November 18, 2017

How much would you charge for $1M In savings?

Yesterday in Slack, one of my buddies told us he spotted $1M in annual saving on a client’s hosting bill.

So here’s the question:

How much should he charge?

On one end of the spectrum, he could charge them a million dollars and they’d break even after the first year

On the other end, he could charge them a couple hundred bucks for the hour or so of time it took him to identity the savings.

This is obviously a massive range. A number that is equitable to both parties lies somewhere in the middle.

Here are a few things I would recommend you consider if you find yourself in a similar situation:

All of these considerations can factor into calculating a price for the recommendations that will be considered fair by both you and your client.

If this sounds complex, that’s because it is. I would understand if it seemed overwhelming.

But my hope is that even if you erred way on the low end of the spectrum, you’d at least not bill them hourly for such a valuable application of your expertise.