Would you rather have a fast nickel or a slow dime?

Would you rather have a fast nickel or a slow dime? (Non-US readers: Nickel = $.05. Dime = $.10).

That’s the question a successful real estate investor asks when he decides whether to accept a profitable, below-market offer on a property, or hold out for a higher price. In his opinion, a fast nickel beats a slow dime every time. He takes the profitable below market offer to cash out fast.

Most sales books tell you to hold out for your best price.

I disagree. When I hold out, I generally get the pride of sticking to my price, but don’t win the deal often enough.

When I let the client feel like they’ve negotiated me down a bit, I might not get my best price, but I still make a good margin. And I close quickly. That’s a lot better than losing a deal because I priced it too high.

(Note to the anal retentive reader — your price still needs to be in the ballpark for you, not something that costs you money if accepted).

We are selling the invisible. Our pricing should always have some room for give — especially if you price on the high end, based on value.

So buck common wisdom. Take a fast nickel over a slow dime.

What if your client doesn’t respect you? Well, you still get a client, and if you play it right so that they think they are getting a good deal that won’t be repeated, well then, both of you win.

For me, the fast nickel beats the slow dime any day.

Free book: Jump Start HTML5 Basics

Grab a free copy of one our latest ebooks! Packed with hints and tips on HTML5's most powerful new features.

  • http://www.bespokesites.com bespokesites

    I have also found that clients hold out against the prices I quote, and I only secure their services when I throw in a few ‘extras’ that seem to seal it for me.
    It seems that clients wanting web services know the market has bottomed out, and so hold the purse strings a little too tight for my liking !!!!.

  • rarstar

    Thoroughly agree with this aidea. It’s probably true for me that in the time I held out, I could have finished an extra project anyway.

    Bespokesites… what sort of ‘extras’ do you throw in?

  • http://www.dimensionmedia.com dimensionmedia

    Mostly agree with the above – however, if you talked with enough clients you can see the potential for slow dimes, which usually make a heck of a lot more than fast nickels. And honestly, it depends on your current workload and if you are making your monthly quotas. During our “non-busy seasons”, we tend to go after quick-and-close deals. Since most of our work comes from referrals, most of them we see back down the road anyway.

  • http://www.bittime.com transio

    Slow dime every time. Nickels usually wind up costing you a dime of effort anyway.

  • http://www.thewebmonsters.com webmonster

    I agree with the Fast Nickel approach too. It is better to make some money than no money at all. This is especially true for anyone just starting out. You have to take what you can get and run with it and eventually build your business up to the point where you can price things a bit higher and possibly afford to hold out for the occasional slow dime.

    Some extras that are always nice to throw in (at least for me) are things that really don’t cost you any time or extra money. The best example in my case is a break of some kind on the monthly hosting fees. We have a dedicated server and plenty of space and bandwidth available so why not tell the client something like “If you choose to work with us we can give you the first 6 months of web hosting free and we can also take care of registering your domain name at no charge to you” Most clients likely don’t have any idea that giving them the 6 months of hosting is not costing you a dime more than what you are already paying. And the domain registration fees are so minimal anyway, who cares if you have to throw that in to help seal the deal.

    If you are a just a web designer and you are not providing web hosting on top of design services then you are missing out big time on some decent residual income. If you only have 4-5 clients paying say $14.95/month then you are not making much cash but if you can build this up to 25-30 clients then you have a decent chunk of money rolling in every month.

    Another extra you could throw in could be helping to inform your client how to promote and market their new website. Obviously there are many examples from Andrew and other articles on sitepoint.com that can help inform the client and they will appreciate the fact that you are going above and beyond just building a website for them.

    Offer to design them new business cards and stationary to go with the design of the website so that they can keep a consistent look with all of their business materials. It is the little things that count and the few examples I listed will not cost you too much time or money but it might lead you to many more jobs from all the nice things your clients will tell their friends : )

    Hope that helps!

  • http://www.fruitysolutions.com philwilks

    I always find it good to hold out on an extra or two, and then throw them in at the end of the project without charging any extra. That way when it comes to invoicing the client they are in a really good mood, as well providing a positive conclusion to the project.

  • JMorrow

    Another offshoot of the “fast nickel” idea is templates. Back when I first started designing web sites, I bought a bunch of nice templates that targeted business owners and put them all into a book. Then I simply allowed the business owner to flip through the book and choose a design they liked.

    A few hours later, I had a rough draft for their web site ready. Most of the time, they requested a few modifications, but I can’t remember ever spending more than 20 hours on a site. Not bad if you’re making 1-2k per customer.

    Now, I’ve created templates for everything, including business cards, letterhead, web sites, logos, and brochures. They can be customized in a matter of minutes for several hundred dollars profit. Combine that with a solid marketing plan, where you’re getting 150-200 new clients per month, and you’re all set with a multimillion dollar business. :)

    One quick word of caution: always tell the customer that the design is based on a template, and that other people may have the same design. Most people don’t care, but it’s only ethical to tell them.

  • sc

    I agree with this post:

    “Slow dime every time. Nickels usually wind up costing you a dime of effort anyway.”

    Fast nickels tend to introduce scope creep and expect more than higher paying customers. And if you do make clear to them you gave them a great deal for the first job, if they offer you more work, they will still offer ridiculously low prices despited repeated discussions about getting appropriate pay.

  • http://www.lowter.com charmedlover

    I prefer the fast nickel and two pennies method. Your not pricing too high, and staggering up a little. But slow dime doesn’t seem to work in the cases I have tried it.

  • heyvern

    I have done both, although I am starting to lean towards the dime. I find if I constantly “cut deals” eventually I lose my shirt and the client will always expect this in the future.

    If I do a site at a lower cost and the same client wants to do another site… they hold this over my head. I am locked in forever at the lower price.

    Plus even at the lower price the client always wants to squeeze as much as they can get…without paying any more. I usually do several different versions of quotes at different prices with detailed descriptions of what they WON’T get with the lower price.

    I recently recieved a contract for a site that a previous designer had bid so low as to be impossible to do at all for that price. I almost choked when I heard it. They might as well have offered to do it for free. I only got the project because of past working relationship and knowledge of the company.

    Needless to say my client refers to this fact on occassion, “That other guy said he would do all that for a lot less you know”.

    I am shocked at how seemingly intelligent professional companies will go with the absolute cheapest web design without any regard for skills or quality or experience.

    I am still trying to find that darn “nephew” or “neighbor kid” who does “internet pages” for “50 bucks”. I need to know if that is “50 bucks” per page, or per hour or what.

    I am not kidding! I had a corporate client who, after looking at my quote, told me he had a nephew who would do their site for “50 bucks”.

  • http://www.treetech.com.pk momekh

    a fast nickle or a slow dime? not enough choices, I’d say. What about a fast dime? Because a lot of ppl here, I am sure, can relate to a slow nickle; you work for a long period only to be paid a a minimal fees that hardly breaks even. So if a slow nickle is possible, then why is the converse not true? What about a fast dime? Does anybody here think that it is possible? And how?

  • http://www.rswarren.com Robert Warren

    I vote for both, if you can pull it off.

    In my experience, negotiating rates is always a bad idea. It looks desperate and it says that your rates were probably too high anyway, and that pretty much everything else in the relationship is negotiable. Rush jobs for cut rates? Free revisions and advice? It’s like negotiating with terrorists – open the door once, never close it again.

    If a client can’t or won’t make the fees happen, you can always offer scaled-back service – fewer design drafts, a more limited project scope, etc. that brings the project into their price range. Be a consultant instead of a salesperson, and work out the best solutions for both of you.

    Any client who wants a good deal at your expense is more trouble than they’re worth. Even so, you can still make money off them. Develop information products. For the guy who doesn’t want to pay hundreds (or thousands) for a website, sell him a $49.95 book that (sort of) tells him out to do it himself.

    Nothin’ like trying to fix your own automatic transmission for an education on why the mechanic makes the big bucks.

    Rob

  • http://www.bittime.com transio

    I think some of you are confusing the question.

    Fast vs. slow is relating to the time required to close the sale, not the effort required to complete the project.

    Nickel vs. dime is relating to the relative sale amount of the project per hour of effort.

    The way I see it, if your pipeline is stacked full enough, you have enough slow dimes coming in to maximize profit potential. The only reason to go for the fast nickel is out of desperation for work.

  • JMorrow

    By transio:

    “The way I see it, if your pipeline is stacked full enough, you have enough slow dimes coming in to maximize profit potential. The only reason to go for the fast nickel is out of desperation for work.”

    Not to get philosophical, but the maximum of profit potential is infinity. In other words, you can’t maximize it.

    Also, the pipeline is never stacked full enough. Theoretically, businesses can handle an unlimited amount of work.

    If that’s the case, it’s best to make the most per hour, not the most per project. Your return on investment (ROI) is higher.

    By continuing to push ROI, the fast nickel guy always surprises the fast dime guy. Executed properly, it’s a mathematical certainty.

    Of course, there’s a lifestyle difference to consider. Going after the slow dimes is, generally speaking, a much easier and happier life. And sometimes that’s worth more than all the money in the world.

  • Mike Chrysler

    Slow Dime,

    When a client offers the fast nickel. it always costs more and they are more likely
    to add demands on later that they refuse to
    pay for. Usually Once your on the hook you’ve commited yourself and want to see the
    project thru. The client is aware of this.
    Because they know you are hungry for the buck. The more nonechalant approach you take with the client, the more likely he is
    to cave. It’s all a matter of taking control with out bruising his ego too much.

    A little bruising will send the
    deal home. Too much will send the client
    away.