Comments on: Why Everyone Should Openly Display Pricing Info http://www.donloper.com/web-design/why-everyone-should-openly-display-pricing-info.html Thu, 09 Feb 2012 01:06:09 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Joshua Steimle http://www.donloper.com/web-design/why-everyone-should-openly-display-pricing-info.html/comment-page-1#comment-1067 Joshua Steimle Mon, 20 Nov 2006 13:15:40 +0000 http://72.47.194.140/uncategorized/why-everyone-should-openly-display-pricing-info#comment-1067 I've found that 99% of clients want a lump sum. This is fairly simple with design projects and other projects where it is easy to predict how much work we will do and what requirements the client will expect. However, when providing web programming services on large, custom projects we've found that it's virtually impossible to set a fixed price and not lose money. The reason is scope creep. While we can easily fix our prices, clients have a hard time fixing their requirements, and it's not easy for us to restrict clients from asking for a little bit here, a little bit there, and soon a project has ballooned to 30% more work than originally anticipated. And yet if we went to the client and aske them to pay 30% more than they agreed to they would throw a fit, because they see everything they asked for as reasonable and well within the scope of the project. This is such a common problem that on larger programming projects we see no fair way to charge other than to go straight hourly. Well, either that or charge a fixed price twice the amount what we would expect. Then we might break even. But if it's hourly then the client shares responsibility with us for the scope of the project. We get paid for our time, and they only pay for what they ask us to do. It's tough in that they don't know what the whole project is going to cost, but why would I put my company in a position where I'm 90% sure we're going to lose money? I've already done that enough times to know it doesn't pay off. I’ve found that 99% of clients want a lump sum. This is fairly simple with design projects and other projects where it is easy to predict how much work we will do and what requirements the client will expect. However, when providing web programming services on large, custom projects we’ve found that it’s virtually impossible to set a fixed price and not lose money. The reason is scope creep. While we can easily fix our prices, clients have a hard time fixing their requirements, and it’s not easy for us to restrict clients from asking for a little bit here, a little bit there, and soon a project has ballooned to 30% more work than originally anticipated. And yet if we went to the client and aske them to pay 30% more than they agreed to they would throw a fit, because they see everything they asked for as reasonable and well within the scope of the project.

This is such a common problem that on larger programming projects we see no fair way to charge other than to go straight hourly. Well, either that or charge a fixed price twice the amount what we would expect. Then we might break even. But if it’s hourly then the client shares responsibility with us for the scope of the project. We get paid for our time, and they only pay for what they ask us to do. It’s tough in that they don’t know what the whole project is going to cost, but why would I put my company in a position where I’m 90% sure we’re going to lose money? I’ve already done that enough times to know it doesn’t pay off.

]]> By: Matthew Reinbold http://www.donloper.com/web-design/why-everyone-should-openly-display-pricing-info.html/comment-page-1#comment-1066 Matthew Reinbold Fri, 17 Nov 2006 11:07:25 +0000 http://72.47.194.140/uncategorized/why-everyone-should-openly-display-pricing-info#comment-1066 Bold move. I've thought for awhile that there needed to be some kind of 'web developer union' to establish a baseline price for service. You correctly point out that the market will do that automatically with the right level of transparency. You toggled back and forth between hourly and project rates. Doing a quick check on your pricing pages they appear to only be for the entire project. Do you find with that size of project that customers prefer a lump sum total or are there still those that prefer hourly? If so, do you do hourly? Bold move. I’ve thought for awhile that there needed to be some kind of ‘web developer union’ to establish a baseline price for service. You correctly point out that the market will do that automatically with the right level of transparency.

You toggled back and forth between hourly and project rates. Doing a quick check on your pricing pages they appear to only be for the entire project. Do you find with that size of project that customers prefer a lump sum total or are there still those that prefer hourly? If so, do you do hourly?

]]> By: Blake Snow http://www.donloper.com/web-design/why-everyone-should-openly-display-pricing-info.html/comment-page-1#comment-1065 Blake Snow Fri, 17 Nov 2006 06:49:19 +0000 http://72.47.194.140/uncategorized/why-everyone-should-openly-display-pricing-info#comment-1065 Nice move, Josh. *quickly thinks of what prices to list on own website* Nice move, Josh. *quickly thinks of what prices to list on own website*

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