Sent by Jonathan Stark on November 4th, 2016
Question from a reader:
How do you handle competition with all those other developers that quote projects on an hourly basis and make your number look much higher?
All of my sales and marketing makes it quite clear that I am not the cheapest option. By the time a prospect gets a proposal from me, they are expecting it to be high (if not the highest).
If the client raises a price objection anyway - something like “But you’re twice as much as the next bid!” - I’ll ask:
“Are the other bids prices or estimates?”
They’ll be forced to admit that the other bids are estimates.
I then say to the client:
“Why do you think the others are unwilling to stand behind their prices? I’ll tell you why. Because they know their prices are too low and are low-balling you to get the work. Would you rather know the actual final price up-front? Or find out after you’ve spent your entire budget and are only half done?”
The difference that this comment highlights is that I am willing to take on the risk of the project and my competitors are not.
Most businesses hate risk and are willing to pay a premium to avoid it.
P.S. Are you addicted to hourly billing? Here’s the cure: http://hourlybillingisnuts.com