Arkon GroupIndustry perspective
Business Services: Price the Stakes, Spend Partner Time Where It Pays, Stop Giving Work Away
In business services, margin is won or lost on three things: fees that follow what is at stake for the client, selling time spent where it converts, and the discipline to bill what the client actually asks for.
Arkon Group perspective · updated 10 October 2026
Most mid-market services firms, whether they run projects, retainers, staffing or outsourced operations, price by the hour and sell through whoever has a relationship. That habit has a cost. Work that matters greatly to the client goes out at the same rate as routine capacity. Discounts are agreed account by account. Extra requests are absorbed after signing. Partner time drifts towards whoever is asking loudest. Arkon's view is that each of these is a choice, and each can be made deliberately. The firms that do so separate the work clients will pay for from the work they buy on price. They hold one line on discounting and bill what they deliver. They point their scarcest selling time at the clients and sponsors who actually award work.
Framework
Set fees by what is at stake, not by the hours it takes
Clients do not value all work equally, and neither should the rate card. High-stakes work, such as a decision the client cannot afford to get wrong or a process that is hard to move once it is running, carries a premium the client will accept. Capacity work is bought on price, and it should be priced to win. The mechanism is a deliberate split between the two, so the firm stops subsidising one with the other.
- Good looks like: a widening spread between the realised rate on high-stakes work and on capacity work, and a rising win rate on capacity proposals.
- In outsourced and managed operations, the same logic applies to how hard a process is to move. The harder it is to move, the stronger the pricing position.
- Watch: if capacity proposals are lost on the team offered rather than the rate, the win-rate gain is a go-to-market or offer problem, not a pricing one.
Trend
Most leakage happens after the price is agreed
The rate card is rarely the problem. What erodes margin is what happens between the proposal and the invoice: discounts agreed partner by partner, requests absorbed after signing, and multi-year agreements left at the rate of the first year while salaries move. Each of these can be closed with a policy rather than a negotiation.
- One discount policy: realised rate against the rate card kept narrow within each client group, and every write-off explained by a named reason. If one client dominates fees, the limit applies to the rest of the book.
- Billing scope added after signing: overrun on fixed-price work billed through change orders, short-notice requests priced, and write-offs falling. If the overrun comes from under-estimated proposals, fix the estimating, not the billing.
- Rates that follow pay: every agreement beyond a year tied to a named index, with rates adjusted within a quarter of it. Public clients may write their own index into the tender, and the clause then follows theirs.
Framework
Partner selling time is the scarcest asset. Spend it on the largest clients and live sponsors
In a services firm, the people who sell are usually the people who deliver. Every hour spent on a proposal that was never winnable is an hour taken from a client who would have bought. Arkon's position is to concentrate selling time and make the routine work cheaper to propose.
- Account time where it pays: most partner selling time on the largest clients and live sponsors, proposals per win falling, and fees per selling hour rising.
- Standard offers: most repeatable work proposed from a standard offer, so proposal hours per win fall.
- A gate on proposals: decide before writing whether a bid is worth the time. Where every assignment is genuinely different, standard offers will be few and the case rests on that gate.
- Watch: if most work arrives through public tenders written to a fixed format, the gate frees less time. The focus then moves to choosing the tenders worth writing.
Trend
Write an offer for each client group, and make the richer one prove results
A firm that pitches the same proposition to every client competes on rate by default. A small number of written offers changes that. Each one targets a client group and carries its own proof and price logic. Clients who need assurance get a richer offer that shows performance. Clients who want capacity get a lean one that is cheaper to serve.
- Good looks like: the win rate rising in the segments the richer offer is written for, and cost to serve falling where the offer is lean.
- Watch: if losses are head-to-head on capability rather than continuity, the richer offer must prove performance, not just service.
Framework
Partners and brokers extend reach, but only when you have capacity to fill
Referral partners and brokers can open doors a mid-market firm cannot reach alone. They only pay their way when the terms reward real work and the firm's own leaders still own the relationships that matter most.
- Report proposal flow from partners and brokers by client group every month.
- Pay fees only on work actually brought.
- Keep the largest clients covered by your own partners, not by intermediaries.
- Watch: if the consultants are fully booked, broker work pushes out better work and the reach is worth less.
So what
Know why you lose, and what each client really earns
Pricing and go-to-market decisions rest on two facts that many services firms do not record: the reason each proposal was lost, and the margin each client leaves after the cost to win and serve them. Without the first, firms cut the rate when the real gap was capability. Without the second, a tail of small, custom-heavy clients quietly absorbs the time that should go to growth.
- Record the reason on every lost proposal and keep a standing comparison with the firms you meet. Close capability gaps where those are the losses. If proposals are mostly lost on rate, pricing and offer design lead instead.
- Know margin per client after the cost to win and serve, and hand over the tail below the threshold each year. Keep a small client that opens the door to a large group, but price it accordingly.
- Grow service lines per client, and report fees from recently launched services every month. If clients buy the other service under a framework you are not on, the opportunity is smaller than it looks.
How Arkon helps
Where Arkon fits
Commercial Strategy sets the choices that frame everything else: which client groups to serve with which offer, where partner time should go, and which clients are worth keeping at what price. Pricing Excellence separates high-stakes from capacity work in your rate card. It puts one discount policy in place, makes scope added after signing billable, and ties multi-year agreements to an index. Go-to-Market writes the offers for each client group, sets the proposal gate and standard offers that cut proposal hours, and puts referral partners on terms that pay only for work brought. All three are kept current monthly, so each position is checked against your win rates, realised rates and selling time as they move.