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  1. #1
    Senior Member RDesignista's Avatar
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    Hi everyone,

    I need to know how to maximize contract price. This sounds strange because it was just a month ago in this forum where I posted "How to cold email?" when I was struggling for work. At that time, I even offered a non-profit guy to do his website for $325 because I wanted work (he flaked). Well, the work is pouring in now. I've gotten 4 contracts since then, another to be signed soon, and 2 leads. I'm actually a little too busy.

    The reason I need to maximize contract price, or push the price higher is that people are agreeing too quickly to the price. Also it's because I'm getting a lot of business clients, rather than individual clients. I mean, I'm really giving the quotes on the high end and they just say "okay." And I'm hearing so many horror stories about independent contractors from my clients that I feel like just being professional and trustworthy (with skill of course) deserves better compensation.

    So please, share with me ideas on how you get the right price for your services. Or if you have any clauses that help out in the contract process, that'd be great too.

    -R

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  3. #2
    Senior Member Webzarus's Avatar
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    Dude, welcome to the business world.

    Pricing is always gonna be a trick and there are a couple of things that always come into play when pricing a job. So I'm not gonna give you a silver bullet answer, as there is none.

    One of the things you have to consider ( you're experiencing ), too much work... Do you quote the job so outrageous, you scare them off ? No. Because believe it or not, things will slow down, and if they remember you as the guy who is god awful expensive, you'll NEVER hear from them again. So even when pricing a job you don't want, you should keep it reasonable.

    Is this a potential client that you can get a lot of work from ? I have one client that has 60+ properties and at one time, a local designer talked him into dropping all bit three sites and consolidating them into one big site that references them all... Problem was, the designer really didn't understand how search engines work... And pretty much trashed a web reputation this guy had taken years to build.

    About 4 years ago ( luckily the guy held onto all the domains ), we started rebuilding what he had, been a long road, but he now sees the bad decision he was encouraged to do, trusting in advice from someone he probably shouldn't.

    Considering a price for someone like that is tricky, cause you never know, until you're in a business relationship, just how they are gonna do things, and if you have the potential to get all the business. I came into this from a consulting end, but that's another story.

    Years ago, when confronted with a similar situation, I found a couple of local designers that would take sub work, had them sign an NDA ( non disclosure agreement ), and a letter of Non Compete. ( you should have a real lawyer draft those for you ), I would provide them wireframes and a graphic depiction, they would create the site and all associated code. For each project, I had to maintain 2 cotracts and pretty much turned into more of a project manager while still working on projects that I wanted to.

    In pricing and discussions with the client, I always made it clear that because I was so swamped, I was sub ing out the coding part, managing everything....etc... Never once did I make the claim to a client that I was doing all the work.

    I actually provided a set of standards to the subs I used ( coding standards, CSS style standards, etc ), that way, if something were to come up... As long as they coded to my standards, I wouldn't have problems fixing or modifying their code.

    All my work is by referrals now, so this is no longer an issue. Sure I get offers all the time, but normally my typical rates that I quote them are much higher than the local base, I never hear from them again. Th avg for the area I live in is currently $40-60 an hour. I don't do 5 turnkey websites, each and everyone is different, and depending on customer participation, my prices vary wildly.

    One client last year, told me flat out, he had dropped his YP advertising budget from 16k to 2k, so we had 14k to work with on getting his site up and running ... OK.

    So always remember to figure in your pricing based on their "cost savings" from other advertising medium. And don't forget to mention that in your discussions with them... For those that are serious, that is a relevant part of the conversation, for those that see this as just another cost, perhaps, gracefully backing away from the project, saying you're just too overloaded with work to provide them the level of service they deserve.

    Then if you know of any local designers that actually do too work, you can refer them.

  4. #3
    Member DigitalYak's Avatar
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    I totally agree with the above comments, it's a very fine line when quoting for business. It may seem a little rude during a first conversation with a potential client but I always ask if they have a budget, for both the design project and overall marketing. A lot will not tell me but some do and this gives me an Idea of what they are looking to spend of the website design.

    Secondly, think about the time these projects will take, add up all the design, coding and admin hours, then add 25% and see how long it will take you. this is the best way of making sure you a, have enough time to work on the project properly and b, charge the right amount for the project.

    Hope this helps.

  5. #4
    Senior Member Webzarus's Avatar
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    Besides general concept and ideas, whether a client has a budget in mind is absolutely a question to ask. If they are offended or get defensive over a simple business question that is relevant to the conversation, then perhaps they are not a client that I would want to do business with.

    I don't ask outright what they have set aside of a budget, just if they have a budget in mind. Usually the response and of answer defines whether the project it worth pursuing.

  6. #5
    Senior Member RDesignista's Avatar
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    Good idea. I also think "when do you need this by?" is a great question to couple with "did you set aside a budget for your website design?"

    However, no clients really told me their budgets so far. They just reply, "I don't know... how much would you charge." Then I say, "what exactly do you need?" I've started telling my clients lately that I can either A: have them tell me what they want and I'll quote them or B: they tell me what they want to spend and I'll tell them what I can give them. I think it's good because I don't want to scare them off, and if they're a decent sized company but only wants to spend $500, I can still help them.

    I guess the main thing is to always ask those questions and maybe use it in a graceful way so that they don't feel defensive or feel like I'll highball them on price if they have a large budget.

    Still, confusing as heck. I'm going to have to sit down and think about my approach when I finish all these contracts.

    -R

  7. #6
    Senior Member Webzarus's Avatar
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    Timing is always a factor in my pricing as well, if I'm already busy with a project and they are insistent in getting their project done, the quote is reflective of that as well.

    My quotes always include a timeline so I can schedule around ongoing projects and clients. If a client goes out of their way to work with me on providing graphics, content, ect ... I usually give them some break on the price. I've had many project drag out way past contract date because the client wasn't working with me, ( all quotes have a section on who's responsible for providing what and a timeline for it ), my hourly rates kick in after the contract completion date.

    Working with some clients is like disciplining a child. You have to pay out the whole situation and the consequences of them not participating. I've not had to deal with clients like that in a long time, but when that was the bulk of my clients, that section always covered me when projects took way to long because of them.

    The site content, etc... Always goes on my test server for approvals, they never have access to the finished files, until the final "signed approval", and check or fund transfer in hand.

  8. #7
    Senior Member RDesignista's Avatar
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    Webzarus,

    Very good point. Instead of asking for more money, making sure that the client provides the content in proper fashion is just as good. Less time spent resizing a client's 250k PNG thumbnail to a 15k JPG means less time spent on the project overall, and more time available to work on other projects.

    It's really hard because my clients seem so clueless about images. I just did an emergency job over the weekend and I was going to finish on time... but then my client hands me their images... in a Microsoft Word document :banghead:.

    Essentially, a client will either be glad to save money by doing more work on their own or they will be willing to pay a premium for my uber photo editing skills. That sounds like a great way to make a contract work.

  9. #8
    Senior Member Webzarus's Avatar
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    I took on a client recently that is completely remote, they are in a different part of the world.

    They were sending me huge images and struggling with it.

    After I explained the process of taking their originals, dropping the DPI to 72 instead of 300-600... I've created numerous tutorials over the years for basic task like this.

    The point is, sometimes, we as business people benefit from educating our clients, mainly for our benefit, but they will then ( most of the time ), feel more beneficial to the project. They feel less "computer illiterate", I get what I need in a more practical format. Everyone wins.

    On the exact extreme side of things, I manage the site, email, network management, etc. for a local client, during site development, I'd sent them word documents the the site header and footer embedded, and the content area formatted so all they would need to do is type their content in...

    What do I get form them ? They printed, had wrote their content, scanned it and sent it back to me as PDF .... Jeez... You can only do so much, but they are paying a monthly retainer and hourly rates, and have referred over a dozen clients over the years... So handholding is sometimes required.

  10. #9
    Senior Member RDesignista's Avatar
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    Quote Originally Posted by Webzarus, post: 247932
    I took on a client recently that is completely remote, they are in a different part of the world.

    They were sending me huge images and struggling with it.

    After I explained the process of taking their originals, dropping the DPI to 72 instead of 300-600... I've created numerous tutorials over the years for basic task like this.

    The point is, sometimes, we as business people benefit from educating our clients, mainly for our benefit, but they will then ( most of the time ), feel more beneficial to the project. They feel less "computer illiterate", I get what I need in a more practical format. Everyone wins.

    On the exact extreme side of things, I manage the site, email, network management, etc. for a local client, during site development, I'd sent them word documents the the site header and footer embedded, and the content area formatted so all they would need to do is type their content in...

    What do I get form them ? They printed, had wrote their content, scanned it and sent it back to me as PDF .... Jeez... You can only do so much, but they are paying a monthly retainer and hourly rates, and have referred over a dozen clients over the years... So handholding is sometimes required.
    Yes, I totally agree with you. I complete believe in WIN-WIN situations.

    Having instructional videos for clients sounds like a good idea. I feel I teach things very effectively. And I feel like my clients are bit a challenged when it comes to computer literacy (speaking of which... I just got another Microsoft Word document full of pics from a client ... ). So investing some time into making a video would pay in the long run. And maybe someone might even hire me to lecture about this stuff, who knows.

  11. #10
    Senior Member Webzarus's Avatar
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    I've never done a video, its usually just a 1 page document... Step by step, small pictures if needed.

    When I provide anything more than basic instructions, they are either:

    1. Ignored because "it's too complicated"
    2. Not followed as they think they know better until something really bad goes wrong and the they say "well, you told me to do it that way".
    3. They are just out right intimidated by anything technical.

    On the other extreme, you get those that are offended by simple instructions, yet they still can't or won't do simple task ( see above ).

    The key is, it the person teachable ? And do they want to learn ? If both are yes, it's a good thing, if either one is No, then you pretty much have to deal with the situation.

    Dumping pictures in word docs sounds like they have potential, but if you can't show them the value of doing it differently.... The bright side is, they can do that instead of trying to send you a gazillion 14MP Images, and choking your mail server down.


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