Sent by Jonathan Stark on June 11th, 2019
Longtime friend of the list Anthony English sent in this anecdote about his thought process while trying to choose a removalist company - aka “movers” to us Yanks ;-) (shared with permission):
Hi JS (for sharing, if you want), We’re moving house. The new house is about an hour’s drive from the existing one, and we need removalists. We’ll have settlement on the old house and on the new house simultaneously. What that means is that we won’t have access to the new place until the day of settlement, and we have to be out of the old house on the same day. One other complication: we have a piano to move. We got three quotes. All three promised two trucks and four men and to move everything in one day. So, how do we decide which one to choose? One told us he couldn’t move the piano, but then came back with a one-line fixed-price written quote which included the piano move. 🤔 The second came in with a half-hourly rate. This left us wondering how much time we’d be paying for. 😰 Let’s assume they’re honest and fast workers. We still have to do a mental calculation of how long it might all take. We last moved house 18 years ago and we had no children at the time. These removalists move houses every day, and I’ll bet they could make an estimate within an hour (give or take) of how long it would take. But they left that to us. Billing by the half hour just sounded far too risky and put too much burden on us to be guestimating their effort. The third removalist gave us a fixed price quote. If they move the house contents in 4 hours or in 10, we don’t pay a dollar more. The verbal quote included the piano. The written one didn’t mention it. I’ve sought clarification. “If that includes the piano, we’re going to go with you.” There’s so much more these removalists could do to lift their game, at virtually no cost to themselves. But we’re going with the third one. One thing’s clear: we’re not paying for removalists. We’re paying for certainty. The one we’re going with is closest to giving us that (even though they forgot to mention the piano). —AE
A quick way to convince yourself that hourly billing is nuts is to hire someone by the hour.
Unless it’s a very small investment (e.g., babysitter) I think you’ll quickly start to understand how your clients feel... it’s like there’s a leak in your bank account and no way to plug it.
For non-trivial projects billed out at high hourly rates, the lack of certainty creates a very stressful experience for the client. Many (most?) clients will pay a large premium for a fixed price because it feels so much less risky.