That question seems to come up often. I know I’m sitting on valuable data but I’m not sure just how valuable. When it comes to using the data internally to improve operational efficiency or service delivery, the resulting cost savings demonstrates the value. Or when using the data to identify new customer opportunities, either upsell to existing customers or identifying potential new customers, the resulting revenue generated demonstrates the value. But what if I want to take the data to market? What’s the data worth? That question is harder to answer, but not impossible.
The first question I’d ask myself is what I already know. What are the givens in the equation? Think back to a math course. You are trying to solve a problem. What have you been told? In fact, I’ve been doing math with my son and that exercise has helped me in framing the approach to pricing data. We know the length of one side of the triangle, and we know the relationship with the other sides. While we don’t know the length of all sides we know enough to figure it out.
Clients and services partners have talked for years about linking services partner pricing to business goals. However, traditional pricing models such as time and materials and fixed fee still dominate in services partnerships; examples of truly innovative pricing models are rare. Despite the rarity of these outcome-oriented pricing models, interest remains high. Clients frequently ask Forrester for examples of next-generation, innovative services pricing models. So, I’m writing this post to highlight two recent examples (showcased at March customer and analyst events) that truly push the envelope for services pricing models linked to business goals.
Example 1: Venture-based
At BearingPoint’s recent analyst summit, the EMEA-centric business consulting provider showcased multiple examples of venture-based engagement. The examples showcased go beyond the typical “VC fund” that we see at other services providers (in which an arm of the services vendor operates like a venture capitalist by doling out funds to a set of early-stage companies). Instead, BearingPoint gives consulting time and tools to select clients or alliance partners in return for equity. For example, Bearingpoint has a services-for-equity partnership with tracekey, an early-stage company focused on track and trace functionality for pharmaceutical companies. This means that Bearingpoint’s financial rewards are directly tied to tracekey’s results, without getting tangled up in managing to the contract terms or project dashboards.