The relationship between a company and their Professional Employer Organization (PEO) is more than just business transactions—it's a long-term partnership that can yield considerable benefits for both parties.
For small and medium enterprises (SMEs), choosing and signing with a PEO can be a lengthy decision-making process and many PEOs never see their proposal lead to a contract.
Converting interest into a signed contract requires PEOs to clearly demonstrate their value and tailor their cost structures to the unique needs of potential clients. In our previous blog, The Untapped Potential of PEO Partnerships: Insights and Opportunities, we discussed the untapped potential within the PEO industry. Now, let's explore how PEOs can turn consideration into conversion through value demonstration and strategic pricing.
Demonstrating value beyond cost savings
While cost is a significant factor in a company's decision-making process, PEOs need to emphasize their holistic value. Here's how:
Compliance and Risk Management: Offer case studies showing how your PEO has helped other, similar companies navigate complex compliance requirements and mitigate risks, leading to savings in potential legal costs.
Improved Employee Benefits: Detail how your PEO can provide access to better employee benefits. Often at a lower cost than what companies could negotiate on their own, thereby enhancing employee satisfaction and retention.
Focus on Core Business: Showcase testimonials from clients who have redirected their internal resources to focus on their core business functions thanks to the administrative relief provided by your PEO.
Strategic HR Support: Provide examples of how your PEO expertise has contributed to strategic HR planning and implementation, which can drive long-term business growth and scalability.
Right-shore operational strategy
To attract and retain clients, PEOs must offer competitive pricing without compromising service quality. Implementing a right-shore strategy can significantly lower costs and enhance service delivery. By partnering with outsourcing providers that have multi-shore capabilities, PEOs can optimize task allocation.
Working with outsourcing partners such as ADEC USA allows PEOs to pass on cost savings to their clients. For instance, non-core tasks can be offshored to lower-cost countries such as the Philippines, Kenya or Egypt, reducing operational expenses while maintaining high service quality through close oversight from the U.S.-based headquarters.
The right-shore strategy not only reduces costs but also frees up PEO resources to focus on value-adding activities, such as enhancing customer service and developing innovative HR solutions.
Restructuring costing for sales conversion
Transparency and flexibility in pricing can bridge the gap between interest and action. Here’s how PEOs can restructure their costing:
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Modular Pricing: Introduce a modular pricing strategy where companies can choose from a menu of your services to avoid paying for unnecessary features.
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Scalable Solutions: Offer scalable pricing that adjusts based on company size, growth stage, or usage to accommodate businesses at various levels.
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Transparent Breakdowns: Clearly itemize costs so potential clients understand what they are paying for, helping to build trust and clarify the ROI.
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Free Trials or Pilot Programs: Allow companies to experience your service first-hand without a full commitment, demonstrating confidence in the PEO’s ability to deliver value.
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Customized Proposals: Tailor proposals to each company’s specific needs, showing a deep understanding of their unique challenges and how PEO services can provide solutions.
Conclusion
To convert interest into sales, PEOs need to create a compelling narrative that aligns with the needs and values of potential clients.
It's not just about cost—it's about showcasing the full value a PEO offers. By highlighting the various benefits and offering a flexible, transparent pricing structure, PEOs can overcome the price barrier and establish themselves as essential partners for their clients. To understand why many companies do not proceed to the proposal stage, read our blog on NAPEO's findings and engagement strategies, Why Most Companies Considering PEOs Never See a Proposal.
ADEC USA is an outsourcing partner for PEO organizations. Drawing on decades of expertise in outsourced operations across the PEO industry and providing a range of onshore and offshore solutions. Contact us to discover how our services can benefit your organization.
Want to learn how outsourcing can benefit your PEO? Discover our latest content, insights and explore ADEC USA's solutions in our PEO hub.
