Jerome Erickson is a retired school district administrator who now works as a consultant specializing in hiring administrators for school districts. Jerome used to charge a flat fee of $5,000 for each administrator hired, but decided to develop a new pricing structure. The new structure is as follows:
Due at signing: $1,500
Contract review: $125/hour capped at hours
Contract formulation: $125/hour capped at 12 hours
Applicant screening: $25 per applicant
Preliminary interviews: $125 per interview
Final interviews: $175 per interview
Carol Ferguson is an overworked accounting clerk in a small school district. She sits at her desk, reviewing the pricing structure in the brochure from Erickson Consulting. She knows that Mr. Erickson is one of the most highly regarded educational consultants in the state, but is not sure that the district can afford him. The school board had voted to budget $5,000 for the district administrator search, based on Carol’s recommendation.
Why do you think Jerome Erickson changed his pricing structure? What were some of those inherent problems? What are the benefits of the current pricing structure?
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