How to handle "cheap" clients

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matthijs
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How to handle "cheap" clients

Post by matthijs »

As most of you probably know, no client is the same. Webdesign and development is a wide and sometimes complicated field of work. Clients are often not technical and don't know what it takes to build a website or web application.

They should not have to know, either. We are the experts on our field, they are on theirs.

However, it does make things difficult sometimes. You know, someone approaches me and in our first meeting we talk about the online community website he wants to build. The website should have all kinds of interactive functionality, a complete user system in which people can log in, have an account, do and manage stuff, get to see customized pages, etc etc.

At some point I ask what his budget is. He doesn't know. (alarm bell no1). Well, ok I can imagine that, because it's not his field of work so he shouldn't need to know how much something like that costs. Then, during the rest of the conversation he keeps mentioning that the site should be really "simple" (again, alarm bell). What he means is that it looks simple.

Then, when you tell him building something like this costs like 10-20.000 he falls of his chair. Of course you don't get the job and you just waisted an hour or two of your precious time.

One thing I always do nowadays is ask for a budget in the first meeting.

So what is your way of dealing with situations like this?
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shiznatix
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Re: How to handle "cheap" clients

Post by shiznatix »

I carry a gun, it seams to be affective.
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Re: How to handle "cheap" clients

Post by matthijs »

Yes, but what if your client has a bigger gun? :roll:

Other ideas are still welcome :wink:
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seodevhead
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Re: How to handle "cheap" clients

Post by seodevhead »

You know... the best way to deal with customers like this is to actually show them the code. They won't understand what they are looking at, but you need to show them how much code actually goes into what you develop. I have friends who don't know a lick about development think that I make my web apps using some sort of "FrontPage" type program that basically lets me WYSIWYG everything in a matter of minutes.

You need to explain to them that there are no WYSIWYG software of the sorts, and no "templates" that are one-size fits all for everyone. Scroll through a 5,000 line PHP file and say, "this is just for the contact page" (better to have procedural code in one big file for that one).

Stuff like that helps me... and of course, never, EVER demean them... but rather, you gotta "enlighten" them. :)
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John Cartwright
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Re: How to handle "cheap" clients

Post by John Cartwright »

I think it's important that the client knows how much your worth upfront. I've had the exact same experience that you've had so many times that I rarely deal with freelancing anymore.

What you think is a prospect usually turned out to be actually someone just 'curious' as to what it would cost, or simply didn't understand they could afford not afford me. Very frustrating when you think your getting a $20,000 contract and to your end you find out they only had $100 budget.

My solutions:
1. Stop freelancing ;)
2. Wear "Min project, $5,000, or $50/h" sticker on your head
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Re: How to handle "cheap" clients

Post by matthijs »

Seodevhead: you are absolutely right that I have to try to explain it to them. And even though I sometimes might think "you silly, what a waste of time", I'll always treat each and every client with respect. And I'll try to explain how much work something is, and that they will get good value for the work.

Jcart: excellent solutions. I like the $50/h sticker on my head. I'll try it next time when I meet a prospective client :)

The thing is, you always have to invest some time, at least, before you find out what kind of client and budget you're dealing with. With most clients I have had, I first build up some trust by talking about their project and what I can do for them etc. I do ask for the budget fairly quick nowadays (most often in the first meeting or conversation), but I don't think it's nice to let that be the first thing you say in a conversation.

I remember having seen a website from a web design firm on which the contact form had a select menu for budget. Choices: 10.000, 20.000, 50.000 or something ..
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RobertGonzalez
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Re: How to handle "cheap" clients

Post by RobertGonzalez »

One thing I like to do is have posted rates. I usually charge between $90 and $125 per hour for my work. This seems a little high, but if you sell your strong suits and your speed, it makes a lot of fiscal sense later on down the road. Someone who charges $40 per hour but takes four times as long to produce something half as secure, half as efficient and half as portable/flexible/usable/scalable is actually going to cost more in the long run and take longer to achieve the desired affect the client is shooting for.

On larger applications or applications that I feel merit it, I tend to go with a straight $100 per hour. That means when I say it will take 150 hours of my development time I am saying that my quote is $15,000.

I also give very detailed proposals with expected time frames for each part of the project development life cycle. I also give as detailed as possible architecture plans for the application file system structure, the framework structure, the UI structure and the model (data) structure. Generally speaking when requesting a quote from me your are going to get about a 10 page document outlining every step of the development process, including alternatives, along with a prices quote that almost always be over $5,000.
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Bill H
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Re: How to handle "cheap" clients

Post by Bill H »

Being officially "retired," I only have one client left, so take this for what it's worth. I have them trained by now.

I don't price anything by the hour, gave that up quite a few years ago. I define the result and give them a turnkey price for the product. Yes, I get burned once in a while, but I do things in less time than my forecast just as often, so it all evens out. If one prices by the hour, then the quibbling starts about how many hours the job is taking. If one prices by the job there can be quibbling about what was included in the original and what constitutes "add ons," so carefully defining the job is important. It worked for me for quite a lot of years and I don't recall leaving any clients on bad terms.

The one client I have now is always braced when we get to pricing. Says, "All of the things I think are going to be big turn out to be minor, and all of the things I think will be minor changes turn out to be big ones." Yup, that's why I'm the programmer.

Two cents worth, but I didn't have anything better to do this morning.
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Re: How to handle "cheap" clients

Post by matthijs »

Everah: certainly true that selling yourself on quality and result is better. About your proposals: do you charge for those as well? I mean, it does cost quite some time to produce one as detailed as you described. And with larger web applications, getting the specifications neatly on paper is half the work. Ok, not literally half the work, but you get my point.

In the example I mentioned, the client had only a very general idea of the web app. I would certainly have charged per hour if I had developed the specifications for/with him.

Bill H: I think that whether or not you give the hours, the client looks at the end price. So there's a point in just giving a final estimate. However, aren't you estimating that price based on amount of work for yourself?
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RobertGonzalez
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Re: How to handle "cheap" clients

Post by RobertGonzalez »

No, I don't charge for the proposal directly. I do include the time spent on that in a preliminary round of time developing though, so it does pay back.

I generally do not go to those lengths for a project that I feel with move quickly or is smaller in scale. For larger projects I get more involved because both the client and i have a lot more at stake.
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Bill H
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Re: How to handle "cheap" clients

Post by Bill H »

However, aren't you estimating that price based on amount of work for yourself?
Sure I am. I rather thought that was implied in my "I get burned once in a while, but I do things in less time than my forecast just as often..."

The point is if I quote the job at $100/hour and that I think it will take 50 hours, what happens when 50 hours has been expended and the job is not yet complete? I'll tell you what happens. The client starts complaining to the effect of, "You are dragging it out to make more money." The fact that he changed the parameters 27 times during that 50 hours is not going to enter his mind, and you are not going to put it into his mind with any notable degree of success.

So I just tell him I'll do the job for $5000 total. If it takes me 55 hours then I made $90.90/hr instead of $100/hr. That's better than having a client steamed because he paid $5500 when he budgeted for $5000, badmouthing me to his friends, and not coming back to me when he has another programming job.

On the other hand if I do the job in 45 hours I still get $5000.
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RobertGonzalez
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Re: How to handle "cheap" clients

Post by RobertGonzalez »

For BillH, another I request from my clients is a technical specification document (I also offer a service to draw those up, for a nominal fee). This allows me to code to the spec. If things change, I offer new quotes for the changing aspects. Clients that continually get charged for adding things after the start of development tend to not want to add stuff anymore.
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Re: How to handle "cheap" clients

Post by matthijs »

Everah wrote:For BillH, another I request from my clients is a technical specification document (I also offer a service to draw those up, for a nominal fee). This allows me to code to the spec.
This is what I meant. If there is no spec document from the client, you one would charge for the work to make one/ help with making it. Seems logical.
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Bill H
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Re: How to handle "cheap" clients

Post by Bill H »

I request from my clients is a technical specification document .
I put it in my quotation. "I am proposing to provide programming which will include the following..."
(I also offer a service to draw those up, for a nominal fee)
I found in my day that when I charged "nominal fees" for things like this that the trust level diminished notably.
Today, of course, trust in business seems to be a non-issue, as in "Wtf you mean trust is any part of a business relationship?"
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Re: How to handle "cheap" clients

Post by RobertGonzalez »

When your target is mostly businesses they tend to understand that there are few free lunches. I give away a lot, but I am in a service based business. It is what I charge for and I am very clear about what I do for free and what I asked to be compensated for.

I do maintain a high moral and ethical standard so I make sure that my clients know what to expect. There are few, if any, gotchas when it comes to my work. At least that is what I aim for.

When it comes to things like working specs however, well, my time is valuable. If I am expected to work under the umbrella of "just do what we tell you we want and we will hash out the finances at the end" then the client has to expect that the charges will never stop coming in.
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