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WTP Regression / Computing Intent

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What It Is

An empirical pricing analysis of 1,820 consulting opportunities using regression modeling with capability-level fee attributions. The model explains 85% of price variation (R-squared = 0.850), revealing that what you sell (engagement type) and who you sell to (buyer persona) drive pricing more than which practice delivers the work. Practice ownership — the organizational axis most consulting firms price along — shows no statistically significant price premium.

Why It Matters

Practice ownership does not drive pricing. Engagement architecture does. The regression proves it: what you sell and who you sell to explain 85% of price variation.

Most consulting firms price by practice, seniority, and hourly rate. The regression reveals this is misallocated precision. Engagement type produces the largest premiums: Program Leadership (+27%), Non-Product Build (+29%), Product Build (+15%). These premiums reflect the value the client perceives in the engagement structure itself — not the domain expertise of the practice delivering it. Buyer persona matters independently: CIO buyers pay +12% premium (they purchase transformation outcomes), Deal Team buyers receive -18% discount (they purchase due diligence inputs with commoditized expectations).

The repeat client dynamics reveal a counterintuitive pattern that no pricing theory predicted: repeat clients receive 47% lower prices on average, but higher historical fees predict higher current prices (+3.8% per doubling of historical spend). Loyalty discounts and anchoring effects operate simultaneously in opposite directions. The net effect depends on the magnitude of historical spend — creating a crossover point where the anchoring effect dominates the loyalty discount. Firms that do not model both effects simultaneously misjudge their repeat-client pricing by a measurable margin.

Proof Points

  • 1,820 opportunity dataset with capability-level fee attributions — proprietary, no comparable published dataset
  • R-squared = 0.850: engagement type and buyer persona explain 85% of price variation
  • Engagement premiums: Program Leadership +27%, Non-Product Build +29%, Product Build +15%
  • Buyer persona effects: CIO +12%, Deal Team -18% — statistically significant and stable
  • Repeat client: -47% average discount but +3.8% per doubling of historical fees (simultaneous loyalty and anchoring)
  • Practice pricing is relatively uniform — the pricing lever is engagement type, not practice domain
  • Crossover point where anchoring dominates loyalty discount is empirically identifiable

Novel Research Contribution

The central contribution is the empirical demonstration that consulting pricing is driven by engagement architecture (what you sell) and buyer persona (who you sell to), not by practice domain (which team delivers). This contradicts the implicit assumption in most consulting firms that practice expertise commands a price premium — the data shows it does not, once engagement type and buyer persona are controlled for. The repeat client dynamics — simultaneous loyalty discounts and anchoring effects operating in opposite directions — provide a novel empirical finding for professional services pricing literature. The crossover point where anchoring dominates loyalty has not been previously documented.

Target venue: Journal of Professional Services Marketing, Management Science, or Marketing Science

Extends: Price discrimination theory, anchoring literature (Tversky & Kahneman), professional services economics

Challenges: Practice-based pricing models, the assumption that domain expertise commands fee premiums

Market Position and IP

This is proprietary empirical pricing intelligence based on 1,820 real consulting opportunities — a dataset no competitor has published at this resolution. The finding that engagement type drives pricing more than practice ownership is directly actionable: it restructures how firms should design their service portfolio, train their sales teams, and negotiate with different buyer personas. The repeat client pricing model provides account planning intelligence that no CRM or pricing tool currently delivers.

Connections

  • Imperatives: 10x10 Domain Intelligence
  • Frameworks: Pricing Model, Proforma Engine
  • Capabilities: Financial Value Creation and Capture