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Pricing Strategies

Pricing Strategies. Payroll Associates, LLC User’s Conference Scottsdale, AZ April 27 th -29 th , 2006. Topics. Pricing a Prospect Bundled vs. A la Carte Line Items Current Client Add-Ons Competitive Pricing Price Increases. Pricing a Prospect. Lead with Book Pricing

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Pricing Strategies

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  1. Pricing Strategies Payroll Associates, LLC User’s Conference Scottsdale, AZ April 27th-29th, 2006 Payroll Associates Users Group Meeting April 2006 – Scottsdale, AZ

  2. Topics • Pricing a Prospect • Bundled vs. A la Carte • Line Items • Current Client Add-Ons • Competitive Pricing • Price Increases

  3. Pricing a Prospect • Lead with Book Pricing • Price set up high, or higher • Get current invoice from incumbent if possible • Should be based on a very thorough analysis • Most prospects will annualize • Generate an ROI, if possible

  4. Pricing a Prospect • Looking to save money • Looking for added features and services • Leverage service vs. price • Free Months • Free Year end • Promotions

  5. Bundled vs. A la Carte • Both generating an annual number • Bundled objection is always “break it out” • A la carte or menu option does allow for prospect to see value clearer • Bundled makes it convenient, less to think about, one number • Base Charges vs. No Base Charges

  6. Bundled vs. A la Carte • Other services based on your organization • Wrap a per ee charge for all services • Included year end or separate • Options • Software or Applications

  7. Line Items • Base Charges: -Pro Rated for Frequency -Waived or Not? -10/15/25 -Bundle in Per EE Fee -Minimum # of Checks

  8. Line Items • Per EE/Check Fees • $1-$5 per EE • Not related to Frequency • Include Stuffing and Signing? • Included DD? • Guarantee Fee as EEs are added?

  9. Line Items • Tax Filing -Based on frequency -9/15/25 -Additional Jurisdictions? -Locals? -Quarterlies usually included

  10. Reporting • List of included standard reports w/pricing • Labor Distribution • Job Costing • Special reports • On going and Set Up Fees • General Ledger – Report/Interface

  11. Web Products • Include a set up charge • Per ee ongoing charges for self service, reporting, hr applications • ADP will charge a high base fee for hr services and ee self service

  12. Alliance or Ancillary Charges • Pay as you go WC – PayChex - $12.00 • Background Checks – Add Hoc • Direct Deposit – Base plus per transaction • Line Items • Client can choose • Build into proposal as options • Have a price sheet specifically for these programs

  13. Alliance or Ancillary Programs • Section 125 • 401k • Built into program for ADP and PayChex • Turn key solutions are easier to sell and price • Bundle into initial proposal • Support • Time and Attendance - Discussion

  14. Competitive Pricing • ADP and PayChex can average anywhere between $5-$15 per EE based on levels of service and features. • There is a lot of room vs. the competition • Pricing Battles – Rep will waive fees to keep business. • These Reps are trained to pitch a large product set and do a thorough analysis.

  15. Competition • Varies based on market segment • Other local providers – most likely will pigeon hole themselves as payroll/tax filing only. • Use your set of tools to reflect value • Do not live by the sword!!! • By an Employer Solutions Consultant • All pricing, especially vs. the competition, must reflect an accurate and well understood anlayis.

  16. Competition • Goals: -Beat the incumbent or competitor -Leverage influence or references -Use testimonials -Be consistent – harder for comp. -Get highest price as possible, large revenue, larger commission. Leverage Year end and set up whenever possible.

  17. Price Increases • Make clear at time of sale • Use guarantees for periods of time • Make increase over any attrition • ADP philosophy is raise prices that will cover revenue loss from attrition. • Retention is never perfect • Use certain features as price increase areas

  18. Price Increase • Usually the same time every year • ADP is April • Know when competition does an increase • Revenue shares

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