Pricing Power (pt. 3) - Government Collaboration
February 24, 2019·12 comments
The skinny of “Pricing Power #1 – Client Ownership” is that pricing power in a services industry is found in your proximity to the client relationship, not the product that the client is buying. The problem, of course, is that it’s really really hard to scale client relationships, or at least it’s hard to scale the relationships that are worth scaling.
The skinny of “Pricing Power #2 – Intellectual Property” is something of the reverse. If you ARE on the product side of your industry, then the only way to maintain pricing power is throughnarrative-rich if not mythic intellectual property. Conversely, relationship owners always think that they can scale their nice little client-facing businesses with Technology IP. They are always wrong. The one (rare) exception is the use of Content IP, but even here you are scaling your client relationship depth, not your client relationship breadth.
The skinny of "Pricing Power #3 - Government Collaboration" is that the most dependable way to protect your margins and maintain pricing power is to partner with the government to provide a politically useful service. I don't mean an overt partnership. I don't mean becoming a government contractor (although sure, that works, too). I mean identifying the social meaning of your services industry and implementing a business strategy that supports THAT.
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