The Bid Process

do you charge for the time?

[lorax]

I often get asked by potential customers to chat about doing website work for them. I often spend an hour or two with them and then prep a bid for doing the work. I should add that I live in a mostly rural state so many of my customers are just now getting around to realizing the Internet and WWW are actually not a fad and can be used for business. That being said, these folks are used to doing things on the cheap (not all but many of them at least). So more often than not, once they get my quote, I never hear from them again or I find out they were hoping for something much less expensive.

I have tried the approach of asking them what their budget is and have explained that it really is up to them since we can develop pretty much anything they want - limited only by their funds. Which, of course, scares the heck out of them despite my best efforts at guessing what their budget might be.

So, lately I've been thinking about charging a flat fee for even meeting with them because I spend a few hours with them and then go back and spend another hour or so working out the details and making sure I understand all of the pieces of the job. So 4 hours are lost on small to medium sized jobs! For me that's $300. Now I don't want to charge them full rate but I'd like to at least weed out the ones that aren't really serious by charging a nominal fee to sit down and discuss their project - say $75.

I'd like to know how you handle the prebid and bid process and if you absorb the costs or charge for them.

[rogerd]

I'd suggest a couple of possibilities. First, the initial meeting or phone conversation should almost certainly be free. This is your opportunity to establish your credentials, etc.

Preparing a bid is a bit more tricky. If it is a fairly straightforward quote that you can mostly take from past work, I'd do it for free. If preparing the bid involves some hours of analysis of their situation, you have to decide whether your time is worth the risk - if you charge, you recover your time but the client may well say "no thanks, don't bother" before you get that far.

My favorite compromise is to tell the client that to prepare a detailed plan of action and proposal it will take __ hours, billable at $__ per hour. We will credit that in full to the cost of the project if he accepts. If he decides to use someone else or do nothing, he pays for the time.

I run into that in network bids quite frequently, where a detailed site analysis may be needed just to determine what to quote.

All in all, the approach you take depends on your competition - if they all prepare detailed, custom proposals for free, you will be hard pressed to charge for yours.

[lorax]

My favorite compromise is to tell the client that to prepare a detailed plan of action and proposal it will take __ hours, billable at $__ per hour.

Now that sounds like a good solution. I prefer to keep the initial consultation free it's just I need to recoup some of the labor costs for going the next step so your solution, rogerd, fits the bill quite nicely. Danke.

[Robert Charlton]

>>My favorite compromise is to tell the client that to prepare a detailed plan of action and proposal it will take __ hours, billable at $__ per hour.<<

This is an area that's been plaguing me for quite a while. I've found that to really do an analysis on a site, look at the range of targets and their competitiveness and what it will take to rank, discover all the mirror sites and redirects and all that, to get an idea how long it will take, is already a big chunk of work.

In the current economic climate, clients also don't like hourly contracts. They want fixed fee bids... so it's harder yet to estimate the job.

>>So 4 hours are lost on small to medium sized jobs! For me that's $300.<<

Before the bubble burst, I used to charge, in fact, for meetings after an initial phone chat as a 4-hour-minimum consultation.

Now, people generally ask me for a proposal, and if I build a "discovery phase" or "needs analysis" into the proposal so I can charge for this analysis time, most prospects won't go for it. They don't want to pay to find out that something is going to cost them more than they want to pay, and they never want to tell me what their budget is.

Also, there are a lot of different personality types. Some people legitimately like to meet to get an idea who you are. But some people just like to pick your brain. Playing this game eats up a lot of my time and energy. I'd almost be willing to give some people an hour or so free just so I didn't have to play the elaborate games they like to go through.

On the other hand, some companies have legitimate concerns, particularly about ROI, which are really hard to answer... and sometimes they do come through after an elaborate educational process.

[Mardi_Gras]

So, lately I've been thinking about charging a flat fee

In theory - I agree 1,000%. In practice, it is hard to implement. If you try to implement this, I would be anxious to hear how you make out.

[lorax]

I've been toying with creating a checklist as of late. Completely subjective of course. Something along the lines of a points system based on what I can learn from the prospective client. For example:

Budget was divulged = 1pt
Articulate about their needs = 1pt
Well organized = 1pt
Has no clue = -10pts
etc...

At 10pts and above, they know what they're doing and my bid is most likely one of several. No charge for bid development. 5 to 10pts is the crossover range. If they're well organized, no charge, if they have no clue, I charge. Anything less than 5pts, they get charged for the bid preparation time.

[aspdaddy]

lorax, why not make it into a grid and give each term a weighting 1-10 (importance) and also a score based on the clients response, say 1-10. then add up the products..
A good little busines tool :)

[lorax]

aspdaddy,
That's where I was headed. Something I could bring along with me to that initial meeting because as much as they're eyeing me - I'm eyeing them - or at least I should be.