TBR Case Study: Price Benchmarking

Bridge the pricing gap with data-driven insights from TBR

Introduction

In the absence of validated data, many professional and IT services firms rely on pricing strategies of the past and anecdotal, and often biased, inputs from field sales and partners within their ecosystem. To optimize both margin and market share, a data-centric, live “state of the market” pricing analysis can solve many of the unanswered questions services leadership and pricing directors face.

Client’s background

The client for this price benchmarking project was a global Top 3 hardware OEM. The company provides a diverse range of hardware and related services globally across industries such as healthcare, financial services, education and other key industries.

Client’s challenge

The client needed to better understand the competitive pricing environment for consulting and residency services in the U.S. market, including the price points and pricing strategies utilized by key competitors for comparable roles and services. The client sought data and insights on competitive pricing, as well as recommendations on how to translate the insights into executable strategic actions that could be deployed to optimize its near-term and long-term services competitiveness in the U.S. market.
 

 

How TBR helped

Ongoing company coverage and years of dedicated pricing research have allowed TBR to refine and perfect our methodologies to deliver precise, data-driven insights such as street price, list price, deal size-to-discount ratios, staffing levels and levels of automation. Our expertise enables TBR to identify market trends, optimize pricing strategies and drive competitive advantage.
 
TBR’s unique price benchmarking capabilities include:

• Primary research that ensures existing research is rooted in direct, current market perspective from competitors and customers
• Fully customized research plan that ensures data captured is aligned to TBR’s client taxonomies and is directly comparable to internal pricing
• Outputs that yield quantitative pricing comparisons AND qualitative contextual insights on pricing models, pricing structures, discounting and other commercial tactics

To capture apples-to-apples results, TBR typically fields pricing research by devising a set of hypothetical deal parameters to frame market insiders’ pricing inputs. Upon project launch, TBR collaborates with the client to generate services and deal configuration descriptions to best mirror real-world market conditions and ensure outputs will be representative of the client’s services business.

• Services scope: Services covered in the engagement and anticipated services deliverables; also includes considerations such as type of services engagement (e.g., residency versus project-based)
• Technology scope: As applicable, any specifics on the types of technologies encompassed by the engagement per the services deliverables as outlined in the previous bullet
• Commercial scope: Contract length/term and anticipated deal value in dollar terms as applicable

Client’s results

TBR strives to bring contextual understanding of the multitude of professional services, from management consulting to managed services, security services to attached services.
 
This client was able to capitalize on the investment in pricing research by:

• Better understand the necessary resource mix to support its deal pursuits and respective pricing schemes (staffing levels and automation mix)
• Optimally calibrate pricing and go-to-market strategies tied to end-customer outcomes
• Reframe the value of the partner ecosystem through data-centric lens (reset commercial deal structures and long-term partnership models)
• Understand implications of new technologies such as GenAI and multicloud on its pricing and profitability (reduce costs from the equation)
• Invest in hiring and training geared toward what’s next to support elastic pricing and commercial models

Learn more

TBR leverages a proprietary analytical approach to uncover list price vs. street price, delivery models, rate card breakdowns and discount frameworks, developed over 20 years of analyzing professional and IT services vendors and their pricing habits, strategies and discount structures. Each engagement utilizes multiple research tools, including vendor, partner and customer interviews and surveys, with key focus areas spanning competitive intelligence and benchmarking, customer intelligence, financial modeling, go-to-market enablement, and opportunity analysis.
 
Click here to download a free preview of a TBR Tailored Services custom competitive pricing engagement, showcasing a rate card assessment and managed services pricing outputs.