Ok, last post we discussed the basics of project pricing vs. hourly pricing when it comes to service providers. So let’s go a little further this post and talk about Project Pricing.
Project Pricing is when you say something on your website like “All projects are unique, so contact us, tell us what you need, and we’ll give you a price for your entire project”
In fact, since I went back and forth on this issue for years, I likely said that exact phrase on my website at some point over the past 15 years.
Pricing by the Project is fairly popular with writers, web designers, and other SME service providers (I guess I should point out SME = Small / Medium Enterprise). Especially when these businesses are first starting out.
So what are the reasons to utilize Project Pricing?
1 – You don’t need to list prices on your website
Although it’s usually not admitted, I suspect this is far and away the main reason why people do this. They don’t want to list a “rate” on their website, especially when they are starting out. See, listing rates cuts down on contacts – sometimes way down. I’ve seen contacts from my website go down by as much as 80% after listing prices.
2 – You can technically earn more if you are fast
Yea, maybe. If you quote a project price of $1,000, and you finish it in a day, you earned a grand for that day. Pretty good. This is definitely an upside to project pricing, and can work well in certain industries – typically highly technical industries where the customer has no clue how much work is really involved. The one guy left who can fix the Earthworm Cornelius bug in an older but highly specialized piece of software can charge whatever he wants.
3 – Your customer likes it better, because they know what they are going to pay
I see this reason listed a lot in other articles. Maybe it’s true on huge projects where the bill exceeds five or six figures, but for us writers and artists? No way – customers actually don’t like the ambiguity of it if the end result is anything less than 100% clear (which is usually the case with most creative type work).
I will make an exception for a service like a photographer, or someone who offers packages – “basic wedding with album and downloadable content = $2500” etc. Or, even in a creative enterprise like a graphic artist, offering “three logos for $100” could be ok as long as the client understands no revisions, etc. In other words, if you offer a firm package and control the process and the final product, it can be ok.
4 – Lastly, let’s talk piecework, like $50 a page, or .05 a word or $100 a logo or similar…
A lot of people do this type of thing. To me, that’s amateur hour. First of all, you always get the asshole who says “ok, if it’s $50 a page, please use a small font”. Secondly, only a rank amateur would ever put a firm price on the commodity. So, if it’s .05 a word, that means a 300 word article on bowling and a 300 word article on the nuances of infusing copper into fabric on a molecular level are the same price? Please…
As you can tell, I’m not really a big fan of project pricing anymore. There are also some significant downsides. Here they are:
Downside #1 – You waste a ton of time
Like I mentioned, not putting pricing on your site will almost always result in more contacts. And many of these contacts – those who would have been driven away by your true rates – are really tough to deal with. It was not unusual for me to exchange several e-mails with someone before finding out he had a $200 budget for my $1,000 quoted project.
Downside #2 – Feature Creep, constant e-mails, changes, etc will kill you
Unless you are firm and stick to your guns (and let’s face it, if you’re afraid to put pricing on your site, you’re probably not the most confident / strong person out there), you will end up hating many of your projects. Because many clients expect a lot, and will communicate excessively, propose changes, etc.
Downside #3 – You will miss the best clients
Yes, you’ll get increased e-mail from the lower end, but the higher end – the type of company with 79 stores and no time to dicker around and play guessing games… you’re probably not going to get contacted by them. They want to hire a confident dude (or dudette) who knows what they are worth.
Ok, I think that’s enough on the topic – you get the gist by now. While there are unique situations (and this advice of mine wanes as business size increases), I would say that if you can, proudly tell people your rate.