Pricing
It's hard to get right
@curtismchale
Method: Hourly
- Probably where you start since it seems to make sense
- I think the only thing worse is working for nothing
- You earn more by taking longer
- Clients pay less by talking you in to taking less time
- How to figure out your hourly rate
That is an adversarial relationship from the start!
Method: daily
- Similar to hourly but abstracts the unit of time to a day
- Helps push the focus more towards results
- But not that much really
Still a fairly adversarial relationship
Method: Weekly
- A further abstraction of time unit in to a week
- In a week you can accomplish real goals
- Allows you to switch tasks even if you estimated on them already
- If clients don't deliver content in time then the project takes another week and costs more
- I have no recourse if a client decides I'm a hack and stops an 8 week project after week 1
- I wrote about weekly pricing before
- I've talked about weekly pricing before
Method: Flat/Fixed
- 2nd most used pricing method I've seen
- Quote on features A, B, C and deliver the features
- Helps protect from overages
- If C is stupid then you have to go estimate again
- that always felt like a waste of time to me
- I've made $500/hour and $20/hour with this
Method: Value
- this is a very 'pure' definition
- replace a $50k tool with $20k of work is a good value
- even if it only took 10 minutes
- can feel like you're just charging based on the client's ability to pay which never felt quite right to me
Method: Conversion
- bringing a valid lead that results in a sale
- this is really what affiliate marketing is
- I've seen it in eCommerce and Real Estate
- 0 risk for clients since if they make nothing you make nothing
- you better know your stuff
What I use
I use weekly pricing!!!!
- I'm terrible at context switching
- Means I'm not waiting for clients
- Way less stress for me
- Means I have a happy wife (very important)
Effective Hourly rate
- 10 hours with $1000 billable is $100/hour
- 20 hours with $1000 billable is $50/hour
- I make sure that my effective hourly matches with billable time
- Some are under/over I just don't want to see a huge under/over
Price Anchoring
- if you talk a $10k car down to $8k you feel like you got a deal
- find that same car for $8k and you don't feel like you got a deal
- so I 'anchor' my weekly costs based on the client's earnings
- WP Migrate DB Pro
- saves me more than it's cost most weeks of the year
- probably won't work if you build sites for local barbershops
Questions about Weekly Pricing
- essentially 1 week sprints for goals
- what if I miss a milestone?
- what if a project takes longer?
- prepayment and refunds
- but what about being busy for 4 weeks
Should Speed Affect Pricing?
- should I be charging less because I'm fast?
HELL NO!!
You're fast because you have experience, typically charge more
Dealing with Price Dickering
You say it costs $1500 and they say how about $1000
Yes some clients are just bad and will always drive you down
Most are really saying that you haven't shown your value
It's hard to touch what we do so it's easy to say it's worth little
Extra Pricing Considerations
How many people do you report to?
Are you talking to the actual decision maker?
Are they actually invested in the project or just doing a job?
How do they want to communicate?
- daily calls
- project management system?
Reading
Pricing
By curtismchale
Pricing
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