Cost saving narrative and pricing strategies in Facility Management Industry


In Nigeria and other countries, facility management companies want people and businesses to outsource management of the critical and soft facilities to them for maximum operational efficiency and cost reduction. In the last 10 years, this has been the agenda of facility management solutions providers, saying users of various facilities need to focus on the core operational activities and save time and effort on support activities.

As businesses and people look forward to 2019 and beyond, Infoprations believes that operational cost reduction will continue to be FM companies’ narrative as the main strategy of getting more clients and having sustainable revenue. Telling cost reduction story means that FM companies’ success rate is premised on how to get more for less using cost-cutting.
Like other industries, players in FM industry have premium, penetration, economy and skimming pricing strategies to choose from. Premium pricing is useful when strong competitive advantage exists. Penetration pricing becomes handy when there is a need to gain market share quickly by setting price low. Targeting mass market and high market share requires economy pricing. Adopting skimming pricing means that companies will charge high price for a solution till a certain period that competitors give room for low price choice.
In their quest of providing value added solutions, FM companies inspect facilities before offering specific solutions. FM companies view this as part of value added solutions. However, clients may not see it as value addition element. When this occurs, what is the appropriate pricing strategy?


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