Re: How to price? Re: How to price?I think that charges in this case should either be based on time spent for
non-routine types of activity or in the case of some routine operations
packaged together and done on a set fee basis based on some predeterminded
value to the customer. The trick is to not shortchange yourself while
simultaneously spending the customer's money like it is your own. After
registrating 15 clients on a standard set of indexes you may have automated
much of the actual work. Is it right that you charged your first customer
10 hours for a service that you did for your 15th in 30 minutes?
>Part of the activity though is to search the net for appropriate
>groups, information sources etc. Depending upon the nature of the
>product this may result in a lot of suitable sources found for little
>effort, or it could mean that we spend a lot of time to little effect.
>
>If we charge for the time spent our customers might end up paying for
>an effort that yields them no value. We could of course make it clear
>to them that this might happen, and we could perhaps guess on the
>liklihood of finding good quality information for them on the basis of
>our knowledge and experience - but we might be wrong.
>
I think here Nick is simply talking about market research. And the model
that exists from the community of market researchers is a good model to
use. I sell HyperWidgets. I come to Everytown and want to set up shop to
retail my HyperWidgets. My firm contracts with a market research firm to
find the right location. I should select that firm on the process and
methodology that they go through to arrive at a conclusion. Most likely I
am going to pay by the hour or by the project. If by the project the
researcher has a good idea of how much time each element of the research
will take and has priced accordingly. The researcher will produce a report
giving me an answer to my question(s) about the market. An ethical
researcher may come back with the answer that there is not a site in
Everytown that would work given that no one in Everytown has an interest in
purchasing HyperWidgets. Do I still pay him? Sure. The negative answer
is as important to me as a list of the three top sites.
As Internet Marketers we should sell clients on the methodology that we
study the market for them and let them know that a whole spectrum of
answers are possible - even negative or inconclusive ones - given our
methods. Those methods should then be priced by the hour or by the
project. AND we have to have the ethical founding to tell them that the
Internet may just not be the place to be for their company today.
>If we charge on the basis of some sort of 'success ratio' (groups
>identified, emails sent - which would be difficult to define in
>itself), we might end up spending a lot of time searching without
>success, and earning nothing for our efforts.
Tough issue. I think that there is a built in accountability with much of
the services available on the net. What do you tell a client whose Web
page has no hits? 'Success ratios' are important but should be used as a
measure of success and an opportunity to fine tune or redirect projects and
not a level of payment.
Traditional advertising charges are based on distribution. Your back page
ad will be seen by 50,000 readers means that my print pub will go to 50,000
copies nevermind that 20,000 of those may go bundled into the dumpster out
back (believe me I've seen this happen). Often times print pubs sell on
the after distribution circulation of their piece as well. "An average of
3.5 people read each copy." They are selling raw traffic. These numbers
are cooked up by a variety of statistics and voodoo.
The net is different because I can look at daily hits on a server and get
an idea of how many people are actually reading my page and accessing my
information. Should you charge based on that? In a virtual mall set-up I
can look specifically at sales figures. Should you charge based on that?
The overall success of the project, decisions to continue, to expand, to
redirect, etc. should be based on success ratios. Charges should not be.
They should be based on the work done for the client.
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Doug Davidson
1591 Presidential Drive, Apartment A-3
Columbus, Ohio 43212
Internet: gddavids@magnus.acs.ohio-state.edu
CompuServe: 71753.656@compuserve.com
Voice: 614.487.9488 Fax: 614.469.8250
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