Service prices are influenced by three primary cost drivers:

1. Required expertise: extensive/deep expertise commands a higher price; experience is highly valued; good foundational education leads to higher quality work results. A specialist with specific knowledge can solve a customer's problem in a short time, while a beginner may spend many hours searching for a solution.

2. Risk or responsibility for work success: the higher the responsibility for the success of the work, the higher the price, as responsibility is associated with risk management tasks. The higher the negative impact of a mistake or failure, the higher the price.

3. Security and volume: The more secure the service orders over a longer period and the better the volume of capacity matches, the lower the price. Note regarding volume: a very small volume as well as a very large volume is suboptimal, as with a very large volume, no other orders can be processed.

  1. as cheap as possible
  2. not much more expensive than if you did it yourself
  3. Note: when comparing, the costs of a permanent employee's salary must be included. Additional costs include social benefits, further education, workplace and equipment costs, as well as management and leadership costs.
  4. For professionals who are very familiar with the task or problem, up to three times more can be paid than for average professionals, as experienced individuals can solve the problem much faster.
  5. For routine tasks, inexpensive professionals should be used whenever possible.
  6. Low service prices also mean low wages.

Do you want low prices? Argue correctly!

  • Ask the provider if it makes sense in the specific case to use slightly less qualified professionals.
  • If you can make a medium- or long-term commitment, ask for a volume discount.

  1. Not too high, as the customer will prefer a cheaper competitor.
  2. Not too low to avoid losses.
    • Service prices are primarily wages.
    • Furthermore, the costs include social benefits (in Switzerland AHV/IV/EO/ALV, BU/NBU, BVG), further education, holidays and other absences, workplace and equipment.
    • Good employees must be paid well.
  3. Prices must cover costs.
    • Prices should not only cover costs but also generate profit so that the provider can spend the profit on innovations.
    • Innovations in services are also possible, such as improvements in quality control, improvements in order placement and billing such as electronic invoicing, and more.
    • Be cautious with post-discounts, as the loss zone may be reached rapidly.

Do you want to achieve high prices? Sell your prices!

  • Explain the composition of the price: expertise, ancillary wage costs, if applicable, risk component, if applicable, volume discount.
  • Justify the expertise.
  • Explain the risk component.

Depending on the perspective, different assessments arise:

Customer's Perspective Provider's Perspective
+ The provider has done good work in a short time and the price was also reasonable + The customer has provided clear requirements and our team has completed all work in good quality in a short time
+ The provider has provided specialists who had exactly the right qualifications + The customer has clearly communicated the requirements
– The provider is trying to demand an excessively high price – The customer is trying to negotiate down our price
– Everything is getting cheaper, so the service prices of this provider must also decrease – Decreasing service prices means that we have to lower our wages: the particularly good employees will leave first
– The provider's people work too inefficiently: the work could be completed in half the time – The customer requests additional services that were not originally agreed upon