Sent by Jonathan Stark on July 7th, 2018
Let’s imagine a typical long-term hourly billing scenario:
Alice has been doing work on Bob’s website for a little over two years. She tracks her hours and sends Bob a bill every two weeks.
The engagement started out as a complete website redesign and platform switch. The project took her about 10 weeks.
This was 4 weeks longer than Alice had originally estimated but Bob was happy with the progress and the relationship so he didn’t complain about the overage.
Once the new site was launched, Bob had Alice fix a bunch of little weird unexpected bugs. This phase took a couple weeks.
As the bug list finally started to dwindle, Bob had Alice start on minor feature additions, content updates, and small design changes.
Eventually, Bob ran out of upgrades and additions, so all he had left to assign to Alice was security updates required by the platform, formatting his monthly email newsletter, and occasionally building one-off landing pages for seasonal promotions.
For this entire period, Alice has been billing Bob every other week for the number of hours worked multiplied by her hourly rate.
At this point, Alice begins to suspect that Bob is getting a little price sensitive.
He’s questioning hours entries more than he used to. He’s asking for discounts more regularly. He’s sending fewer tasks to Alice.
Alice likes Bob and she believes that she still can add value to his business, but it has become apparent to her that Bob is having a harder time justifying her fees.
She’d like to keep Bob as a client but has grown tired of hourly billing and wants to start to move away from it.
What are Alice’s options in this situation?
In a situation like this, here are some things I would recommend Alice consider trying:
<li dir="ltr"> <p dir="ltr">Switch to a flat monthly fee, paid in advance <li dir="ltr"> <p dir="ltr">Sell forty hours blocks of time, paid in advance <li dir="ltr"> <p dir="ltr">Pause work until accumulated tasks are significant enough to warrant a project proposal, and on that proposal offer two options: an hourly estimate, and a fixed price that is 85% higher
But here’s the thing...
Bob will probably not go for any of these options because his perceived value of Alice’s assistance has dropped significantly over time.
Metaphorically, her role has gone from architect to janitor over the course of their two year relationship.
So really, she’d probably be better off minimizing or eliminating her hourly commitment to Bob in order to make time to start attracting new clients for high value work that can be priced accordingly.
P.S. Friends don’t let friends bill by the hour. Gift options available at checkout -> hourlybillingisnuts.com
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