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Dealing with cheap clients
ggmike




msg:779880
 12:56 am on Jun 19, 2004 (gmt 0)

Hi, I've been working with a client for the past few months. I created a website for her at a very cheap price and ended up getting a bad deal because it turned out to be alot of work. Now, I'm charging her my normal rate for updates ($75/hr) and she's begun complaining about my prices. I told her to go find someone else. Now she's complaining that she has found people who will do it for $20/hr and that I'm a big ripoff because I charge more. How do you guys deal with clients like this? It's really frustrating and I think I'm just going to tell her to buzz off and have someone else do it.

 

vkaryl




msg:779881
 1:13 am on Jun 19, 2004 (gmt 0)

Um - I say, "I'm pleased that you've found someone with whom you can work more productively. Should you need consultation in future, you have my email. Have a wonderful life; au revoir." And mentally add "don't call me I'll call you - NOT!"

Sometimes you just HAVE to fire the client....

Shane




msg:779882
 1:18 am on Jun 19, 2004 (gmt 0)

It's really frustrating and I think I'm just going to tell her to buzz off and have someone else do it.

And add "It's not profittable for me to work with you.". (But just say it to yourself. :) )

Say good-bye, be polite, add call me if you have trouble and then charge them the going rate, and nothing less if they come back.

..... Shane

jo1ene




msg:779883
 1:37 am on Jun 19, 2004 (gmt 0)

Sometimes you just HAVE to fire the client....

I wish I could fire one of my client's but he still owes me too much money. I'll make a fortune in late fees if he ever pays up.

Yeah, you can't sweat it. I have a competitor in town that does the $39.95 for the home page and $9.95 each additional page thing. They seem to have quite a loyal following, even if all of their sites suck out loud.

I think you're better off charging more and doing good work. Then, the theory goes, you'll attract the higher budget customrs. I'm still waiting for that to matrialize, but I think it's a good rationale.

In fact, I remember going to a Chamber of Commerce event and telling somone that I was in web design. He said somthing like, "Hey, that's a $5,000 a pop business, right?" I admitted that I usually run under $1,000. He wasn't impressed.

Which reminds me of my art teacher telling me to make sure to charge big bucks for my paintings. That way people will think that they're worth something.

vkaryl




msg:779884
 1:53 am on Jun 19, 2004 (gmt 0)

Next time some cigar-smoking high-roller says "$5k a pop business" you need to smile (show a LOT of teeth!) and say, "well, that's the little guys, y'know?"

He's bound to believe he needs you....

jo1ene




msg:779885
 1:56 am on Jun 19, 2004 (gmt 0)

If only I was so fast on the draw!

vkaryl




msg:779886
 2:06 am on Jun 19, 2004 (gmt 0)

Cultivate it, luv. NOTHING is bound to make one a more attractive (business!) proposition than promulgating the belief that one has NO need for whatever the schmuck is offering....

[Another caveat: I grew up in Las Vegas, so a lot of my attitudes were formulated in that atmosphere - some of my hard-nosed edges might not work in a softer climate....]

ggmike




msg:779887
 2:17 am on Jun 19, 2004 (gmt 0)

Thanks guys, I'm getting ready to drop this client like a bad habit (as soon as I get paid).

One thing that never ceases to amaze me is how diversified the price ranges are for webdesign. Theres people charging all the way from $10 to $200 an hour. Unfortunately the clients tend to think its "all the same"

Funny how you don't see this type of effect with other professions like mechanics, lawyers, plumbers, etc... Prices may vary, but theyre usually all around the same ballpark.

vkaryl




msg:779888
 2:34 am on Jun 19, 2004 (gmt 0)

Not actually true in THIS area: until 8/2002 I worked for a contractor with a plumbing business as well. Pricing was $49/hr + time-&-1/2 after 5/holidays/weekends. He's the "low end" guy, quality work nothwithstanding (I DON'T work for him any more, but he's STILL the one I call for plumbing problems....) The "high end" guy is $190/hour + time-&-1/2 etc. and a good friend of mine is suing him because he screwed her irrigation system to the point of no return.... she may win, or not, but his name in certain circles is "orange berg" (only a plumber could know and love it....)

NYDrifter




msg:779889
 3:05 am on Jun 19, 2004 (gmt 0)

I have gotten into the habit of putting the hourly maintenance cost right into the contabct at the beginning.l This way there is no big surprise later on.

I also have found I can get them to pre-purchase blocks of maintenance hours by offering a discount. This takes care of the issue of having to worry about them paying me later after runnoing up a big bill.

I have actually required some clients, especially those that have been a PIA during the build, to purchase the maintenance plan before I would do any updates. (In these case I knew that they were going to be slow to pay based on past history, so I was covering my A..)

So the guy found someone who can do it for a third... good for him... but as a few of these posts point out, you get what you pay for.

sanity




msg:779890
 7:17 am on Jun 21, 2004 (gmt 0)

This is why I never work at a discounted rate. They don't see it as a discount - they see it as what you'll be prepared to accept all time. And what they expect.

Plus maybe it's just me but I find the clients that want the cheapest prices are often the most difficult too.

EileenC




msg:779891
 1:17 pm on Jun 21, 2004 (gmt 0)

It's absolutely the same with copywriting and content writing. Lowest budgets = highest maintenance clients. Lowest budgets = don't recognize, understand, or care about high quality work and how it will give them a high ROI. When bidding for content jobs, I'll occasionally run up against someone who asks why I charge so much, since they can get the same thing for $5; why do I charge 100 times as much? I just pretty much smile nicely, thank them for the inquiry, and tell them unfortunately we're not the right fit. It is a total waste of time to try to educate prospects like these on the value of what you do; don't even bother.

Tor




msg:779892
 1:27 pm on Jun 21, 2004 (gmt 0)

I totally agree with you Eileen! It`s simly a waste of energy trying to argue or reason with people like that. My advice is simply to stay away from them if you can. ;)

woop01




msg:779893
 1:29 pm on Jun 21, 2004 (gmt 0)

What I love to laugh at are the web designers who preach the "you get what you pay for" mantra and charge huge prices but produce less than the college student who does it for 10% the price. In my niche there are quite a few of them.

I've got one competitor who actually used the "you get what you pay for" cliche to explain why he charges $150/year for domain registration.

The idea that higher prices = higher quality is a myth.

webwoman




msg:779894
 8:21 pm on Jun 21, 2004 (gmt 0)

ggmike, I think your problem with this particular client stems from the fact that you *started* at discount rates. I have taken a few clients on 'discounted rates' - but went out of my way to make sure they understood these were not regular rates right from the start. Even then, they never seem to be willing to pay the higher regular rate later. Value and Money are relative concepts - and they differ from one mind to another :)

ggmike




msg:779895
 9:32 pm on Jun 21, 2004 (gmt 0)

Its not so much that I started the job at a discount rate... I quoted a fixed price for the whole project, but she ended up demanding all this extra stuff and I (like an idiot) did most of it - hence why it became a bit of a disaster. Eventually I said thats all I'm going to do, and any extra work will cost XX amount of money per hour.

I really don't know how these people stay in business charging $20 an hour, although I'm going to assume that they charge for phone calls, meetings, and emails (I don't and probably should).

In any case, I think my new plan will be to just avoid these types of clients (I should have seen the warning signs with this one) and also make sure I discuss some type of retainer plan from the very beginning so that they know the maintenance and updates won't be cheap.

I've just reached my 1 year anniversary of freelancing and looking back I can see I've learned so much... to bad I learned it all the hard way. :(
Oh well, at least I love my job ;)

SEOMike




msg:779896
 9:48 pm on Jun 21, 2004 (gmt 0)

assume that they charge for phone calls, meetings, and emails (I don't and probably should).

Now, now.... nobody likes the "lawyer" fee structure.

Here's what you should think about. For a design project, get a sketch, and a complete outline of pages to be made. Anything over that, make them submit a signed change order (like in construction) and be sure they understand that any change orders are not part of the original bid but are billed hourly.

Once the reputation is there, you can charge what you want (as long as the work reflects the reputation) We charge more than other guys, give better results than other guys, and everybody's happy. Structure is the key.

Good luck.

sanity




msg:779897
 10:33 pm on Jun 21, 2004 (gmt 0)

Its not so much that I started the job at a discount rate... I quoted a fixed price for the whole project, but she ended up demanding all this extra stuff and I (like an idiot) did most of it - hence why it became a bit of a disaster.

I add this to all my estimates (note I don't call them quotes). It definitely helps:

"These figures are an estimate, not a quote. They are based on information provided, and may be inappropriate if additional information is forthcoming, or job specifications change. It is valid for 30 days."

Shane




msg:779898
 10:57 pm on Jun 21, 2004 (gmt 0)

It's called scope creep.

Its not so much that I started the job at a discount rate... I quoted a fixed price for the whole project, but she ended up demanding all this extra stuff and I (like an idiot) did most of it - hence why it became a bit of a disaster. Eventually I said thats all I'm going to do, and any extra work will cost XX amount of money per hour.

If you are going to give a fixed or relatively fixed price quote, know what is included and have that defined in the text of the agreement (e.g. so many pages, fixed text, three images per page maximum). Also define what is not included (no database connection, no shopping cart, no scrolling images, ...). You have now defined the scope of the work. Some people think scope is just what is included. Good scope definitions also have what is not included so that the client can not misunderstand. An example would be, in-scope, three images, out-of-scope, finding and selecting the three images.

Itemize and number what you will do in the written agreement.

When you consider you have finished the assignment, write and send an "end of assignment" letter. You can also describe how each of the numbered items has been delivered.

If I hire you, and I want to really negotiate you into the ground, I'll get you to agree to a fixed price before all the details are worked out, then I'll include some costly details. On the other hand, if you are doing a "time and materials" contract, then I'll let you know everything, especially the large items up front so I know what it will cost.

Costly lesson, but good lessons aren't cheap. :)

..... Shane

vkaryl




msg:779899
 12:07 am on Jun 22, 2004 (gmt 0)

Re SEOMikes's analogy: this is why I use an actual construction package in my accounting program even though what I DO is design and run websites.

It's the most effective way I've found so far to bill appropriately. AND being's it's a very professional package, the client sees UP FRONT that you are a professional. Sometimes that "vision" is all it takes to keep the client from becoming a "gimme" monster.

johntabita




msg:779900
 3:03 am on Jun 22, 2004 (gmt 0)

Higher prices do not necessarily mean higher quality. However, if you have the lowest price, then either quality or service has to suffer. No company can successfully compete (at least not for long) by having the lowest price, the best service and the highest quality.

I'm learning that it all comes down to value -- not what I can convince the client is valuable, but what he/she actually considers to be valuable. For some clients, that will be the best possible price. For others, it will be having an expert they trust (quality and service).

I think that the key is to figure out which two you value and seek clients that value the same ones. For me, I pick quality and service. One good reason for this is that my highest-paying clients are also the easiest to work with.

[edited by: stuntdubl at 3:57 pm (utc) on June 22, 2004]
[edit reason] No urls, thanks. See TOS [webmasterworld.com] [/edit]

sazhazman




msg:779901
 3:12 pm on Jun 22, 2004 (gmt 0)

Ask your client if his competitors who may be cheaper do the same quality of work as he does.

I used that line once, got me the job.

Easy_Coder




msg:779902
 4:47 pm on Jun 22, 2004 (gmt 0)

$20 an hour... nice. After taxes they're making around what, roughly $12 an hour? I'd imagine their skills are worth just that; $12 an hour! I'd bet your customer comes crawling back complaining that the these jokers are not nearly as skilled. Which is why you leave the relationship on good solid terms.

digitalv




msg:779903
 9:31 pm on Jun 22, 2004 (gmt 0)

$20 an hour... nice. After taxes they're making around what, roughly $12 an hour? I'd imagine their skills are worth just that; $12 an hour! I'd bet your customer comes crawling back complaining that the these jokers are not nearly as skilled. Which is why you leave the relationship on good solid terms.

And when they do come crawling back, give them this letter and make them sign it before you'll do any work:

Dear <your name>,

I, <customer name>, am very very very very very very sorry for doubting you. I have seen the light and the price you charge is more than reasonable in this industry. The cheap ass designer I switched to was a bucket of crap. You are the best designer in the world. You are the messiah of web design, and they should have talked about you in the Bible like "The father, the son, the holy ghost, and <your name>".

I will never doubt you again.

Sincerely,
<the customer>


iamlost




msg:779904
 9:52 pm on Jun 22, 2004 (gmt 0)

Complaining price comparison shopping customers are a pain in every extremity, oriface, muscle, organ, bone, and joint of the body!

I smile at such clients and relate the following story:

Years ago I was in the business of selling, installing, and servicing gas fireplaces. A customer told me that he had a price from a competitor that was several hundred dollars lower than my estimate. He denied any difference in product or installation. He declined to put both estimates on the table for point by point comparison. I declined to lower my price. My competitor unloaded several cartons in the customer's driveway and left - installation had not been included in the written quote (only verbally implied - and denied). In the end the customer paid a thousand dollars over my price (I declined the installation).

I then smile again and say:
You know exactly what you will get at what cost from me. Are you absolutely certain about the competing offer?
If so, I hope you will be very happy working with them. We must have coffee sometime.
If not, shall we begin?

The two keys to all good business relationships:

  1. clear and detailed communication.
  2. clear and detailed contract.

percentages




msg:779905
 10:05 am on Jun 23, 2004 (gmt 0)

digitalv, You crack me up......we could be partners we think so much alike!

Do exactly what digitalv suggested, make them eat dirt. If you are worth your weight in salt it shouldn't be a problem.

You have to be in control, you have to show no fear, you have to instill confidence in your clients.

Some people will be selling "snake oil" in this scenerio, if those folks succeed good luck to them and shame on those of us that are offering real solutions that fail!

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