Business Bricks

Stephen says:
You could post a comment on a website that is thought provoking and then get people to post comments to write the article for you. Have you tried that Matt?
by Stephen on 2 Nov

Andy Bell says:
Haha… we were discussing this problem yesterday (but didn’t know that ‘charging by cost vs charging by value’ was the term for it).

We finished a project ahead of schedule and the client was very happy. Then we thought maybe it would be nice to refund some of the project fee, as the site hadn’t cost as much as we had anticipated.

I guess we are not natural born business people, but charging by cost does seem the nice (most honest, even?) way to do business.

I’d be interested to hear what other Brickies think - as most people seem to have a very wholesome attitude to business.
by Andy Bell on 3 Nov

Rachel says:
This is the thing that makes me desperate to sell more products and less services.

It didn’t take me long in business to notice that people (even people who said they were totally skint) were perfectly happy to cough up money for products (such as domain names and web hosting) even if I was making 300% markup, but said they could pay hardly anything for hours worked (then even 10% profit would be too much).

Has anybody else experienced this phenomenon?
by Rachel on 4 Nov

Rachael Wyatt says:
We do exactly the same thing - Once we have discussed the customers requirements we can put together a proposal based on our knowledge of how long it takes to do something properly. Because some customers want more than others (picture reseach, copywriting etc) we factor it in and always quote predicted days AND potential days - predicated days is (fairly obviously) how long it should take, and potential days is how long it could take if for example we need to make more revisions or the scope changes slightly as we develop ideas.

Once the project starts we timesheet (this has the added benefit of us validating our estimates in the future) but it also means that if the project comes in under the proposal the customer only pays for the time we spent.

We consider this a win-win situation - from the customer’s point of view they know that if the project comes in under estimate they pay less (and this also helps keep the project momentum) and from our point of view we don’t have the deflation of knowing that we are going over budget and effectively working for nothing.

So long as you rigorously maintain the same quality of work, it makes customers happy when they get an effective site that they love, on time, and under budget. However, if the project does start to go over predicted days because you are being asked to do more by your customers, then that’s when you know that they are happily paying for value.
by Rachael Wyatt on 4 Nov