Calculating Rates
Out of context: Reply #5
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- Continuity0
Just to clarify, I think going with straight value pricing - as opposed to hourly/mark-up-only (cost-plus), or a combination of hourly and value - is most apporpriate when there is a very clearly ROI mapped out on the part of the client.
So, for example, you could imagine this when you first start scoping a client's needs before coming up with a fee and starting the work:
'Our goal is to have sales of 1 million in the first year, 2 million in the second year, and 4 million in the third year.'
And that forms the basis for you to come up with a fee that directly reflects the value of the project to them, thus keeping it fair for all parties. You get a respectable fee for a project that is intended to be a direct source of revenue for the client, and the client doesn't get shafted by cost-plus. The key is to ask the sorts of questions of your client when you're getting to know them and their needs, so that you can use an appropriate pricing method.
That said, value pricing probably wouldn't be so appropriate for identity work or things of that nature, cos you can't really attribute a financial goal to it.
- The example client comment was meant to illustrate the goals for a web shop project. Doh.Continuity