Please wait while the search results are loading...

Consulting Firms Accept Assignments with Contingency Fees, Business and Industry Trends Analysis

With the understanding that today, more than ever, corporate clients want fast results and a high return on their investments in consulting, many consulting firms are accepting contingency payment for part of their fees.  This practice, sometimes called variable pricing, recognizes the fact that client companies are frequently taking big risks and facing large fees when hiring consultants.  Results matter, and contingency fees reward consultants when goals are met, while protecting the client when consulting projects fail.  Some consultancies now bid from 30% to 75% (occasionally even 100%) of their jobs with contingency pricing.  Under such a plan, a base fee is typically paid regardless of results, but a considerable increase in the fee is paid when goals are met, such as cost savings, increased efficiencies, increased sales or higher customer satisfaction levels.  In rare cases, consultancies may take part of their fees in shares of stock in a deal such as a leveraged buyout.  Another way of describing this type of contract would be a retainer (or base pay) plus a success fee (or bonus).  Bain & Company was an early proponent of contingency pricing which is now commonplace among many consultancies.
Similarly, many outsourcing agreements now call for “gain-sharing.”  This is a practice in which the outsourced service provider receives much higher fees if cost-cutting and quality goals are met.
The most important thing in pricing is for consultants to make their fees understandable and justifiable.  Consequently, the number of pricing plans used varies widely, depending on the nature of the client and the business practices of the consulting firm.  Additional fee plans may include fixed total price, hourly price (with or without a cap on maximum cost) or a base retainer plus variable costs.
Contingency pricing puts pressure on consulting firms that make substantial investments up front in facilities, equipment and staff in order to facilitate their assignments.  Additional pressure is coming from competitors in countries that work under lower cost structures, such as those in India, often driving consulting prices downward.
 


A Representative List of Organizations that Have Used our Research and Products:

Testimonials

I’m amazed at how much information is available and the various ways to access it. This will be a major resource for our serious job seekers.

Career Services, Penn State University

Plunkett Research Online provides a great ‘one stop shop’ for us to quickly come up to speed on major industries. It provides us with an overall analysis of the market, key statistics, and overviews of the major players in the industry in an online service that is fast, easy to navigate, and reliable.

Wendy Stotts, Manager, Carlson Companies

I really appreciate the depth you were able to get to so quickly (for our project). The team has looked through the material and are very happy with the data you pulled together.

Hilton Worldwide, Marketing Manager

We are especially trying to push Plunkett since all of our students have to do so much industry research and your interface is so easy to use.

Library Services, St. John’s College

We are especially trying to push Plunkett’s since all of our students have to do so much industry research and your interface is so easy to use.

Gary White, Business Materials Selector, Penn State University

Your tool is very comprehensive and immensely useful. The vertical marketing tool is very helpful, for it assists us in that venue, as well as targeting customers’ competition for new sales…The comprehensive material is absolutely fabulous. I am very impressed, I have to say!

Tammy Dalton, National Account Manager, MCI

The more I get into the database, the happier I am that we’ll have it–REALLY happy!!! Between the quality and affordability of your product, its appeal to and value for our users, and the inestimably ethical and loyalty-guaranteeing conduct of your business, I will always have more than sufficient praises to sing for Plunkett Research.

Michael Oppenheim, Collections & Reference Services, UCLA

Plunkett Research Online is an excellent resource…the database contains a wealth of useful data on sectors and companies, which is easy to search and well presented. Help and advice on how to conduct, export and save searches is available at all stages.

Penny Crossland, Editor, VIP Magazine
Real Time Web Analytics