These are good points. Let me address a few…
@godgeez You make a good point. Billing by the hour tends to hide the value of your work. In that, when you do necessary research, they can’t see that work directly in a deliverable, but it certainly added value to the overall web project. So, instead of billing by the hour, we can price all up front, bring transparency to our prices and give our customers a choice of what they want us to do for them. In your up front price, add in research, show it to the customer, and have the conversation with the client of it’s importance. It’s better than hiding it with an hourly rate and surprising the client later.
@Joel_Hughes Def, customers want an up front estimate. I would say don’t give them an estimate, give them an EXACT price up front. And while you’re at it, guarantee that it will NOT change (unless they submit a ‘change order’ for more/different work). Does that scare you? You totally add value to your relationship with the customer when you give a firm price up front. But, remember, when you do that you add such value, that you can offset the value you have injected into the relationship on guaranteeing an up front price that you can price your services MUCH higher than you currently do. It’s a risk balance, really. You balance the risk of offering an up front firm price to the customer (which is best for them) with a higher price on your end (which is best for you). It’s win-win. Essentially, your price now includes an amount for your work, an amount for the guarantee of your services, a guarantee of an up front price, etc. In the article, I noted that you can price for more things than just design. One thing you can use to price your services higher is to price away the customer’s fear! That is, take away their fear of ‘Joel sure is doing a lot of work, how much is this going to cost me?’ Take that fear away and price for it. When you ‘price everything up front’ you do such a service to your customer. They are more at ease through the project, you have had all of your difficult price discussions and the customer doesn’t have to worry about any ‘surprises.’ But if you do this (upfront pricing), you MUST price MUCH higher than you currently are - I would say by 50% higher. It takes longer to sell up front, but all the while you are being forced to build relationships and that is so good for your business. And, no, we do NOT track any time internally. I fundamentally disagree with pricing my knowledge, experience and expertise by an arbitrary hourly rate. I think it is flawed and I disagree with it on principle. We know we have made money by looking at our financial statements (we don’t need hourly rates). And we know we have taken care of the customer when they say they are happy and send us referrals.
@level2d I have to disagree with you here. You can implement processes at the beginning of your relationships with your customer to create trust between you. If I can’t get my clients to trust me BEFORE we begin a relationship, then they are the wrong client for our firm. If you are ever basing your value to your customer based on how many hours you spend on anything, then you are leaving freakin’ money on the table, big time. You’ll have to get off of the hourly rate TOTALLY to see what I mean (or go through my Creative Coaching Course online). If you want your relationship to flourish with your client, AND you make more money, then stop billing by the hour.
@TheBadger What would you like to be called?