Regular client wants me to reduce prices

[ikeo]

.... extortion is not the answer.

The client paid for some work, that work belongs to the client and can be re-used in additional projects for the client.

Anyone suggesting the OP should be re-charging for work he doesn't have to do again because he's already done it and been paid for it is doing nothing short of suggesting thievery.

Then you don't understand the business of web development ...
The OP has developed a system that he can deploy for any number of clients.
That software belongs to HIM as long as he did not sign a contract saying the job was "work for hire" or giving the IP rights of his code to the buyer.
He is free to charge what he wants for it because this is a free market.

Does it make sense to antagonize a smart buyer by charging him the same price everytime for the software that he just has to customize and deploy ... probably not. But he can do it if he wants, there is simply no law against it.

Microsoft has probably spent a few billion developing Windows Vista, are they going to charge us $1 million for a copy of the software (that costs $2 to print) .... of course not, but they will charge us $200 - $500 and we are free to pay up or use Linux.

[fkr]

bla bla bla

Yes ... that must be it. Now go back and read the very first post. He did the work for the client not independently.

[ikeo]

Yes ... that must be it. Now go back and read the very first post. He did the work for the client not independently.

No need to be rude. Just point out exactly where it says he did "work for hire" or signed over his intellectual property rights. There's nothing in the first post that says that he did, but maybe you can prove me wrong.

[shadowbox]

So let me get this straight. The client pays for the development of the code, and the developer is still charging the same price for all subsequent projects that use the bulk of that code? That is not value pricing, that is just ripping off the client. If you'd developed the code independantly of the client then it would be fine, but you didn't.

Your client now knows you are doing less work, so it's only common sense that he'll want a discount - negoitiate or lose him to another developer who is willing to provide a decent licensing system.

[Clenard]

I agree with Sagewing. You HAVE to treat your Customers better than your prospects. Even new Customers shouldn't get the same treatment as an Old, Valued Customer who has been around for a long time.

New Customers need to show you - much like you need to show them - value in order to give them what you give Customers who might have already paid you Thousands (or much more, of course) of dollars and stuck around before trying the "Discount" stores.

Treat your current Customers like Kings... those are the ones who have counted on you and you can count on them to come back. New Customers have to earn that right. Don't fool yourself in thinking you need to give away your product to earn a new Client when they will more than likely move onto the next great deal. Rather than you earn their trust -- make them earn yours. Quantity becomes less valuable than Quality for a Business who wants to stick around.

Why is that? I give established clients better deals on just about everything. I trust them, I know they'll pay, I know they'll be nice to work with, and I value them more than a brand new client who might be painful to work with. Also, I don't have to factor in the cost of signing an established client because they've been with me for years, so I take that into consideration.

I'd prefer to make less money on a client as opposed to losing them entirely. If I were in the OP's situation and I wanted to keep the client, I'd work with the client to make a nice deal for both of us.

And, as a client myself (to my vendor groups) I am usually able to negotiate better deals for myself as compared to their other clients, because I pay on time and try to be easy to work with. So, I certainly don't like a level playing field - I'd rather compete!

[cheesedude]

But the problem is, the client also realizes this and now he wants me to cut off my costs by about 45-50% percent for each project we do in the future. I've convinced him to do another project with me for our usual price, but I'm pretty sure that once this one is done he would want me to reduce prices for the future projects.

You are reusing his code, right? So it is only natural for him to want a piece of what you are using. Makes sense, right?

You say you reuse 50% - 60% of the code for each project you do for him. That doesn't mean you save 50% of the time, does it?

Whatever amount you save by reusing his code (and he did pay you to produce it so he does own it technically, right?), split the difference with him. If reusing his code saves 50% of the time, discount him 25% of the cost of the project. He gets half of the savings, you get half.

Also, if you cut him a little bit of a deal, ask him to refer you to others. Maybe a little discount will make him happy and he'll kick more business your way.

[cheesedude]

If he still digs his heels in and demands more discount ask him to go and find someone who will do it for the discounted price and see if he comes back to you with anyone - I bet he doesn't and if he does it sounds like he is a client you could probably afford to lose anyway.

Tell your customer to go find someone else? That is not good advice!

That's a very arrogant attitude. The customer is always right, especially when he isn't.

[Karl]

The customer is always right, especially when he isn't.

I'm not saying it is the case here, it's not quite that extreme - But there are times when the customer most certainly isn't right, it's not often, but there are times.

At the end of the day, it all comes down to:

1) What agreement/contract you had with the customer in the first instance (That defines the code ownership)
2) How much trouble is the customer?
3) How much is the customer likely to be worth in the future (At discounted rates, once you move an inch, they will expect that inch every time, and then some)
4) Can you make the same/more money from finding new customers?

[Darkwind]

I think to a large degree the hammer whacked the nail on the head here... while I most of us that use Word or the Office Suite probably don't utilize a 10th of it's power... on the base level once you've got the Suite Microsoft doesn't come back and say okay we've added a couple a new features and we are re-marketing this to you for FULL PRICE.

Microsoft (whether true or not) is always telling how great, new and improved the next version is. In short, they are coming back at you with new features per se.

Very true, but if there are enough additional features, they upgrade the version and then charge roughly 60% for an upgrade rather than pay the full price for the newest version.

That may be where the crux of this lays.

If your not offering any new features with the library code, then its only fair to charge your time (flat or hourly) and a depreciated value of the reused code.

I would however, recoup some of the costs by charging a maintainence fee for all existing websites.

[fkr]

No need to be rude. Just point out exactly where it says he did "work for hire" or signed over his intellectual property rights. There's nothing in the first post that says that he did, but maybe you can prove me wrong.

Sorry, it was by the OP but lower down on the first page.

It would mean that his costs went down, while his profit remained the same/increased, just because *I* will be re-using the libraries that *I* built for him.

There you have it. He did the work for the client, now he's having a cry because the client doesn't want to continually pay for work that he's already paid for, that's already been done and that isn't being done again.

[junjun]

echnically, yea, the code that I'll be re-using makes up about 50-60% of each project, but lets not get into a debate about whats moral and not.

Your client I'm sure will benefit from you already being able to complete a project faster for him. If it's a real issue (client really wants a rebate and not just kicking tires), offer your client 10% off future projects. Cutting your prices 50% because you found a way to work more efficiant is insane.. Just the fact that your client comes back to you for work tells me that your prices are not too high. Tell your client the applications are still equally advanced and takes the same skillset to put together.

And from reading the posts here, you'd think one here was your client

[kosh]

Tell your customer to go find someone else? That is not good advice!

That's a very arrogant attitude. The customer is always right, especially when he isn't.

That's not good advice, either. I know "the customer is always right" is a cliche that we all think we're supposed to follow. But if we take that to the logical conclusion, the customer is going to ask you to work for free, be perfect, anticipate future growth, outdo all competitors, and be thankful for the "learning opportunity." We get a whiff of that attitude when clients decide to outsouce to countries with terrible/nonexistant labor laws, awful poverty-level wages, sweatshop-like environments, etc. There has to be some ethical/financial line that you uphold. You cannot pay your rent/mortgage and feed your family in such one-sided jobs.

The more accurate suggestion is something like, "the customer is typically more valuable than the prospect, and retaining a customer is usually far cheaper than winning new ones." With that, you can at least figure out the math for when the scales tip away from your favor.

I had a client that asked me to bid on the project. No hourly work. So I did my hourly estimate (12 days), added 3 days of padding, and sent that in as the bid. We had agreed-upon requirements documents, so I wasn't fearful of feature creep. But nonetheless, they badgered and bullied me into doing 15 days of EXTRA work, and took NINE MONTHS to pay. This customer is not right. I ended up making half the wage I planned on, and went into (small) debt to cover expenses, because this client ate up an extra 3 work-weeks of time, was unwilling to renegotiate, and in the end, only paid the bill because I refused to do new work until they paid for the old work.

That is NOT a good customer. A customer that causes me to burn through savings and eventually miss paying bills is a customer that has taken too much advantage. Losing that customer made me a happy boy. If digitman is in the same difficult situation, he needs to think hard about whether he should keep fishing or cut bait. If he's not at that point, well, maybe my next post will be more applicable.

-Tony

[Sagewing]

The customer is not always right, nor is the vendor. You can't sum up a business relationship like that (except in some rare cases, mostly in the retail/consumer world). Business relationships are complex, and the customer doesn't really care much about the minutia, principal, or other details of your pricing model.

I agree with shadowbox's comment above. Customers are looking for value and they have common sense. You can debate all these points, but in the end the customer wants, expects, and deserves a fair deal as determined by the general practices and standards in the industry (and not in the developers mind). Just look at how many opinions there are on this very thread. The only one that matters is the opinion of the customer, which is going to be determined by his/her perceived value and understanding of the pricing in the marketplace.

[kosh]

Whatever amount you save by reusing his code (and he did pay you to produce it so he does own it technically, right?), split the difference with him. If reusing his code saves 50% of the time, discount him 25% of the cost of the project. He gets half of the savings, you get half.

These comments seem to be predicated upon the idea that he's in a flat-bid situation. Because if he's charging hourly, then he's just charging for the time he's really working, and discounts on time actually worked hardly seems normal. So I guess that if this really is a flat-bid contract, the client will likely hold the developer to the bid in the case of cost overruns, so it seems fair that the developer holds the client to it, also. Especially if the developer made the bid with the idea that cost savings later would offset the initial learning curve costs.

Personally, my model is similar to what a few others have touched upon in this discussion. I reuse code all the time. My contract grants clients "non-exclusive, perpetual rights" to my code. Meaning, they own it, but I own it too. I reuse everything. It turns out that clients are very willing to engage in shared ownership when they realize that I can build something twice as good for half the development time, because I'm standing on the shoulders of all my old projects. Because I try to do hourly jobs (rather than bids), I charge only for the time I work. If I can do something in 3 hours because a year ago I invested 30 hours into building some libraries, well, then the client is only billed 3 hours. If I do 3 hours of work with the libraries and then 40 hours of customization, the client is paying. It's real hours worked, so I expect real money. I never need to artificially inflate my hours, nor do I need to bid on projects as if I'm doing it all from scratch. There is always more work. The better I do, the more projects arrive on my doorstep.

That may be an option for digitman to consider. Bill hourly, don't bid. Bill only for real hours invested. As you get over the learning curve, projects go faster. That doesn't mean you starve because you have very little to charge -- it means you get more projects. EDIT: and it means you get to charge more. My hourly rate goes up by about $10/hour every 18 months or so, as I get faster & better.

-Tony

[ikeo]

+1 to kosh. Very excellent point.

A lot of people are wary of hourly billing because they feel its tantamount to giving the developer a blank check, however, I find that my best clients are the ones that just let me bill them hourly for work I do. They are confident in my abilities and because of their trust in me I go the extra mile to make sure I do good work for them and give them a heads up when I'm in a tricky spot with situations where work takes longer/is harder than I initially told them. Again the underlying theme here is "trust". If your client doesn't trust you or thinks you're out to"get them for all you can, then it can lead to some really nasty confrontations and a bad working relationship.

However, fixed bidding can actually work to your advantage, since there are only so many hours in a month. So if you can leverage your past experience and do a job in 10 hours and bill $3000 for it ... why not? I think the contrary view point is up in arms about the morality/ethics of the OP's pricing, which is fair to an extent (since the client has a choice of moving to another developer). It cuts both ways. Its a free market, but its just good business to treat customers well.

[digitman]

I'm so, so, so sick of this client.

Thanks for all the replies everyone, but I really have to rant about this here.

This guy is a nightmare for a client. He's a lot like the guy Kosh mentioned who took 9 months to pay. He was all right in the first few projects we did, even though they were low price jobs, for some reason I led myself to believe that as we work more he will become worth his while. How wrong I was.

This guy actually *tries* to make me think my code is of low quality, and I'm a crappy programmer, because he doesn't want me to think that I do quality work and raise my prices or find a higher paying client.


There was a place in the recent job I finished for him where the script had to do a 15-30 second long processing. I put some AJAX in there so it shows a 'Processing..' message with a progress bar image, instead of having the form actually submitted and the users seeing a blank page for 30 seconds before they see any message. When I asked him what he thought of that, his reaction was "It was ok. But don't we have any other options?". That was really because of the reason I mentioned above, he loved this feature, but didn't want me to realize that.

Also, I put a lot of AJAX, javascript and a lot of additional bits to make the site function better. Did he, even once, say 'Nice job on that page', or even acknowledge that those things exist which he didn't pay me to do? Hell no!

I have now realized that he wants to suck my blood and make me do all he can get me to, paying the least possible. And the biggest thing is, he doesn't make a lot of money himself. He only makes about as much a month as I'm targetting to be making. And he has a wife and a kid to support. I don't think he can even provide me enough work for a decent price. I should just give up on this.

Each day he tested out the site, he would send me "bug reports" like:
"Feature XYZ (which he never mentioned in the specs) on page ABC missing."
If it hadn't been that I had already finished the job and I just wanted to get it over with and get paid, I would've never done all that additional work.

There were a few times I slipped on my deadline on this project, which was partly because I was doing customer support for one of his websites which took me 5-6 hours a day, and he never paid me for that. BUT, I more than made up for this as the quality of this site is heaps better than what he asked for. He still used my missing the deadline to threaten me into doing as much additional work he could get me to do. When the time came to to paying for the customer support, he said "We'll see. I'm still very mad at you for missing the deadlines."

Now its been 2 days since the site was completed, all minor bugs and tweaks made, etc. Then, when I asked him yesterday when I'll get paid, he said "I still haven't thoroughly tested this and want to before I pay. I'm very busy these days...." (even though he has tested it all out).

I told him he doesn't have to worry if he's busy, as I'm going to stick around and fix any issues he might have in future like I have done for his previous projects (which is true), and can he please pay me now. And he said "I know, but I still want to test it first.." .

I said, "OK, how long do you think it'll take you to do all this testing?"
He said, "This monday."

Then today (sunday) I got an email from him which said "Hi! Can you re-install the site to this other domain name and put these two final additional features in these pages? After you do I'll test things one last time and pay you."

I was happy, thinking may be now he's starting to get it and hurriedly did it for him. Then I said, anything else? And his reply was...
"Yea. Just give me until monday to test this all out. I'm very busy today..."

I said, you already tested it all out and told me you'll pay me today. and he said "Yes, but i want to test it all over on the new domain name." OK, WTF!

I asked him how will he rate me on this project (we're using RentACoder to handle this, fortunately, otherwise he would have definitely run away without paying). He said, "How do you think I should rate you with all these delays?"

The real reason he doesn't want to give me a good rating is so that my chance of getting new clients is minimized and I have to stay trapped into working for him. I know that because the last time he tried to make me give him a discount, i told him that job is below the minimum amount I work for, and he said "OH! Looks like all these 10s I'm giving you at RentACoder are helping you a lot!"

I think he is suspecting me to run right after he pays. Which is partly true. I'm going to do any bug fixing and minor tweaks he needs, but doing another job with this guy will be definitely my very, very last option.

I am suspecting that he will be putting this project into dispute at RentACoder tomorrow, as I think it can't be done on weekends, which is why he asked me to wait till tomorrow. Luckily I did upload all the code to RentACoder in time, but its quite possible that he somehow gets this done in his favor and i don't get paid for this job, or at least not fully paid.

I've put a small bomb in his code. If he does not pay me, then I will use this bomb to have revenge. Sorry, but I just have to do this. The bomb is put on a hidden URL on his site which he isn't likely to ever see. When it runs, it lets me see the number of users and customers his website has. And if I run it with an extra parameter, it'll delete his database. Its possible, that if he doesn't pay me, and when he gets a lot of customers, i'll run the bomb to have his database deleted. THAT, will teach him.

If he pays me though, I'll remove the bomb. I promise.

[digitman]

I'll post an update when he either pays me, or he puts this in a dispute.

[davidjmedlock]

Very interesting discussion here so far, but this concerns me:

I've put a small bomb in his code. If he does not pay me, then I will use this bomb to have revenge. Sorry, but I just have to do this. The bomb is put on a hidden URL on his site which he isn't likely to ever see. When it runs, it lets me see the number of users and customers his website has. And if I run it with an extra parameter, it'll delete his database. Its possible, that if he doesn't pay me, and when he gets a lot of customers, i'll run the bomb to have his database deleted. THAT, will teach him.

If he pays me though, I'll remove the bomb. I promise.

This is HIGHLY unethical. I believe that RentACoder stipulates that all work is done as "work for hire" (may be wrong about that) meaning that he owns the code once its paid for. That being said, he also owns the data and your destruction of the data could lead you into a whole horrible heap of legal issues. It would be paramount to theft/vandalism/hacking, really. (Except you put the trap door in yourself to make it easy to hack...)

This guy sounds like a nightmare client and I understand your frustration. I think that everyone in this business has had that frustration at one time or another. My suggestion: Tell him that you've already done enough and that you need to be paid, go through the RentACoder dispute process and provide all the documentation you possibly can to support your case. Once you are paid, discontinue the relationship immediately, refusing to respond to emails, future work requests, etc. Have nothing to do with him. Move on to search for more rewarding work with clients who will appreciate what you're doing for them.

If it weren't work for hire, we might be having a different conversation (though the trap door is definitely out of the question no matter what). If you owned the code, you could repurpose it, package it and sell it to anyone you want in order to recoup the cost of development. But, if he legally owns the code and still has the cash in HIS pocket, then you're pretty much at his mercy...

[digitman]

Hey david,

Thanks a lot for the reply. I hadn't considered the possibility of putting this in dispute myself, but I might do this now. Do you think I should wait till tomorrow to see if he pays, or just go ahead and do this?

About the code bomb, the code I've uploaded at Rentacoder doesn't contain this, so he doesn't have any proof that I put this in. I could say that he did that himself so he doesn't have to pay me. But I'll remove it if we're to put this in dispute.

I won't care too much about getting sued or even tracked for that, as I live in south asia (india/china/pakistan region). But you're probably right, I should probably remove that.

[digitman]

Should I wait till tomorrow, or just put this in dispute, then?

[digitman]

David,
thanks a lot for posting that. I needed someone to tell me I was wrong, as I was acting purely on emotion and not thinking rationally. So I've removed the code bomb now.

[Dan Schulz]

Good idea on removing the code bomb. It never should have been in there in the first place. Since you suspect (very strongly at that) that the client is trying to "own you" I'd forego the niceties and put this into dispute resolution yourself. Don't wait for him, since doing that will just cause you to shoot yourself in the foot.

[jg123]

Doesn't this client own the code you created for them? Could they not just take their business elsewhere with the code and get a cheaper price?

[Dan Schulz]

It depends on who legally owns the code. Under US copyright law, if you create something, you automatically own the copyright to it, unless you assign it to someone else. I don't know the specifics of the OP's situation, so I really can't comment any further either way.

[adesignrsa]

EDIT: I have just read your last few posts and my message below is not required. I suggest letting this client go, and if you lodge the dispute against him before he does it to you might be a good approach on RAC.

Digitman: Sorry if this has been addressed, but as your client is reselling your work... has he dropped the price at which he is selling this work on to his clients?

If the answer is no, then I don't see his request for you to discount your work being justified.

A bulk discount might be reasonable (over x projects per month for instance), but to halve it (unless he is halving the cost to his clients) is far from a reasonable request.