[IxDA Discuss] hourly rates, price and value

[Robert Barlow-Busch]

>  From a psychological perspective, when one describes these fear-
> based scenarios what we're really doing is revealing how "we're"
> afraid of being perceived. Perhaps you think you may go slowly or be
> overwhelmed with work,  but I don't believe it's appropriate to
> project that onto others (or our profession).

I'll go out on a limb here and suggest that Liz's advice to charge
"value-based pricing" instead of time-and-materials wasn't motivated by
fear. It was motivated by sound consulting practice, which Alan Weiss
describes well.

I think Liz's scenarios were spot-on: if you're not willing or able to scope
out and provide a total price for your services, what does that communicate
about your confidence in the work and in your abilities? When you take your
car into a garage for service, how would you feel if the mechanic said
"we'll charge you by the hour until it's done sometime later today or
tomorrow"?

I understand that our projects can be ambiguous and that per-diem or hourly
rates are required for work where scope is impossible to define. But if you
can reasonably define scope, I encourage you to charge a fixed price.

This is a touchy subject, because fixed-price work can be perceived as
"ripping off" clients if you manage to get the work done quickly. However,
realize that clients won't agree to your fixed price in the first place
unless that figure represents the *value* of the work you'll provide. Hence
the term "value-based pricing."

My $0.02 based on ten years of consulting -- and charging a fixed price the
majority of time.

-- 
Robert Barlow-Busch
Terapath Inc.
bbb at terapath.net
www.chopsticker.com