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Can you defend price on application

For web development...

     
9:23 am on May 21, 2007 (gmt 0)

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I'm wiping my personal business slate clean and launching a new web development company. One potential area for saving time which occured to me was to fly in the face of all I've ever known and give up-front costs, publically visible.

I've only ever seen up-front costs where the design is of the form '5 pages with one graphic plus domain name' and the pages are entirely static.

So - is there any good reason for the established model of 'enquiry'->'brief'->'quotation'->...?

Can anyone defend the quotation / price-on-application model for SMC-targetted web-development?

12:27 pm on May 21, 2007 (gmt 0)

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vincevinvcevince

In order for that to work, you would have to have an ironclad proposal. Otherwise you will be a victim of 'scope creep' and die pennyless.. :)

I almost always bill time and materials althought the sites I do are smaller companies mostly (gas stations, real estate appraisers etc).. I've found that on 'fixed price' contracts you often go to the client and end up sitting there twiddling your thumbs while they are on the phone or with employees/customers. When you make it clear that the clock is ticking, they suddenly find themselves able to postpone the phone call for an hour.

For your model to work, I would think you would need to provide the hosting to minimize complications..

good luck!

cg

2:40 am on May 22, 2007 (gmt 0)

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cmendla...

Good opening blow to upfront pricing! Scope creep sounds like it could be a fairly major problem. In light of your comments perhaps cutting out face-to-face contact (switch to phone, email and CRM systems), and specifying exactly what you get (i.e. three cycles of design, four colour-schemes, interactive features only as listed in the description) would get around that. Do you agree?

10:27 am on May 22, 2007 (gmt 0)

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VinceVinceVince

I agree that might work. It might not work as well for someone like me...

I've found the experience with proposals similar to my being an adjunct professor. I've been doing that since 1989. Every year I have to revise my syllabus somewhat because students are always finding ways to milk the system. Water seeks its own level.

I guess the trick is to do one or two and then revise. If you put up a website, consider putting the classic "terms and conditions are subject to change" disclaimer.

6:22 pm on May 22, 2007 (gmt 0)

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I think the quote/proposal approach is a good way to get the business. First understand them then tailor the proposal to get the business.

Maybe qualify your leads instead to weed out the time wasters.

Scope creep is good, it lets the customer get what they want and makes you more money :) Its just needs to be managed. Dont expect SMC's (is that the same as SME's?) to be experts in defining requirements.

5:33 am on May 23, 2007 (gmt 0)

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aspdaddy.. don't you find that quote/proposal discourages potential customers? I was always bought up in the certain knowledge that "if you have to ask the price then it's too expensive"... so to me it's a logical extension that not having a price on display will put off many people.

I like your point about scope-creep being a moneyspinner! Excellent. I wonder if I could allow scope-creep (paid extras, of course) with the upfront price system...

3:34 am on May 24, 2007 (gmt 0)

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I have attended a presentation from a web dev company who would bill at major milestones, one being the storyboard meeting where they would show artist's impressions of major pages. Their contract was clear that any change after that point would cost (some formula including an hourly rate).
4:19 am on May 24, 2007 (gmt 0)

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Part of the 'pricing' problem is that a site can be any size for anybody.
The lower end of the market is often both undecided about what they want/need and cheap. If this is a market you are interested in you need to set up very clear guidelines with simple tight contracts (with change order clause) and do nothing not paid for first. You will 'lose' many clients by virtue of being 'unreasonable' and 'unfeeling' but minimise defaulted accounts.

Personally I found the aggrevation far outweighed recompense so I moved to requiring an RFQ (Request For Quotation). If the client provided one it formed the basis for discussion, pricing, and contract. If not, then I would offer to create one - for a fee. The client could then request pricing from myself and any others s/he chose. Even not getting the job could be profitable. Naturally the lower end of the market tended to leave me alone.

In the end it comes down to what you feel comfortable with. But please always work only with a signed contract (with change order clause) and never work beyond an unpaid billing. Scope creep and late or non-payment are a web developers greatest concerns.

3:48 pm on May 24, 2007 (gmt 0)

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I agree with the above, but wouldnt charge for a quote. You have to invest *something* in business development :). The low cost website market is full of timewasters though. The trick is to identify the buyers budget and expectations and exploit it.
 

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