pricing on websites
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@mike-davis said in pricing on websites:
@dashrender said in pricing on websites:
So here's an experiment for ya Mike - track hours of your workers, and a normal billing rate for their time. Don't forget to include the amount of time for making these flat rate quotes are part of those projects. Now, when it's all said and done, take the flat rate you quoted, divided by the number of actual spent hours, is it higher or lower than the normal rate asked about above (in my post)?
According to Scott - it will more often than not be higher, but not just higher, significantly higher. This shows that your customers overpaid, and you made money at the expense of your customer. Now - of course, this is good for you, but it's not good for your customer.Did that the other night. It's call staying in business.
Even if I'm making money it doesn't necessarily mean it's bad for my customer. I have one customer where I'm doing the job for slightly more than half of what a competitor quoted them. I would say that's good for my customer. I can do this because of my geographical location and I know their environment really well and scripted a lot of common tasks. I have incentives to be efficient.
No - that means that the other company was screwing them. You instead are doing right by your customer, doing everything to keep costs down.. i.e. real IT.
That said, it's still completely possible that you could run into an issue that takes you 10+ hours to resolve. Assuming you had only 1 hour of sluff time baked in, you (your company) just lost 9 hours of billing. The customer in this case is taking advantage of you.
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@dashrender said in pricing on websites:
@mike-davis said in pricing on websites:
@dashrender said in pricing on websites:
So here's an experiment for ya Mike - track hours of your workers, and a normal billing rate for their time. Don't forget to include the amount of time for making these flat rate quotes are part of those projects. Now, when it's all said and done, take the flat rate you quoted, divided by the number of actual spent hours, is it higher or lower than the normal rate asked about above (in my post)?
According to Scott - it will more often than not be higher, but not just higher, significantly higher. This shows that your customers overpaid, and you made money at the expense of your customer. Now - of course, this is good for you, but it's not good for your customer.Did that the other night. It's call staying in business.
Even if I'm making money it doesn't necessarily mean it's bad for my customer. I have one customer where I'm doing the job for slightly more than half of what a competitor quoted them. I would say that's good for my customer. I can do this because of my geographical location and I know their environment really well and scripted a lot of common tasks. I have incentives to be efficient.
No - that means that the other company was screwing them. You instead are doing right by your customer, doing everything to keep costs down.. i.e. real IT.
There is no way to know that. He's keeping prices lower than a known overcost, but that's all. We don't know if he is low, or just lower.
What if there was another competitor that came into the market. And he cost 50% more than Mike, but still way less than the other guy. He could use the same logic that since he's cheaper than the othe guy, he HAS to be a deal... but that doesn't hold up, because he's So much more than Mike.
See the flaw?
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And what if I randomly quote double that other guy (so 400% of Mike) does that change the other guy from gouging to a proven good deal just because I'm willing to overquote?
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@jaredbusch said in pricing on websites:
I suspect you are giving away a ton of your time in order to make lower fixed rate deals.
I know I did this when I used to do flat rates.. i never included my time of making the quotes.. but assuming I had an employee doing that work, who's paying them? Me - out of my profits? That's crazy talk.. The client is getting free work in this case - and that's just not good for business.
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@dashrender said in pricing on websites:
That said, it's still completely possible that you could run into an issue that takes you 10+ hours to resolve. Assuming you had only 1 hour of sluff time baked in, you (your company) just lost 9 hours of billing. The customer in this case is taking advantage of you.
And eventually, someone has to pay for that lost revenue. Either that customer will pay later or, more likely, all the customers will pay a little. All of them losing just a little to make up for the overruns. Since the customers are the only source of money, it has to happen.
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@dashrender said in pricing on websites:
@jaredbusch said in pricing on websites:
I suspect you are giving away a ton of your time in order to make lower fixed rate deals.
I know I did this when I used to do flat rates.. i never included my time of making the quotes.. but assuming I had an employee doing that work, who's paying them? Me - out of my profits? That's crazy talk.. The client is getting free work in this case - and that's just not good for business.
Doesn't matter if you remember to factor it in, it's there somewhere. Either it's part of your rate, or extra on the quote... but it is always there.
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@scottalanmiller said in pricing on websites:
@dashrender said in pricing on websites:
@mike-davis said in pricing on websites:
@dashrender said in pricing on websites:
So here's an experiment for ya Mike - track hours of your workers, and a normal billing rate for their time. Don't forget to include the amount of time for making these flat rate quotes are part of those projects. Now, when it's all said and done, take the flat rate you quoted, divided by the number of actual spent hours, is it higher or lower than the normal rate asked about above (in my post)?
According to Scott - it will more often than not be higher, but not just higher, significantly higher. This shows that your customers overpaid, and you made money at the expense of your customer. Now - of course, this is good for you, but it's not good for your customer.Did that the other night. It's call staying in business.
Even if I'm making money it doesn't necessarily mean it's bad for my customer. I have one customer where I'm doing the job for slightly more than half of what a competitor quoted them. I would say that's good for my customer. I can do this because of my geographical location and I know their environment really well and scripted a lot of common tasks. I have incentives to be efficient.
No - that means that the other company was screwing them. You instead are doing right by your customer, doing everything to keep costs down.. i.e. real IT.
There is no way to know that. He's keeping prices lower than a known overcost, but that's all. We don't know if he is low, or just lower.
What if there was another competitor that came into the market. And he cost 50% more than Mike, but still way less than the other guy. He could use the same logic that since he's cheaper than the othe guy, he HAS to be a deal... but that doesn't hold up, because he's So much more than Mike.
See the flaw?
You're right, I was giving credit where it wasn't due.
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@dashrender said in pricing on websites:
That said, it's still completely possible that you could run into an issue that takes you 10+ hours to resolve. Assuming you had only 1 hour of sluff time baked in, you (your company) just lost 9 hours of billing. The customer in this case is taking advantage of you.
You're absolutely right. It has happened and I'm sure it will happen again. I just can't let it happen more often than not.
In my experience when I have quote a flat rate job the customer has never been upset about the bill at the end of the job. On hourly work, I've had to "have a sit down" to explain all the hours. This is after detailed invoices. -
@dashrender said in pricing on websites:
@jaredbusch said in pricing on websites:
I suspect you are giving away a ton of your time in order to make lower fixed rate deals.
I know I did this when I used to do flat rates.. i never included my time of making the quotes.. but assuming I had an employee doing that work, who's paying them? Me - out of my profits? That's crazy talk.. The client is getting free work in this case - and that's just not good for business.
Right, and as if said it is nearly impossible to be anything other than one or the other. But not impossible. The very rare case of the flat rate and hourly matching , does exist. But it is rare. And rare for a reason. There is more risk to a flat rate that low.
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@mike-davis said in pricing on websites:
@dashrender said in pricing on websites:
That said, it's still completely possible that you could run into an issue that takes you 10+ hours to resolve. Assuming you had only 1 hour of sluff time baked in, you (your company) just lost 9 hours of billing. The customer in this case is taking advantage of you.
You're absolutely right. It has happened and I'm sure it will happen again. I just can't let it happen more often than not.
In my experience when I have quote a flat rate job the customer has never been upset about the bill at the end of the job. On hourly work, I've had to "have a sit down" to explain all the hours. This is after detailed invoices.Then tell that customer to go fly a kite. Oh, and bill them for that time too.
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@mike-davis said in pricing on websites:
@dashrender said in pricing on websites:
That said, it's still completely possible that you could run into an issue that takes you 10+ hours to resolve. Assuming you had only 1 hour of sluff time baked in, you (your company) just lost 9 hours of billing. The customer in this case is taking advantage of you.
You're absolutely right. It has happened and I'm sure it will happen again. I just can't let it happen more often than not.
In my experience when I have quote a flat rate job the customer has never been upset about the bill at the end of the job. On hourly work, I've had to "have a sit down" to explain all the hours. This is after detailed invoices.So when you sit down with them.. you explain, if this would have been flat rate, it would have cost at least 4 hours more time because 2 hours for scope building and 2 hours fluff time built in.. and dthat's assuming you guessed that it would take the exact number of hours it did take.
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@jaredbusch said in pricing on websites:
@mike-davis said in pricing on websites:
@dashrender said in pricing on websites:
That said, it's still completely possible that you could run into an issue that takes you 10+ hours to resolve. Assuming you had only 1 hour of sluff time baked in, you (your company) just lost 9 hours of billing. The customer in this case is taking advantage of you.
You're absolutely right. It has happened and I'm sure it will happen again. I just can't let it happen more often than not.
In my experience when I have quote a flat rate job the customer has never been upset about the bill at the end of the job. On hourly work, I've had to "have a sit down" to explain all the hours. This is after detailed invoices.Then tell that customer to go fly a kite. Oh, and bill them for that time too.
You could always offer them a flat rate - but be aware that it will be at least 4 hours costs over what you 'think' the job will cost because of the scope building time (not job related) and the risk fluff time.
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@dashrender said in pricing on websites:
@jaredbusch said in pricing on websites:
@mike-davis said in pricing on websites:
@dashrender said in pricing on websites:
That said, it's still completely possible that you could run into an issue that takes you 10+ hours to resolve. Assuming you had only 1 hour of sluff time baked in, you (your company) just lost 9 hours of billing. The customer in this case is taking advantage of you.
You're absolutely right. It has happened and I'm sure it will happen again. I just can't let it happen more often than not.
In my experience when I have quote a flat rate job the customer has never been upset about the bill at the end of the job. On hourly work, I've had to "have a sit down" to explain all the hours. This is after detailed invoices.Then tell that customer to go fly a kite. Oh, and bill them for that time too.
You could always offer them a flat rate - but be aware that it will be at least 4 hours costs over what you 'think' the job will cost because of the scope building time (not job related) and the risk fluff time.
4 hours? Hahahahahahahahahahha
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@mike-davis said in pricing on websites:
@dashrender said in pricing on websites:
That said, it's still completely possible that you could run into an issue that takes you 10+ hours to resolve. Assuming you had only 1 hour of sluff time baked in, you (your company) just lost 9 hours of billing. The customer in this case is taking advantage of you.
You're absolutely right. It has happened and I'm sure it will happen again. I just can't let it happen more often than not.
In my experience when I have quote a flat rate job the customer has never been upset about the bill at the end of the job. On hourly work, I've had to "have a sit down" to explain all the hours. This is after detailed invoices.Them not being upset is not a guide, they don't know what it could have or should have cost, only what you told them. Of course they aren't upset, they decided ahead of time to spend the money - even if it was more than it should have been. This is a standard marketing ploy to increase prices and one that I've had to deal with project managers about - it's a trick PMs use to prey on the emotions of managers.
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@dashrender said in pricing on websites:
@mike-davis said in pricing on websites:
@dashrender said in pricing on websites:
That said, it's still completely possible that you could run into an issue that takes you 10+ hours to resolve. Assuming you had only 1 hour of sluff time baked in, you (your company) just lost 9 hours of billing. The customer in this case is taking advantage of you.
You're absolutely right. It has happened and I'm sure it will happen again. I just can't let it happen more often than not.
In my experience when I have quote a flat rate job the customer has never been upset about the bill at the end of the job. On hourly work, I've had to "have a sit down" to explain all the hours. This is after detailed invoices.So when you sit down with them.. you explain, if this would have been flat rate, it would have cost at least 4 hours more time because 2 hours for scope building and 2 hours fluff time built in.. and dthat's assuming you guessed that it would take the exact number of hours it did take.
And bill them for explanation time, that's like an option quote time.
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@jaredbusch said in pricing on websites:
@dashrender said in pricing on websites:
@jaredbusch said in pricing on websites:
@mike-davis said in pricing on websites:
@dashrender said in pricing on websites:
That said, it's still completely possible that you could run into an issue that takes you 10+ hours to resolve. Assuming you had only 1 hour of sluff time baked in, you (your company) just lost 9 hours of billing. The customer in this case is taking advantage of you.
You're absolutely right. It has happened and I'm sure it will happen again. I just can't let it happen more often than not.
In my experience when I have quote a flat rate job the customer has never been upset about the bill at the end of the job. On hourly work, I've had to "have a sit down" to explain all the hours. This is after detailed invoices.Then tell that customer to go fly a kite. Oh, and bill them for that time too.
You could always offer them a flat rate - but be aware that it will be at least 4 hours costs over what you 'think' the job will cost because of the scope building time (not job related) and the risk fluff time.
4 hours? Hahahahahahahahahahha
I borrowed that from Scott.
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@Mike-Davis do you get email status about various things from the clients. Assuming that you do and have email rules to put them in folders, do you check those folders?
I do. Multiple times a day. It usually just a glance, but I check.
I also bill a half an hour to one hour a week for it.
Just to make sure shit ain’t broke.
This is work that means it is billed.
Are you counting that?
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@jaredbusch said in pricing on websites:
@Mike-Davis do you get email status about various things from the clients. Assuming that you do and have email rules to put them in folders, do you check those folders?
I do. Multiple times a day. It usually just a glance, but I check.
I also bill a half an hour to one hour a week for it.
Just to make sure shit ain’t broke.
This is work that mean it is billed.
Are you counting that?
It's possible that an hour isn't even enough considering the job switching time lost.
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@dashrender said in pricing on websites:
@jaredbusch said in pricing on websites:
@Mike-Davis do you get email status about various things from the clients. Assuming that you do and have email rules to put them in folders, do you check those folders?
I do. Multiple times a day. It usually just a glance, but I check.
I also bill a half an hour to one hour a week for it.
Just to make sure shit ain’t broke.
This is work that mean it is billed.
Are you counting that?
It's possible that an hour isn't even enough considering the job switching time lost.
Not anymore as I make it a routine and is not an interupt.
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@jaredbusch said in pricing on websites:
@dashrender said in pricing on websites:
@jaredbusch said in pricing on websites:
@Mike-Davis do you get email status about various things from the clients. Assuming that you do and have email rules to put them in folders, do you check those folders?
I do. Multiple times a day. It usually just a glance, but I check.
I also bill a half an hour to one hour a week for it.
Just to make sure shit ain’t broke.
This is work that mean it is billed.
Are you counting that?
It's possible that an hour isn't even enough considering the job switching time lost.
Not anymore as I make it a routine and is not an interupt.
Granted, finding an issue turns into a new ticket event. So that is always an interupt. But no different than any new incoming ticket.
