Internet Business

A major online recruiter struggling with the stagnating economy engaged SPG to price its services to maximize revenue and profit. The once booming online recruiting industry had fallen dramatically from the heights of the dot-com hiring boom; the introduction of numerous competitors, combined with an anemic economy, had significantly reduced growth of online recruiting services, and had created considerable downward pricing pressure. Our client engaged SPG to evaluate the effectiveness of its product offering and customer segmentation strategy, and to help re-price its entire services portfolio. SPG discovered that our client mistakenly felt that discounting price was always better than losing a customer. In addition, our client offered its services for one bundled price. After careful analysis and testing, we advised that they unbundle their recruiting database, providing customers with the ability to buy resume access for more limited regions, job types, and time periods. We also recommended they charge premium prices for premium value and force customers to make tradeoffs between what they needed and the price they paid. Within weeks, this value-based marketing and sales strategy enabled our client to grow its revenue 3% and achieve an 11% increase in new business from new target markets.