Understanding RMC Pricing: What Buyers Need to Know

Your RFP process has been going well. You’ve gotten great responses from some impressive relocation management companies (RMCs) and maybe you’ve even identified some top contenders for your mobility needs. Then you receive their pricing. How does one RMC charge nothing, another $500, and yet a third $1,000 for what looks like the same service? How is that possible? And how do you make sense of it?

How RMCs Make Money

RMCs generate revenue in two ways:

1. Service fees charged to their corporate clients.
2. Referral fees received from supplier partners, such as household goods carriers and destination service providers (DSPs).

What an RMC doesn’t get from one, it gets from the other. And while this seems like an easy enough revenue model, it can get complicated. Especially when it comes to providing pricing.

Decoding RMC Pricing

RMCs face the same tension every company does: deliver great service while containing costs. It’s become common for some RMCs to use unique pricing structures and secondary or add-on fees that lower their headline move management fees, making them appear less expensive than competitors on paper. That makes an apples-to-apples comparison difficult. Here’s what to look for.

Non-compliance Fees

Non-compliance fees are charged to your company when a relocating employee doesn’t use a particular benefit. When you hold the supplier contract yourself, the RMC may charge a management or coordination fee, since it has no other way to earn revenue on that benefit. When you don’t hold the contract, the RMC typically waives that fee and instead earns a referral fee from the supplier. If the benefit goes unused, the RMC collects neither, so it looks to recover that lost revenue from you instead.

Non-compliance fees have traditionally applied to benefits like real estate. Increasingly, some RMCs are extending them to household goods shipments, temporary lodging, and DSP services as well.

Across Plus Relocation’s own move data, 78% of employees use a household goods shipment, 50% use temporary housing, and only 25% use DSP services. Under a non-compliance pricing structure, you would be charged for every employee who doesn’t use those benefits. These fees can run upwards of $500 per unused benefit, which can meaningfully increase total mobility spend.

Service Delivery Fees

Service delivery fees are secondary, per-file management fees charged on every service the RMC coordinates. This fee is in addition to the base move management fee and is typically $100 per service. When an RMC is coordinating three or four services per employee, that cost adds up quickly.

Other Fees

Other fees can include charges for services like customized reporting or access to technology systems, separate from implementation or licensing fees, which are usually disclosed openly. This is only a sampling of the add-on fees an RMC could build into your pricing.

During the RFP process, you and your procurement team are likely reviewing multiple documents from multiple RMCs at once. Pricing should be transparent and straightforward. You shouldn’t have to hunt for add-on fees or calculate actual total cost yourself, but unfortunately, those fees can be easy to miss.

What To Do

To avoid the confusion add-on fees can cause, try the following:

• Request bundled pricing. Specifically ask for it in your RFP and make clear that bundled pricing should include every fee that could possibly be charged.
• Look for transparency. An RMC unwilling to show you its fee calculations, or one that looks substantially less expensive than competitors at first glance, may be using add-on fees to recover revenue from unexpected places.
• Ask about fee escalation. Ask whether an RMC with lower pricing applies annual increases or other escalating fees that raise the cost of individual moves over the life of the contract.
• Lock in pricing. If an RMC’s pricing seems too good to be true and you decide to move forward, ask them to hold that pricing for at least two to three years.
• Brief your review team. Make sure everyone evaluating proposals knows to watch closely for add-on charges. Feel free to share this document with them.
• Build in service fee scenarios. Include detailed relocation scenarios as part of your RFP and require that all related fees be reflected in the response.
• Ask for help. If pricing still seems difficult to untangle, a trusted RMC contact or an independent consultant can help you make sense of it.

How Plus Approaches Pricing

We created this guide because we believe RMC pricing should hold up to scrutiny, not require a decoder ring. Bundled, transparent pricing is the standard we hold ourselves to in every proposal we send.