Sent by Jonathan Stark on February 18th, 2017
Reader Mike Dougherty wrote in to share his recent success (shared with permission, lightly edited for clarity, bold mine):
Hello Mr. Stark,
I suspect for you this is obvious. But being new to this, and it only being a short time since I started, I am very thrilled. Amazing stuff! Awesome sauce!
As I noted in another email, I was in search of supporting my determination to never to do “lump sum/fixed bid” while in the midst of writing a proposal for a customer. The first draft of the proposal stipulated that I thought giving them a “lump sum price” was a bad idea.
When the customer asked for some revisions to the proposal I had already started your Value Pricing Bootcamp, and some of your other material. So I took the opportunity to include an “Option #2: Goal Price”. Since I had not had the chance to have the “Why?” conversation with them, I used your “85% more” formula. And they took it! I had convinced myself that they would not. This client is a non-profit with a very low “software development” budget. So I was sure they would take the seemingly “least-expensive-hourly” route and gamble that it come in at or under the estimate. But they choose the “Value Price”. Awesome.
They did suggest 50% up front, 25%/25% later based on deliverables. But I am confident that I can get them to choose specific dates. I reinforced that the “Goal” is guaranteed, even after the project is considered “complete” (I quoted your ice analogy, I hope that was OK). I also offered that if they are not happy with the progress of the project as the 30/60 day markers approach, we can discuss alternate dates. BTW, is this an option that you recommend or not?
Anyway, thank you once again for sharing your knowledge. You have one more convert in your quest to “rid the earth of hourly billing”. I still have some learning to do. But I am convinced this is the right direction.
Kind regards, Mike
Thanks for sharing, Mike!