17 replies to this topic

[Shane]

No, discussing it among your peers isn't the lazy way to do it, it's the natural way. And I much prefer that to someone trying to ascertain my prices under the guise of a getting a quote. That's not only irritating, but unethical. It wastes both my time and money.

And pricing your service according to the market is anything but price fixing. It's just sensible business. The characteristics of price fixing are much more than just a discussion of rates.

(And I'm not calling into question what Jill decides to allow on her forum. It's her forum. I have no problem with that.)

[projectphp]

I still say it is lazy. Asking peers personally and privately is different to asking the whole world via a forum, many of whom one won't know. An anonymous group getting together to discuss prices is very differnt to a few people discussing what they charge.

And pricing your service according to the market is anything but price fixing

But discussing pricing openly is price fixing, unfortunately. I don't think anything else you said was untrue. Asking is the best way to do it, it is the best was to get where you go, and it is much better than a fake quote. But it is also price fixing, at least the sort protection agencies don't like. Besides, to a large degree price should be independent of competitors' pricing, as it should be based upon your expected costs plus a margin, and everyone's costs are different.

[rogerbauer]

I won't discuss exact amounts, but I generally try to secure a six month initial contract. I base the total contract value on the number of hours I anticipate working each month and multiply a fair rate for my time. At the end of it, I have a total for the contract that can be tiered however the customer wishes to see/pay the charges. If they want a balloon effect where they pay more at the beginning and step downward from that, I can easily do that. If they want to pay less up front to see how things go, that can be handled too. The hourly rate never changes, but the hours applied each month can change accordingly. Or if they want equal payments each month, that can easily be arranged. Some money has to be paid as we progress in good faith.

Or another way to do it is figure out what the customer has budgeted (some will tell you straight up if you've built some mutual trust) and work back from that. If you charge $X per hour, you can easily figure up how many hours you'll commit to in a given contract. That's how my most recent contract came about--the customer wanted to keep me but didn't have the funds to afford the proposed full contract. No problem--instead of (say) 20 hours/month, he's getting ten. He's happy and I'm happy so we both win.

I think that's a key takeaway--communicate openly with your customer, and you can usually find a middle ground that will provide a win-win outcome.