March 3, 2020

Another client perspective on hourly billing

Sent by Jonathan Stark on March 3rd, 2020

A quick announcement: Coming back by popular demand is The Pricing Seminar, led by yours truly. Registration opens on March 5th, and you can sign up for more information by visiting here. Now, on to our regularly scheduled program...

The handsome and talented Erik Dietrich wrote in with a response to a recent message (subject: “We’ll let you know”) in which I asked the reader to imagine ordering a ham sandwich without knowing the price.

Here’s what Erik had to say (shared with permission):

Hey Jonathan, Your analogy about the restaurant landed heavily with me. I’ve had a few particularly maddening encounters lately with hourly vendors, which prompted me to write a ranty, long blog post about hourly billing. I used a similar analogy about buying a candy bar from a grocery store and the clerk telling you, “I dunno how what you’ll pay -- you’ll find out when you get an invoice in 6-8 weeks, once we factor in our electricity and insurance costs for the month.” In complete seriousness, I’m now putting a moratorium for our business on dealing with vendors who bill hourly for deliverables like contract reviews, tax returns, or other things that any so-called professional should be able to flat price or price per unit of scope. I’m done. Erik

Here’s a link to Erik’s article (if you’re a dev, you should check out his blog anyway… it’s gold)

Here’s the thing…

Clients hate hourly billing. You can increase your prices instantly simply by providing them with fixed prices - the added security and decreased stress are very valuable to good clients. Try it on a small project and see what they say.

Yours,

—J