
- Stimulates owners/managers to address fees now
- Collective wisdom is often helpful in determining value on offer
Associations Providing Value to Members
At Benchmarking Solutions we know that the most popular benchmarking survey delivered to service industries is the Fees Survey.
If you represent an Association whose members are businesses providing services to others then delivering a Fees Survey truly represents value. Importantly managers recognise the merit of such an offer immediately.
Benefits for Sponsoring Associations:
- Deliver true value to your members
- Highly visible and obvious benefits
- Easy to implement and easy to promote
- Low cost : High benefit ratio
Link: Benchmarking for Member Associations
Conclusions
In an unregulated market, fee setting is the key to success of any service provider. But to accurately set fees managers crave evidence of what other similar businesses may be charging.
The most logical group to provide Fees Benchmarking within any industry is either an Association or a Business Supplier looking to add value.
Benchmarking Solutions offers enormous opportunity to any group that sees a benefit in providing this critical service.
A Fees Benchmarking Survey can be delivered as a ‘value added’ service to members or can be provided as a ‘chargeable’ item. Either way it will be seen as truly valuable.
Fees Surveys are one of the easiest surveys to implement and manage. Huge benefits are achieved with minimal input and management.
A Typical Fees Surveys Sample Result
Data courtesy of MPV Consulting
The above sample is a popular display for end users to see where they stand. There is a wide selection of alternative presentations of tables, graphs and other data displays available.
Contact: rob@benchmarkingsolutions.net
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