HR guru Dave Ulrich says a certain percentage of recruitment agency clients will always buy on price alone — but most clients will be more interested in service differentiation, as long as prices are within “a zone of indifference”.

“What I think we generally have to have is price parity,” Ulrich told Recruiter in an exclusive interview. “We have to be in the ballpark. Parity means you’re within a zone of indifference. And then what you’ve got to do is differentiate on service.”

Ulrich, one of the world’s best-known HR strategists, will speak in London on 30 January at the Hilton London Paddington hotel. Recruiter is the UK media partner for the Global Leaders event.

“Some groups of customers say once there’s that price parity, ‘why would I choose to work with this firm over another? If I have a choice, I will choose to work with a firm where I have relationships, where I feel like my needs are being attended to, and where I feel like I have good service.”

He went on to say, “I think those are the kinds of things companies are working on.”

He recommends that recruiters target key accounts, “and then to build relationships with them so that you get customer share, not just market share”.

The University of Michigan professor says he believes that the percentage of clients who base decisions strictly on price will typically be small. “And they’re the ones who will buy generic products, no-name brands,” Ulrich says. “They’ll drive two hours to save £1, having spent £2 on petrol. They think they’re getting a good price.”

* For more information on Ulrich’s appearance in London, go to www.globalleadersevents.com, and see Recruiter 10 January