Forum Moderators: LifeinAsia
I've been reading through the business section of this forum very much lately, and I must say its been a great help. I've seen atleast 5 posts related to "maintenance contracts", and fee structure that can be implemented in various situations.
One question I do have though is what is the BEST pricing structure to suggest to a client (and making sure they don't run away because the price is too high).
I will be dealing with a law firm, and they would like a web site maintenance contract. I figured they can pay a minimum of 500 a month (which covers 5 hours of work), if they go over 5 hours, I charge them on an hourly basis of 100/hour.
The one thing they will ask me is - "what if we don't use up the maintenance hours for march? - we don't want to pay for nothing".
Basically my main question is - I'm struggling between two things - making sure that I make ATLEAST a CERTAIN amount of money every month, regardless of updates or not, but at the same time, I have to tell the client, the price structure is worth it for them.
From your experience, whats worth it (in this perticular situation). Any proposed solutions would be EXTREMELY appreciated! And your expertise is wonderful.
Thanks in advance.
You might want to consider an annualised fee using some form of average formula over the year. It's difficult to be specific without getting more detail.
The important caveat is to ensure they know what a great service they'll be getting. You need to ensure you have sold them your skills and service properly.
Without entering into a treatise on sales techniques, I would suggest you treat every question as an opportunity to improve your position.
Example
Q1. But what if we don't use up all our hours.
A1. So Mr Lawyer if we could come to some agreement on the retainer fee your happy to go ahead with this?
A classic close!
You might also want to look at the long term implications maybe settling for less retainer in exchange for a longer contract.If you are able to tie them into your way of doing things so much the better, make yourself indispensible.
Finally of course there is always quid pro quo. YOu never know when you might need a lawyer and maybe if they agreed to some pro bono work for you you could reduce the fee.
If you have any speicfics feel free to sticky me.
Budding webmaster, rather more experienced sales manager!
Basically, I know where they're sitting. We've had an intial consultation regarding the "actual web design work" I'll be doing for them.
And I think they're leaning my way (won't be sure until the meeting this coming monday).
They're definately interested in having me do the updates for them, they don't want to do it themselves, because they have no time for it.
If I tell them I'll charge them 500 a month as a minimum, and they said "what if we don't use all our hours", I can tell them - "but your paying for a basic level of service you're guaranteed every month". Is that the right idea?
Is 500 bucks a month minimum for 5 hours of service, a reasonable price to throw at these guys?
500 a month sounds a little pricey to me if the client isn't getting anything for it ... even for a law firm! A couple of comments that might help ...
I appreciate the warm welcome. This is a great place, and the people seem nice enough, so I thought I would give a shot at "asking" too :D
I like your idea of moving over unused hours, but the problem with that is I don't want them to use nothing for three months, and give me a 20 hour work month the 5th month...
Thats my only concern.
I don't want them to use nothing for three months, and give me a 20 hour work month the 5th month
Why not? That's what they are paying for ... and in reality, this is the way that this kind of contract works in my experience (I have several clients that are serviced in this way).
But should there be SOME kind of a limit? Where the hours expire after so many months or so? Or is that not a good idea?
Maybe give them 6 hours at $80 - $480 a month. Additional hours are $110. I'd aim for at least a one-year deal.
Perhaps they get rollover on up to two hours a month. If you want the 4-6 hours used up on a monthly basis, rather than building up, it would be your job to keep them engaged in the project and in ongoing development above and beyond maintenance (as storevalley suggests).
I think they would like it if I provide them with a discount on the retainer fee they pay every month. It will entice them to give me the monthly fee every month. They know they're getting something extra for the "minimum charge" they're obliged to pay every month.
Thanks for all your help. You guys are great.
For instance, if the client is on retainer, then any changes they provide to you will be made within 48 hours. If they are just an hourly basis, they may drop back in the queue behind other clients. I'd be careful *how* you phrase this, but basically, you want to demonstrate the priority they would get as a monthly client of yours.
