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You are absolutely correct about this. People at all ends of the market spectrum have a very strange psychology about hourly rates; for some reason, if you han
by abalashov 16y ago
You are absolutely correct about this. People at all ends of the market spectrum have a very strange psychology about hourly rates; for some reason, if you hand them a quote that foresees 10 hours at 175/hr and is expressed that way, that strikes them as an eye-poppingly high number. They start comparing your services to the prices to those of high-end attorneys and accountants and so on, exercising prejudices about how programmers should be paid less than that because they are more like plumbers or electricians than litigators, and general wheel-dealing, bargaining, nickel-and-diming, etc.
In addition to that, the large-scale body shops serving the enterprise market, the ones we all know about that darken the skies with individually-billed people and squeeze as many hours as they can without the impression of efficiency, have left such a bad taste in the mouths of many people who no longer work in enterprise that you invariably have to fight against it every time you sell your services.
But if you hand them a quote for 1750, even with the 10 hour estimate baked in for their mental math to operate on (but especially if it's not, and once you quote an aggregate price itemising the time apart from overall delivery time frames for the most part ceases to be necessary), some switch flips in their brain. I cannot say what it is, or why -- it just does. Somehow, the combination of shifting the risk for overages onto you and the more opaque number causes them to start evaluating the overall sum more in terms of business value and less in terms of whether anyone should be making "that kind of money." It's really odd, but it has been overwhelmingly the norm in my line of consulting trade.
- hasenj 16y agoIf you quote the rate, and the project takes more time, it becomes their problem; they have to pay more now. If you quote the overall price, and the project takes more time, it's not much of a problem for them; they won't end up paying any more than they would have otherwise.
- abalashov 16y agoWell, yes. Exactly. :)
- tptacek 16y agoStop! There is no reason why you have to assume the project risk just because you chose a more sensible metric to quote the price with. Provide a top-line project cost number as an estimate, and then add an "additional time can be added to this project as needed at a rate of $XXX per day" clause. The question of who assumes project risk is orthogonal to the question of how you choose to break out project cost.
- hasenj 16y agoI'd rather that part of my service is to give my client a sort of guarantee on the cost, given the requirements[1]. How many hours I work? What technologies I use? What OS do I work on? What's my text editor? What version control system do I use? These are things they shouldn't have to concern themselves with -- I'm a black box. Do you ask Apple how much it cost them to make that iPhone? No! [1] If the requirements change, then of course, my price will change (most likely increase).
- krschultz 16y agoI wonder how much of it is that if you bill $175 an hour, they instantly compare it to their own salary. If it is someone in purchasing, it is higher than them. If you bill someone at an executive level it is equal to them (and they will think of this as below them), if you bill an engineer they will think it is higher than them. Now, I'd argue that is a fair rate if you are that much more productive than the average developer, but it instantly makes people offended. I still like the idea of billing by the hour though.
- abalashov 16y agoPerhaps, but the idea that a comparison of a contract hourly rate for a short-term project vs. a salary is in any way, shape or form apples-to-apples is absurd. That doesn't stop some people with no elementary business sense from failing to realise it, though.