homepage Welcome to WebmasterWorld Guest from 54.204.215.209
register, free tools, login, search, subscribe, help, library, announcements, recent posts, open posts,
Pubcon Website
Visit PubCon.com
Home / Forums Index / WebmasterWorld / Professional Webmaster Business Issues
Forum Library, Charter, Moderators: LifeinAsia & httpwebwitch

Professional Webmaster Business Issues Forum

    
Sample maintenance contracts - anyone?
looking to switch billing from hourly to contracted
brandi01




msg:779131
 2:25 pm on Jan 14, 2003 (gmt 0)

I have been billing all my clients for website maintenance on an hourly basis for several years now (after the initial development and maintenance contract expires). Basically I would include X number of months basic maintenance with the website development contract and bill by the hour after the contract expired.

I've been reading a lot of threads lately about "nickle and diming" clients, and I started thinking a change may need to be made in my billing.

Does anyone have any examples or excerpts of maintenance contracts they would be willing to share?

Also, for those who use contracts, do you discount your "standard" hourly rate for a client that signs an extended maintenance contract?

How long are your normal contracts (i.e. 1 year)

What if they are paying $x.xx per month and no maintenance is required for that month, do you roll that time over into the next month.

Thanks everyone.

 

paragon




msg:779132
 4:38 pm on Jan 14, 2003 (gmt 0)

hi brandi01,

There is a similar discussion at [webmasterworld.com...] about fees, and arrangements and contracts.

I recently provided a client with a service maintenance/management agreement.

In summary, its 2 options:

(1) Time Blocks - my per hour rate (different for design, seo, email mktng mgmt, programming) [x] 10, 20, 30 hour blocks - this one could be rolled over - and you could give a limit of 3 months to use time.

(2) Retainer - per scope of project, or also per time block. This provides the client an easy/budgetable dollar figure per month. Retainers offered in 3, 6, and 12 month terms.

To find out more about the industry averages for pricing:
[btobonline.com...]
You can average out for seo, as they don't cover it in this article.

Q: Does anyone have any examples or excerpts of maintenance contracts they would be willing to share?

A: Try [onlinewebtraining.com...]

Q: ...do you discount your "standard" hourly rate for a client that signs an extended maintenance contract?

A: I provide a 10% discount to clients who take me up on the 12 month retainer. Maybe a 5% discount on the 6 month term. This is to incentivize them to retain me for a longer term - my preference is to work with a client long term, so this works well.

Q: How long are your normal contracts (i.e. 1 year)
A: 3, 6 ,12 months

Q: What if they are paying $x.xx per month and no maintenance is required for that month, do you roll that time over into the next month.

A: If retainers, then the monthly needs to be paid anyway. If they purchase time blocks, then you could roll them over.

Hope this helps.

brandi01




msg:779133
 6:50 pm on Jan 14, 2003 (gmt 0)

thanks paragon.

I had been following the thread you referred to, which is partly what prompted me to ask for more detail about what people tend to include/not include in their website maintenance contracts. I don't do much seo, but I have always concentrated on "user/search engine friendly" websites.

I'm more looking for info on website maintenance than seo, however I appreciate all you feedback, as it does give me some general ideas.

Thanks again.

Syren_Song




msg:779134
 7:04 pm on Jan 14, 2003 (gmt 0)

Hi Brandi01.

Here's thread I started that might help you as far as what to include with Site Maintenance [webmasterworld.com]. I had some of the same questions as you do, which is probably why I'm following your thread now. ;)

paragon




msg:779135
 7:15 pm on Jan 14, 2003 (gmt 0)

hi brandi01,

Thanks for your comments. The examples for pricing and terms would apply in your situation. The contracts may or may not. Of course, the points in the contracts I sent you do not focus on website maintenance, but SEO terms of agreements.

I might have some website maintenance agreements hanging around. When I find it, I'll post it for you.

paragon




msg:779136
 7:21 pm on Jan 14, 2003 (gmt 0)

Here's one I found. Hope "travoli" does not mind the length.
-----------------------------------------------------------

WEBSITE MAINTENANCE AGREEMENT

This contract is by and between «CustCompany» hereafter "Customer" and «Company», a company located in «City», «State», hereafter "Company".

Relationship: Company is acting as an independent contractor, and is not acting as an employee of Customer.

The Customer desires «Company» to enter into a WEBSITE MAINTENANCE AGREEMENT for the following projects:



1.0 Authorization: Customer is engaging «Company» for the specific project of developing and/or improving an existing World Wide Web Site. The Customer will establish a separate contract with an ISP or Web Hosting provider, or «Company» will establish one on behalf of the Customer. The Customer hereby authorizes «Company» to access this account, and authorizes the Internet Service Provider to provide Company with "write permission" for the Customer's web page directory, cgi-bin directory, and any other directories or programs, which need to be accessed by «Company» for this project.

2.0 Maintenance and Changes: Company will provide minor updates to the web site for a period of 6 months. Minor updates should not exceed more than 40% content change of any single page. Maintenance and changes shall not exceed one (1) hour per month per every 6 web pages, the hourly Maintenance rate will be applied thereafter. No other parties shall have the right to change the web site during the maintenance period. If The Customer or an agent other than «Company» attempts updating the web pages, time to repair web pages will be assessed at the hourly rate, and is not included as part of the updating time.

2.10 Compensation. For all of «Company»’s services under this Agreement, Customer shall compensate Developers, in cash, US $350.00 on a monthly basis, or as defined in Exhibit “A”. In the event Customer fails to make any of the payments referenced by the deadline set forth in Exhibit A (Invoice), Developers have the right, but are not obligated, to pursue any or all of the following remedies:

(1) terminate the Agreement,

(2) immediately stop all works-in-progress or remove unpaid for material,

(3) bring legal action.

3.0 Consultation: «Company» will provide up to two (2) hours of consultation per every 4 web pages, the hourly Consultation rate will be applied thereafter.

4.0 Scope of Service

4.10 «Company» will:
·Edit, revise, update or create new content on existing pages based on Customer request.
·Provide consultation service for any projects that impact the website and/or projects defined in the project specified above.
·Provide disaster recovery from backup and maintain a current file library of all assets, graphics, source code and revision history for Customer's website.
·Offer advice and guidance on website management & marketing.
·Liaise with hardware engineers, hosting customer support, and other affiliate service entities.

4.20 «Company» will not:

·Create new graphics, content, code, scripts, media, or other additional elements without which are not outlined in Sect. 2.

·Liaise with billing and/or accounting of your hosting and domain service, unless directly provided by the «Company»

·Monitor operating system or Server Status unless otherwise specified and agreed upon.

·Be responsible for errors and omissions contained in website content.

·Install patches, fixes, updates to operating system or server; install additional software packages to the operating system or server; install patches, fixes or updates to additional software packages.

5.0 Additional Services: Any revisions, additions or redesign Customer wishes Company to perform which is not specified in this document shall be considered "additional" and will require separate Agreement and payment. «Company» shall advise Customer on any requested work that falls within these bounds.

6.0 Cancellation: You may cancel your Website Maintenance Agreement with us at any time, by giving us one month's written notice, provided that payment is up-to-date. A pro-rata refund will be given for any unused period of the advance payment.

7.0 Troubleshooting: In the event of a fault with your web hosting service or server, we will initiate an inquiry into the service disruption within 24 working hours of the fault or support issue being reported or observed. In the event of a hardware or software fault being found, the software or hardware maintainer will be contacted and «Company» will negotiate with them on the Customer's behalf. In the event of an operating system fault, «Company» will endeavor to solve the problem as soon as it is possible.

8.0 Entire Understanding: This contract, together with the links herein, constitutes the sole agreement between «Company» and the Customer regarding its Web Design Service. It becomes effective only when signed by both parties. Regardless of the place of signing of this agreement, the Customer agrees that for purposes of venue, this contract was entered into in «County» county, «State», «Country» and any dispute will be litigated or arbitrated in «County» county, «State», «Country». This agreement shall be governed and construed in accordance with the laws of the State of «State», «Country».

The undersigned agrees to the terms of this agreement on behalf of his or her organization or business. No responsibility will be accepted for digital or photocopied signatures.

<<Insert invoice for maintenance agreement>>

--------------------------------------------------
Hope this helps!

[edited by: rcjordan at 10:35 pm (utc) on Jan. 15, 2003]

brandi01




msg:779137
 9:06 pm on Jan 14, 2003 (gmt 0)

Syren_Song,
Thanks, I had been following that thread also, just looking for a little more on the actual contract part.

paragon,
Thanks for the example website maintenance agreement. That was very helpful. Between that and doing many "maintenance contract" searches on the web I have a pretty good start on this. Now I have to put it all together so it fits my needs.

I appreciate everyone's input very much.

Undead Hunter




msg:779138
 8:00 pm on Jan 15, 2003 (gmt 0)

Very useful thread, thanks everyone.

Brandi01, I just want to add one warning - be very careful about selling roll-over time blocks!

Lemme give you a really simple example: Let's say you get 20 clients, all who buy blocks of time in Jan. that equal 2 full days of work for you - and none of them touch that time 'til June, then all of a sudden every one of them wants the work done by the end of June.

1) How did you eat for those 5 months? How did you pay your hosting and phone bills? How much *does* your office cost to run per day - for me, I didn't think it cost anything while I worked by myself... then I started to realize what I could make out in the workforce full-time, adding on costs for phone/hosting/office equipment, etc., and I realized I was shorting myself *greatly*. Once I added a second employee it really shot up there.

2) How are you going to do 40 days work (2 full days pledged to 20 clients) in one month?

I think you need to set some limits on how long time rolls over, or otherwise hope that not everyone will need work done at once. (Still doesn't answer how to eat every month.) And while it might seem like a stretch to have everyone need work done in one month, consider - a) some kind of natural disaster or event like 9/11 where everyone needs to scramble to get information posted immediately and b) more realistically, many companies will push work at the beginning and end of financial quarters, when budgets are changed/renewed/slashed.

I think it's completely fair for clients to pay you some minimum to have you "on call" each month, even if you don't do any work for them - think about it - you *have* to stay in business and pay monthly bills, and if you're pledging to be there when they need the help, you've got to do something to reserve the time for them.

If they're NOT willing to pay to reserve time every month (which is fine), then they'll just have to take the chance you have time to do the work. But at least you haven't spend your time NOT looking for more work in the meanwhile, thinking "oh well, Company X probably wants work done this month..." (which I've done before, and it hurt financially).

And don't forget, if they are paying you monthly even if you don't do work, every month you're learning and improving your skills as well (hanging out here, for example.) So they do get some value each month, because *you* know more than you did several months ago when you signed them up. Look at it as them paying you to continue to be better at your job.

paragon




msg:779139
 8:21 pm on Jan 15, 2003 (gmt 0)

Undead_Hunter,

Good advice! WOW! Yes, cover yourself by time limit of time blocks - eg. time blocks need to be used within a quarter, if not need to be renewed.

And the option of choice should still be a retainer. And influence them to go that way by a small discount.

brandi01




msg:779140
 8:43 pm on Jan 15, 2003 (gmt 0)

Undead Hunter, thanks for the warning. It makes perfect sense in that aspect.

Actually what I had pretty much decided on was to sell Maintenance Agreements in terms of 3, 6, and 12 month incriments with each term length having different maximum hours per month.

For example, Small Client A can purchase an agreement for maintenance consisting of up to 2 hours per month for 3 months. At the end of the term they can renew.

Large Client B can purchase an agreement for maintenance consisting of up to 10 hours per month for 12 months. At the end of the term they can renew.

All agreements are payable in advance and I get paid whether or not they use the full amount of their time. I guess it is sort of like a retainer. They are paying me to be available when needed. It seems this way I can control (to an exent) how much time is reserved by clients so as to not go overboard.

I am still working on discounts, but I am leaning toward 7%, 14%, 21% respective. The other issue I'm having is whether to allow cancellation during the agreement. I've seen both sides, not sure yet. If I go with this I am thinking of imposing a $XX% administrative fee for early cancellation along with a pro rated refund of unused time. Thoughts?

Thanks again for all the great suggestions.

Undead Hunter




msg:779141
 9:18 pm on Jan 15, 2003 (gmt 0)

Cancellation fee - definitely penalize them for pulling out early. The whole point is that your resources are tied up with this company, not looking for more work.

I *didn't* have a cancellation fee on the one $4k per month contract we had, 'cause it was with a big company and I mistakenly assumed they would never pull funding on this project. Even though the parent co. was literally a Billion dollar company, after the 1st quarter the stock took a downturn, and so they started nickel-and-diming every single subsiduary company - including the one I was working for. Next thing you know, our "year long contract" finished 1/2 way through the 5th month. We were the first company on the chopping block, 'cause other companies had at least a one-month's cost cancellation fee..! We were left high and very dry, and it really hurt our company. Live and learn.

As for discounts - be careful here, too - For example, if you discount 5 projects all at 20%, well, NOW you have to find a 6th project to make the same amount of money! So what if you have the money down for the year... you can't make 20% interest on it sitting in the bank? At best you can make, what, 2.5%? At 20%, you're eradicating any profit margin you should have built into your work. (20% is as good a margin as any...) Your salary is *not* profit, its cost. 'cause you can pay your bills and buy a stereo or whatever doesn't mean you've got a viable business - that will grow, that will allow you to save money for retirement, etc. This is another mistake I made at the beginning.

Or another way to look at it - now you have to run 6 projects for the same money as you do when you run 5! Yes, some financial incentive is good to encourage longer contracts, and some corporations even have internal rules that *say* the accounting dept. has to take any discounts they can... but even 5% on a large (ie. yearly) sum of money looks good to a company.

Sorry if this comes off a little "ranty", I guess I'm ridding myself of demons and mistakes I've made over the years. :-)

brandi01




msg:779142
 9:52 pm on Jan 15, 2003 (gmt 0)

Undead_Hunter, no apol necessary for the rant. Understand completely.

Definitely a cancellation fee must be involved. Have to work on the logistics of that some more.

As for discounts, those I still have to work on. 7, 14, 21, was just something that came into my head, didn't even start to work out the numbers yet. However, they do seem a bit high. I guess I'm just so used to everyone so far paying for maintenance by the hour with no discounts. But that sure eats up a lot of time when it comes to itemized billing. I planning on dumping the comprehensive itemized bill when it comes to the contracts. That will save quite a bit of bookkeeping time. Although I still plan to keep accurate timesheets, just for that time when someone questions where their time was spent.

Thanks again for all the input.

Undead Hunter




msg:779143
 8:18 pm on Jan 23, 2003 (gmt 0)

Say, Paragon:

I've been going back to this agreement again and again, and I must admit I really love it. I do have a few specific questions about the mechanics of it that maybe you (or anyone else here) could help with:

Minor updates should not exceed more than 40% content change of any single page. Maintenance and changes shall not exceed one (1) hour per month per every 6 web pages

- Now the rate listed below says $350 a month, and refers to "Exhibit A" which seems to be the invoice that's not included in the original post. I assume it's a sliding scale, I'm just trying to figure out how that ratio works.

For example, if there were 30 pages on the site, the firm has to budget out and reserve 5 hours every month. Hence, if the firm charged $70 an hour, they'd need to have a contract like this for $350 each month to cover potential costs.

But if it was a 6 page site, they'd only have to reserve one - so the minimum monthly charge can drop down to $70?

Is that how this was determined? I'm just wondering what the basis for the 6 to 1 hr. ratio was, etc.

IF SO, chances are those hours won't be fully used each month - so is this figured out by the firm's hourly rate, a partial rate, or an inflated rate (for example, charge $90 an hour for maintenance to cover the time for "missing future work", ie. you'd have to turn down a project that would bring in more money 'cause all your hours are currently reserved?)

3.0 Consultation: «Company» will provide up to two (2) hours of consultation per every 4 web pages, the hourly Consultation rate will be applied thereafter.

---- this is where my above arguement about fails, 'cause the firm now has to reserve more than double the billing hours, or potentially take a hit per-hour if the client needs a lot of consulting.

For example: let's say there's a 24 page site: if your billing is $70 an hour, you'd need to reserve:

- 4 hours for potential editing (1 hr. per 6 pages, 24pgs / 6pgs = 4 hrs)

- 6 hours for potential consulting (1 hr. per 4 pages, 24pgs/4pgs = 6 hours)

For a total of 10 hours x $70 an hour = $700 a month.

Is that a reasonable estimate to be on-call for a 24 page site? Or is there some "hedging" happening here - bluffing, so speak, maybe the charge is for 1/2 the time, and you hope the client doesn't use it all?

FINALLY: one more question:
- what if a client doesn't want to proceed with any regular monthly maintenance fees at all? Do you then toss the project files out at the end - and charge a new set-up fee if the client comes back and wants edits? If so, how do you determine that fee?

Thanks for your thoughts, folks.

brandi01




msg:779144
 8:48 pm on Jan 27, 2003 (gmt 0)

Undead_Hunter

FINALLY: one more question:
- what if a client doesn't want to proceed with any regular monthly maintenance fees at all? Do you then toss the project files out at the end - and charge a new set-up fee if the client comes back and wants edits? If so, how do you determine that fee?

I am also interested in your first two questions, but I can answer you third question (from my perspective). What I've been doing up until now without any monthly maintenance contracts is to charge an hourly rate for updates that would "normally" be included in a maintenance contract.

In the original project contract that the client gets, I include a clause regarding expected hourly rates for ongoing maintenance of the site after it is completed (per contract), along with "what if" type scenarios for new pages, etc. that may (and usually do) come up during actual development of the site. Once I get this new maintenance contract done, the contract prices will reflect what are now current hourly rates and hourly rates will increase to persuade clients to go the contract route.

Hope that makes sense :) and helps a little.

aus_dave




msg:779145
 9:27 pm on Jan 27, 2003 (gmt 0)

Interesting thread - this was on my list to work on for this week ;).

With small business web sites, often they don't have the budget for a big maintenance contract. I'm trying to work out what is a fair monthly flat rate to charge that compensates me for the work involved but is still affordable to the client.

My gut feeling is that anything over $200 a month starts to look expensive to them yet thats only a few hours of work for us. If I get stuck with a complex job I don't want be to be limited to that amount, paticularly if it cuts into bigger and more lucrative projects. I know I could charge each complex job separately but then they start to wonder what is included.

I am trying to determine the best way to do this and there is some good info here.

Look at it as them paying you to continue to be better at your job.

Excellent point, Undead_Hunter! Now I just need to convince the clients of it ;).

I'm not sure about Silver and Gold plans etc. If you offer a lower-cost alternative most people would probably choose that one, wouldn't they? If I offer a Silver plan it will be pretty 'light', for example create new email addresses and check site is up/links are ok.

Undead Hunter




msg:779146
 12:48 am on Jan 28, 2003 (gmt 0)

Hi Brandi, maybe we can figure all this out together!

Right, so you're the client. Let's use $100 an hour as an example ( 'cause that's about $12 less than the BTOBONLINE.COM price survey.)

So you tell them that will be $300 a month set aside = 3 hrs of either work OR consulting, just to keep it simple. That way you're on-call for those 40% content updates, link checking, troubleshooting problems, answering email questions about strategy, and the like.

OR, following your logic, it you need to charge more, say $150 an hour to make changes if you AREN'T on contract ...but with at least 3 hour minimum. 'Cause if you don't put the minimum in place, then they just ask for 1.5 hours per month x $150 = $225 in changes, and you're losing money.

Is this making sense so far?

OK - so a client decides that, really they only need updates every 2 months. So they call you up, and you do the minimum changes, billing them $150 x 3 hours = $450. But guess what? It would have cost them $600 to be on contract for 2 months. D'oh?

And more importantly, how can you guarantee them that time sporadically? I know we used to be able to do that, but its pretty hard to do that nowadays as we're busier with much bigger projects. I can easily see how that will be a problem down the road.

So I guess that means that either the contract rate has to be much lower - meaning you're risking *losing money* if they do actually need the work done, or your set your non-contract work much higher...or you charge a set-up fee every time you work on the site.

I know some people recommended buying blocks of time with a 3 month minimum - but as I pointed out before, you *could* get really poached on that at the end of every 3 month period...Plus, what if they only their 1-800 # changed? Are you going to tell them they have to pay to buy 5 hours for that, and hope they'll fill out the rest?

We need to figure this out, 'cause we're aiming to do at least 20 new major sites this year - and I don't want to get to December and have to do 20 updates x 3 hours each when I've only been charging & saving time for 1 hour per client... In fact, realistically, I wonder if 3 hours would be enough?

Thanks for all your input on this, folks.

brandi01




msg:779147
 3:56 pm on Jan 28, 2003 (gmt 0)

Hmmm...

I see the point behind what you are saying, Undead_Hunter.

Let's clarify one thing on my end. I wasn't considering mandating any hourly minimum charge. I was intending to keep it as it is now (client calls and says they need this, this, and this changed / updated). Changes get made, client gets billed for time spent on changes, whether 30 minutes or 5 hours, or whatever (minimum half hour charge applies to all maintenance).

Most of our clients are small businesses with ecomm sites of about 100 - 500 products. Most are not high maintenance at all after the first few months. As a matter of fact, most only request an actual hour or so of changes during most months. The bulk of updates are adding new products, which I don't consider maintenance (should I?). Clients are given a set price per product with the original contract stating each new product added to the store costs $X.XX (assuming all products are similar in regard to options - number of sizes, colors, etc.)

So, the real issue here, from my standpoint, is giving the client the option to purchase X number of hours of maintenance per month at a fixed price, which would be cheaper in the long run for them than hourly billing (and easier on a bookkeeping basis from our standpoint as hourly billing involves detailed statements - at least that's how we do it, contracted maintenance would not get the client the detailed statement, saving paperwork time here).

I guess my thinking is this, would a client who only asks for minimal changes during any given month want to commit to spending X number of dollars for a set period of time, whether or not they use that time? And if they don't use the time, they spent the money for what (from the clients perspective)?

I guess for larger, more maintenance heavy clients it would make sense, but for smaller clients, I'm still not sure. That's why for the last 5 years I've been doing all maintenance on an hourly basis. I still plan to give the contracts a shot, but I don't know if there will be any takers.

As always, all input very much appreciated.

<edited for spelling>

Global Options:
 top home search open messages active posts  
 

Home / Forums Index / WebmasterWorld / Professional Webmaster Business Issues
rss feed

All trademarks and copyrights held by respective owners. Member comments are owned by the poster.
Terms of Service ¦ Privacy Policy ¦ Report Problem ¦ About
© Webmaster World 1996-2014 all rights reserved