Boy, this post apparently touched a sensitive nerve: The scariest pricing idea ever. That works.
The notion (even the possibility) of allowing clients to decide how much to pay got a lot of people commenting, retweeting, forwarding and linking. Very intriguing.
Some 100 or so readers offered perceptive comments here (thank you for chiming in).
The post also prompted this discussion at yCombinator’s Hacker News. Lots of pro and con, back and forth, including some perspectives that I hadn’t heard before, which will be woven into this section in the upcoming Talking Money.
Oh, and notice that the highest-rated comment in the Hacker News thread was this first-hand story. Purely human, and not about money at all.
The grossly oversimpified summary:
Freelancers who seem to like their clients were intrigued by the idea. They were more willing (at least in principle) to submit themselves now and then to a ‘value judgment’ on their skills. They wondered if they would be pleasantly surprised.
Freelancers who have wary and contentious relationships with their clients hated the idea. They figured they would only get screwed by their clueless, cheap-ass clients. Which is understandable.
Although (trust me on this) mutual suspicion is a painful and unprofitable business model. There is MUCH more money in relationships where you and the client sit on the same side of the desk, trying to do amazing things.
If you are both circling each other like two wrestlers in a ring, you both lose.
And, one of the most unexpected comments to the post, from Thorbjørn in Denmark:
Drunk customers pay more in Denmark
“Me and a few others are running bike taxis and we also sometimes tell people pay what you want. . .
“Usually the drunk people will give a lot more (although they usually tip pretty good too when you give them a quote)
“The people who just hop on without asking for a price first are usually the most generous.”
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I used to try asking client how much he would pay right after I’ve completed his project. It was a full flash site and it was back in the 90s.
He said $50.
I know never to try this again.
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The time to use this technique is when the circumstances are in your favor. For example, (website industry) you build something that means a lot for the client, saves or makes them money, but it only took a few hours OR you had the code from a different project and simply implemented it on their site.
Let’s say you build a small addition to the site in the design phase knowing the client would want it later (a content management system or something). You build it, it only takes a few hours so you create it in the beginning when your profit margin is still worth something.
Then you can make a few code adjustments and like magic the client has a great feature. Are you going to charge 2 hours for your time? – for building something that might be worth thousands?
When the advantage is all yours, then it might be worth it to ask them what value they place on the service or end product.
I can see how this would work – but in the web business, in particular, no one values the work, the time, the energy to stay on top of the technology – so leaving the price to them, is often a huge mistake.
People see “Websites Build it Yourself For $9.99″advertised so their expectations are skewed.
Most companies spend $30,000-$200,000/ year on their website and e-marketing. You can’t get a quality site for $10, not even in India.
Like you said in the first article, you have to choose this method based on circumstances, but I’ll add that the circumstance should always be in your favor.
May work, with certain clients in certain project. But in general… no. And I mean NO. Price is never fair. Especially when working in the creative business. It is a matter of what a customer think it is worth. And you are willing to ask for. E
Just a good advise.
Specially in our business they are quickly to say… “Hey this idea is so obviouse.. I could have had it by my own”. This after you have spend one week sleepless working on several concepts. Think again…