pricing on websites
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@coliver said in pricing on websites:
@mike-davis said in pricing on websites:
@coliver said in pricing on websites:
@mike-davis said in pricing on websites:
The second one says he really doesn't know how long it's going to take, but to trust him that he won't overbill me and he's going to do the best job he can. He tells me that if I pay for hours up front I'll get a better rate, but he can't really tell me how many hours he anticipates using.
This is called "time and materials" and is very common for most contractors and construction projects.
So is bidding on jobs...
Yep not saying they aren't both common. Just saying that neither is a crazy way of doing business and they both have their place in the construction industry. But as @scottalanmiller said that doesn't necessarily translate well to the technical industry.
And both are common in tech. It's just that one is good for customers and one is not, even if the customers don't realize how it works. Customers don't undestand tech and often think it is like construction and shoot themselves in the foot beacuse of it. But it's the best way to make money, so of course it's how we hope they will request that we work.
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I'd just give different hourly rates depending on the type of work. If it's a simple antivirus install or hard drive replacement it's lower. Bigger, more complex jobs are more expensive per hour and require more hours. You can also weed out the work you don't want to do by pricing it much higher this way. Basically, you have to bribe me to do X but if you agree to my insane asking price I'll be forced to do it.
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@wirestyle22 said in pricing on websites:
I'd just give different hourly rates depending on the type of work. If it's a simple antivirus install or hard drive replacement it's lower. Bigger, more complex jobs are more expensive per hour and require more hours. You can also weed out the work you don't want to do by pricing it much higher this way. Basically, you have to bribe me to do X but if you agree to my insane asking price I'll be forced to do it.
Only more per hour if it requires different staff.
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You know guys, I started this thread because I noticed people complained about companies not having pricing on their website. So I looked at the websites of those people and noticed that they didn't have their pricing on their website. I didn't want to call them out on it in that thread, so I thought I would start a new thread to see why it they wouldn't talk to vendors like that, but felt it was fine for their own company. I'm even more confused now.
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@mike-davis I'm finally getting around to updating my own site. I just re-added my private saxophone lesson rates tonight.
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@mike-davis said in pricing on websites:
You know guys, I started this thread because I noticed people complained about companies not having pricing on their website. So I looked at the websites of those people and noticed that they didn't have their pricing on their website. I didn't want to call them out on it in that thread, so I thought I would start a new thread to see why it they wouldn't talk to vendors like that, but felt it was fine for their own company. I'm even more confused now.
Trying to not call me out?
I clearly stated back at the beginning of this thread that I was overruled on that for our website.
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@mike-davis said in pricing on websites:
You know guys, I started this thread because I noticed people complained about companies not having pricing on their website. So I looked at the websites of those people and noticed that they didn't have their pricing on their website. I didn't want to call them out on it in that thread, so I thought I would start a new thread to see why it they wouldn't talk to vendors like that, but felt it was fine for their own company. I'm even more confused now.
But that's not what got discussed. I think that public pricing for consulting is uncommon, partially because it can be confusing if there are a lot of rates. The thing that ended up being discussed, almost immediately, was that rates were not standard but instead fluctuating and then the means by which they are billed.
So while that was the original question, it's almost immediately not where the conversation went.
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@dustinb3403 said in pricing on websites:
My biggest issue with not having a listed price for your services or software is this. If I can't even gauge how much it might cost be to do business, then how can I even begin to understand the value of your services or software.
IE: If I want to by an Amazon Echo or Google Home Mini I can just look up the list price and have a ballpark idea of what I'm going to be spending.
I should have some means of doing that, with any software or service provider. At least I feel I should. .
It boils down on more complicated software that without an SE 99% of people would order the wrong thing.
@mike-davis said in pricing on websites:
@scottalanmiller said in pricing on websites:
Nope, it's the best possible thing for them. Let's them determine their needs, get the best pricing, and not get burned by bad estimates or scope changes. From a customer side, it's literally the best thing I could imagine. Without it, they'd be stuck either paying as they go (which would force everyone into higher prices) or into the scoping disaster. It's the best form of customer protection we could think of.
Don't you have to estimate the hours to figure out how many hours they need to buy?
Why does paying as you go force higher prices?
Because
I have to carry the payroll costs up front. Blocks of hours I could discount 10% -
Listing hourly rates isn’t terribly useful because without a project scope and estimate you don’t know if it will take me 4 hours or 400. It’s like knowing how many gallons of gas I have without knowing the vehicle....
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@dashrender said in pricing on websites:
@mike-davis said in pricing on websites:
@coliver said in pricing on websites:
@mike-davis said in pricing on websites:
The second one says he really doesn't know how long it's going to take, but to trust him that he won't overbill me and he's going to do the best job he can. He tells me that if I pay for hours up front I'll get a better rate, but he can't really tell me how many hours he anticipates using.
This is called "time and materials" and is very common for most contractors and construction projects.
So is bidding on jobs...
Sure, but bidding on jobs at a flat rate means the seller needs to build in fluff time or risk loosing a ton of money (paying employees to work where there are problems, where the client isn't paying them for that work, because it wasn't part of the flat rate consideration).
While I did build in some overhead, the real key is aggressively scoping things in and out of scope. Customer doesn’t provide me with vpn access on time, you get a contract amendment for the wasted time and creeping my scope as I had to setup my own vpn profile. Basically “fining” the customer for bad behavior or their suppliers not delivering in time is how you protect yourself on a flat rate contract.
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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.
I would offer 4 hours @250$ per hour to do a scope discovery project to build the flat rate project.
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@dashrender said in pricing on websites:
@mike-davis said in pricing on websites:
The second reason is you can't put a price on a project like an Office 365 migration. At least I can't afford to without knowing a lot of details about the environment.
I'm not sure you need to price something specific like that.
You might list something like
Cisco firewall support $200/hr
Windows desktop support $100/hr
Unifi hardware support $150/hr
etc
But really, should an O365 migration be a project price and not hourly? You'd have to make the project price significantly more than the anticipated hourly to cover your bases in case there are issues.If you do enough of them you can flat scope them on a base time Plus xxx per mailbox (knowing they average out). Write your scope to assume health AD and exchange, and list the first 4 hours as discovery. If it’s messy you can throw a scope amendment to fix the environment.
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@jaredbusch said in pricing on websites:
Trying to not call me out?
I clearly stated back at the beginning of this thread that I was overruled on that for our website.You have a perfectly valid reason - you're not the owner, so it's not your call. You said that if you were in a position to change that you would. Nothing wrong with that.
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@storageninja said in pricing on websites:
@dashrender said in pricing on websites:
@mike-davis said in pricing on websites:
@coliver said in pricing on websites:
@mike-davis said in pricing on websites:
The second one says he really doesn't know how long it's going to take, but to trust him that he won't overbill me and he's going to do the best job he can. He tells me that if I pay for hours up front I'll get a better rate, but he can't really tell me how many hours he anticipates using.
This is called "time and materials" and is very common for most contractors and construction projects.
So is bidding on jobs...
Sure, but bidding on jobs at a flat rate means the seller needs to build in fluff time or risk loosing a ton of money (paying employees to work where there are problems, where the client isn't paying them for that work, because it wasn't part of the flat rate consideration).
While I did build in some overhead, the real key is aggressively scoping things in and out of scope. Customer doesn’t provide me with vpn access on time, you get a contract amendment for the wasted time and creeping my scope as I had to setup my own vpn profile. Basically “fining” the customer for bad behavior or their suppliers not delivering in time is how you protect yourself on a flat rate contract.
yeah - That's how all those city contracts go, and the reality in almost all of those, they are a near lie - ok not a lie, but the amendments allow for so many caveats that just sneezing basically allows the timeframe and price to be changed at a whim of the vendor. i.e. it's not really a flat rate contract because they (the city contractors) know they'll be blowing this thing out of the water.
So, how often do you seen the need to use the amendment clauses to recoup some issue that wasn't forseen?
I guess, If you really lock it down that tight, you can almost entirely eliminate your risk of lost time putting it completely back on the customer. This allows you to give someone a flat rate appearance while at the same time completely covering for any potential where it doesn't meet your true expectations for building a zero fluff flat contract. But that's only really doable after you have a good amount of experience doing the specific kinds of work needed for the situation.
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@dashrender said in pricing on websites:
@storageninja said in pricing on websites:
@dashrender said in pricing on websites:
@mike-davis said in pricing on websites:
@coliver said in pricing on websites:
@mike-davis said in pricing on websites:
The second one says he really doesn't know how long it's going to take, but to trust him that he won't overbill me and he's going to do the best job he can. He tells me that if I pay for hours up front I'll get a better rate, but he can't really tell me how many hours he anticipates using.
This is called "time and materials" and is very common for most contractors and construction projects.
So is bidding on jobs...
Sure, but bidding on jobs at a flat rate means the seller needs to build in fluff time or risk loosing a ton of money (paying employees to work where there are problems, where the client isn't paying them for that work, because it wasn't part of the flat rate consideration).
While I did build in some overhead, the real key is aggressively scoping things in and out of scope. Customer doesn’t provide me with vpn access on time, you get a contract amendment for the wasted time and creeping my scope as I had to setup my own vpn profile. Basically “fining” the customer for bad behavior or their suppliers not delivering in time is how you protect yourself on a flat rate contract.
yeah - That's how all those city contracts go, and the reality in almost all of those, they are a near lie - ok not a lie, but the amendments allow for so many caveats that just sneezing basically allows the timeframe and price to be changed at a whim of the vendor. i.e. it's not really a flat rate contract because they (the city contractors) know they'll be blowing this thing out of the water.
So, how often do you seen the need to use the amendment clauses to recoup some issue that wasn't forseen?
I guess, If you really lock it down that tight, you can almost entirely eliminate your risk of lost time putting it completely back on the customer. This allows you to give someone a flat rate appearance while at the same time completely covering for any potential where it doesn't meet your true expectations for building a zero fluff flat contract. But that's only really doable after you have a good amount of experience doing the specific kinds of work needed for the situation.
Right, flat rates are basically always just appearance. For them to work, either the customer has to be held to rigid scope which screws customers because scope always needs to change. Or it allows scope to change and the vendor gets to determine how that impacts cost making it not flat rate any more.
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@scottalanmiller said in pricing on websites:
Because you have to assume that they are going to just work for an hour, and deal with continuous billing as you go, it creates a lot of overhead and friction and you have to bill with the assumption that you are context switching on and off. It costs more to provide, it costs more to consume.
If you've paid for a block of hours ,and we are in within my scope for a project on the blocks you bought to deliver (with no weird issues) I have ZERO worries about the bill being disputed.
If your a customer who bills by the 15 minutes and disputes by the 15 minutes get ready for me to OVER document to make sure the bill will stick.
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@storageninja said in pricing on websites:
@scottalanmiller said in pricing on websites:
Because you have to assume that they are going to just work for an hour, and deal with continuous billing as you go, it creates a lot of overhead and friction and you have to bill with the assumption that you are context switching on and off. It costs more to provide, it costs more to consume.
If you've paid for a block of hours ,and we are in within my scope for a project on the blocks you bought to deliver (with no weird issues) I have ZERO worries about the bill being disputed.
If your a customer who bills by the 15 minutes and disputes by the 15 minutes get ready for me to OVER document to make sure the bill will stick.
And then customers getting billed for insane amounts of time spent making documentation!
