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Jul 02, 2004 3:36 pm re: re: re: Sales... Job #1
- Hilary Baumann - Fascination Design

I actually overestimate on my estimated pricing so that I can stick to my estimates. I have literally lost some potential clients on project bidding because I do this (and some people in the industry prefer to underestimate to get the job so they can tack on additional fees or things that "weren't expected".) Some people ONLY care about price.

I'm pretty sure that the people who have gotten upset with my final bill have more than a simple problem with the bill - they seem to have emotional money issues that rear their ugly head when they actually have to part with their money. Or they've spent money on various things and they get what I call "low bank account balance panic." It's most likely to happen with first time business owners just getting started because they underestimate how much they will actually spend on the start-up as a whole. (Keyword "stressful" which leads to potentially irrational emotional outbursts.)

This is just my guestimate based on my experiences (who got angry, what they were complaining about, how they acted before they got their bill etc. etc.)

Doing logo design it's inevitable that I will have some clients who are start-ups.

I have made some changes in order to try and head off these bad emotional experiences for my clients and for myself but nothing is 100% foolproof.

I won't charge on a flat fee basis. I tried it a few times and people abused my time and were more indecisive about what they wanted when I did that. I've found that people are much more decisive and vocal about what they want when they know they are being billed based on time and that I can send them an amendment estimate if they make large changes to the focus of the project (I don't think I've had to send a single amendment estimate yet.)

You are definately right about people undercharging for services. I started out at what looked to me like a high rate because in my mind it was much higher than what I would be paid hourly to work for someone else's business but I quickly realized that there was a difference because billable hours and the numbers of hours I was working each week and there were also business expenses I hadn't expected. I raised my rates I think 4 times in the first year as I learned more and more about business and where I was going to have to spend money in order to stay in business (a networking group membership here, a new printer there etc etc.)

Anyway - I need to get back to my projects and catching up on reading my ryze messages (otherwise I could probably talk about this topic a lot longer.)


Hilary Baumann

> George Morgan wrote:
> Hi Hillary,
>I don't understand why anyone would get upset if the bill came in under the estimate. Have you thought about charging on a flat fee basis or on a quoted fee basis? Many clients prefer this method, though the drawback is that you could end up working for free, as it were, if the project exceeds the cap.
>Personally, I find that many service providers charge too little for their services, especially when it isn't a cookie cutter type of enterprise.
>> - Hilary Baumann - Fascination Design wrote:
>> > Eric Sohn wrote:
>>>What part of the Sales process is the most intimidating to you... and why?
>>-- Talking money/pricing with new clients.
>>I literally have clients who think my pricing is way too high and then I have others who think my pricing is way too low. I've had people curse me out when they get the bill (even with it under the estimated cost I quoted before the project) and I've also been told bluntly to raise my prices because my pricing is too low for the value.
>>With new clients you don't know what their mentality is on money which makes it intimidating.
>>I've done a lot to "ease the pain" of talking about pricing with people but I don't think there's a "perfect cure" for it as long as so many people think about money so differently from one another.
>>Hilary Baumann
>>Owner, Fascination Design

Private Reply to - Hilary Baumann - Fascination Design (new win)

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