I second Wayne's 3-level proposal structure and John's addition to it.
If you think back to any of your custom work, whether scripts, reports, or UDFs, I think you'll agree that your firm's time is, on average, spent roughly equally in three buckets: solution definition (whether formal or not), executing the technical work, and then the installation/support/tweaks/changes.
So if you want to start from a "cost" side, take your estimated time to execute the tech work and triple it. Maybe make that your bottom rung (or lower!)
If you think about your past this way, you'll realize that you can never get away from even a simple mod on less than 2-3 hours IF you factor in the initial calls, the questions, the installations, the questions afterward, and details y'all missed in how it would be used. So a minimum price of $500-$750 for the simplest of the simplest is a good start.
When you tell a customer, "we can't touch a
simple script for less than $500 (or $750)", it communicates an important piece of value information to them right there. Then you have their attention and you can get a decent q&a going about what the problem is and why they want to solve it.
At the end of that <g class="gr_ gr_946 gr-alert gr_gramm gr_inline_cards gr_run_anim Punctuation only-ins replaceWithoutSep" id="946" data-gr-id="946">q&a</g> you can probably come with 2-3 approaches to solving the underlying problem. Or maybe the scripting is the only way. If you have different approaches (script vs UDF?) make each an option in your proposal. This also requires the customer to understand the differences and the implications for them; you *must* verbally walk them through this, and it *must* be written, even if only an outline.
Wayne's outline has at least 2 elements that I've also found quite effective: enforceable response times which increase with the price, and a roughly 3x price for the top choice compared to the basic one. (But do NOT just split the difference for the middle one.)
For me, the hardest part of value pricing was forcing myself to come up with the 3 options and the paragraph that outlines the WHY for the customer (fewer errors, faster response, lower cost, etc.). I have learned that if I don't include at least a simple claim of why the customer wants to make this change, it's much harder to get the proposal accepted. Be sure there is an explicit signature acceptance on this proposal for all but your most trusted customers.
One last thing. For any customization work, it is prepaid with satisfaction guaranteed. If they trigger a response penalty, the work stops until the penalty is paid, You will only have to do this once for each customer.
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Jerry Norman
Smartbridge Partners
Austin TX
5124191444x112
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Original Message:
Sent: 03-19-2019 20:51
From: John Hoyt
Subject: Value Price ... what should it be
I've always believed that a custom script, custom report, or custom office project starts at $750 and the final quote is subject to a detailed scope analysis and SOW. The $750 originally was just what I chose, but rarely ends at that amount. So when the customer asks why or comments that it seems like a simple request, I remind them that our conversation to discuss the need, us expanding on the request and considering the approach and documenting that, and their approving it before any work has started is at least $750. Eventually they start understanding that if they are not prepared to spend at least $750 or do not see value at that amount, they should probably not bring it up. I don't want that, because the other side of the equation is the true value to them, which they may not know or know how to determine it. The point is that there are no customizations that are just an hour or a couple hundred dollars.
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John Hoyt
john.hoyt@formingsolutions.com
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Original Message:
Sent: 03-19-2019 17:40
From: Wayne Schulz
Subject: Value Price ... what should it be
I'd think about having a minimum fee for scripts. You pick the number.
Then I'd offer:
1. Create the script - offer 3 days approval - all changes after that subject to an additional fee - $800
2. Create the script - offer 10 days approval - all changes after that subject to an additional fee - $ 1,200
3. Create the script - offer 90-day approval - plus up to 3 changes - all changes after that subject to an additional fee - $ 1,800
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Wayne Schulz - Schulz Consulting - 860-516-8990