I got a referral some time ago for a client who had all sorts of great things that needed doing. We agreed a reasonable hourly rate although it was discounted because they were supposed to be sending so much work my way.
When it came down to doing the big jobs, however, it turns out the company are real cheap skates and they have some cowboy internally that ‘tries’ to do most of the work then they come to me with the odd hour where I just clean up his mess. The tiny amount I end up charging them (for the odd hour that I do) is hardly worth invoicing for. So, I feel like I want to tactfully, get rid of them. My problem is that I orally agreed to do any work they wanted at this competitive rate. I know I could just tell them where to go but I like to think I’m a fair and decent person so that fact I gave them my word is making me feel uncomfortable with doing that.
My gut is to tell them times have changed and my hourly rate is now £XX and I charge at least £YY for a job. That way they may want to ditch me for being too pricey. I think that’s fair as they’re really just wasting my time as is.
Interested to know your thoughts or if you have been in a similar situation…
I can feel what you going through i had a client that once i make him ran away from me forcefully. i was giving them like 20% discount coz he was refferal and the guy wuld make me come to him again n again n couldn’t decide wht he want. and the time i spend sitting in his office while he finish up other work you can only imagine. i told that guy this is the rate. i increased the 3rd party hosting price which i was paying to them by taking from him. then i raised the price of website design though it was ok but some ppl don’t get what is web. so eventually he stopped calling me and ran away.
Hope it heps
How long ago did you give them the rate? If it’s more than 6 months ago, it’s very reasonable to give them 30 days notice that you’re charging a new rate for their account and that if they need you to help them transition to someone cheaper, that you’ll be happy to do that over the next 30 days at the rate you’re currently charging them.
As for the “odd-hour” work, keep a timesheet and bill them in chunks, not after each time they have you do something. I have some clients that do odd-hour things throughout the year and I wait until I’ve either filled a timesheet or gone long enough between billings before I send them an invoice. I was just looking over one timesheet this morning that I’ve done odd-hour work over the past 6 months without billing and I’ll wait for a slow month and bill them in order to smooth out my own cash flow.
Gas rate changes over night not in 30 days. coke price change within days not 30 days. the world changes doesn’t wait for a period to end. however if the client question ur raise tell them any excuse like my rent got more, i m having hard time couping up wid my bills.
There is no reason to not increase your rate for new work. As long as you charge the old price for any work they have already given you that you haven’t yet billed for they will have no grounds for complaint. You don’t have a contract requiring any particular advanced notice on price increases.
Why not just tell them that the small amount of work they put your way is not viable at your discounted rate. Even in this strange twisted world; people still appreciate honesty. You can suggest a revised rate and give them a get out by saying that you understand that they may wish to reconsider their position in light of the increases however you have no alternative other than to apply the new rates from say the 1st August. As other posters have pointed out prices change, web design is no exception.
The arguments for changing your prices immediately work fine if you are a commodity, like gas or Coke, which can be purchased in equivalent quantities, qualities, properties from one vendor to the next.
Does your business offer something that’s a commodity? My business offers services and I strive NEVER to be considered a commodity. I consider my relationship with each of my clients to be something unique and valuable to both of us. As such, I know that it will be difficult for my client to replace the services I offer. So that’s why I always give clients a minimum of 30 days warning for any changes to our relationship, including pricing or availability.
You can, of course, do what you want with your business. Just know that all of your actions speak volumes about your business, whether you want it to or not.
Tell him you’re moving your billing process to “prepaid” for 20 hours and that’s the only way they can keep the discount. Then you don’t have to worry about invoicing every week. If he doesn’t like it, c’ya
If I were you, I would be honest, and not feel badly about it. They led you to believe that there would a lot of good work, and they are sending you something different. You didn’t agree to work on dribs and drabs, so it’s not really the work you quoted on.
I am in a different profession, but I know that for me to take on a project of less than an hour is usually a real loser. There is a significant amount time involved in switching gears to get into a project and then again when you move on to the next one.
Tell them the truth. Maybe they will respect you for it and maybe they won’t. But you’ll respect yourself and, if you are ever faced with explaining the events to someone who has heard the story from your ex-client’s point of view, you will have a respectable story to tell.
I understand the whole situation, normally the client consider himself more sharp play like this…
If this is the situation ever then get rid of him either by saying I am not free at all give me some time to get free from my work then I do it, or be clear with him that first we have commited on this much work load and now the it changed so contract is needed to be modified according to it as well…
This kind of situation client wants to learn the things and needs your expertise only to learn from your experience…
I think you should let them know your point of view. You were led to believe that you would be doing great projects but instead you are doing firefighting and disaster relief for their “cowboy”. It’s not what you signed up for so it’s time to part ways.
You can also say that you have had an increase in your own clientèle and as a result you are booked xx months ahead.
By the way, most arrangements where you are supposed to be on hand to do cleanup require a retainer so that it’s worthwhile for you to drop everything and deal with their problems.
Whatever choice you decide to take (and I would suggest you do take a direct and unapologetic approach), learn something from this.
I had the fortune of learning from a mentor in my business. One thing he told me that still rings in my ears today is:
“Rule 1 - Don’t lower your prices
Rule 2 - NEVER LOWER YOUR PRICES!”
He went on to back up his statements with the idea that if you lower your prices even once, the client is going to think you have marked up prices for others, or have room to lose profits. Even if its only a reward to a respected client.
In the future they would be more inclined to ask for a discount in addition.
I had one client do a lot of work with me (and I do mean a lot!), and one day he said he wanted to contact me over the phone. We arranged a teleconference and he blatantly outright told me he wasn’t going to pay what he is currently and he wants a big discount so he can continue ordering. What a bribe, I thought!
I bluntly and monotonously told him that that wasn’t going to happen, despite my gratitude for his business. I went on to tell him what I pay my employees and what I pay the government in taxes.
That must have struck a wrong note with him because I haven’t heard back from him since.
Good riddance, I don’t need clients like that. And neither do you.
(And I do bend my rule sometimes for clients I have personal relationships with. But in the case of discounts, I usually get one back when I need services they offer )
I’d be quite straight foward: The prices were agreed because the work flow was supposed to be high but that’s not the case and hence prices should be charged as per normal rates. If he doesn’t like it, then simply tell them “Well, it was really nice to work with you but I am afraid that this is not profitable for me” and end the relationship.
I agree with mobyme, be polite but honest. The terms of the agreement were not real, so you shouldn’t feel guilty for going back to a normal rate. You should also be honest, customers need to know what they are doing wrong and why the situation has changed. But you need to say it in such a way that it doesn’t look as you’re blaming him or anything. Just in a professional way.
You should talk to the owner of the company that you work for. The owner can usually understand the difference between good and bad job. If you explain the real situation to him, you will end up receiving good job and get paid well, while the “cowboy” will make his way out of the company.
If the owner misunderstands what’s right, you just stop any relations with them. You have full right to stop your relationships with anyone, without much explaining.
What I have finally been able to do is move all my clients over to a ticket system where I require them to request work there. I then require hours be paid up front, and all hours worked are reported. When I talk to them on the phone, I tell them they need to start by giving instructions on what they need done via our job area, not the phone. This has worked pretty good for me so far.
For a big customer I am always willing to talk on the phone, but for a smaller customer, they need to show some hours first, as I am busy helping our customers that have already pre-paid for hours.
be honest with your customer, tell them that your price was based on a certain amount of work, as this did not happen, while you still value them as a customer and still want their business however this is your original price, so you have not increased your price, rather remove steep discount you offered
Some great advice here from others, so I won’t repeat what they said. Simply, charge more or tell them you can’t work for them anymore.
I would like to give my opinion on discounts though… hourly rates are interesting. They’re built to cover lots of hidden expenses, often including finding new business, invoicing, etc. Sometimes there is room to discount a rate for a really good client who sends a lot of work and pays on time.
That said, never discount work based on promises. One of the biggest red flags I see is “we’ll send you tons and tons of work, but we need THIS one cheap.” Uh, no.
Only give them the great client rate after they’ve shown that they’re a great client!
You have to earn that status, it’s not a bargaining tool. If they’re trying to get you to lower your rate based on the theoretical amount of work they’re going to be sending, it’s just a tactic to get a lower rate. They may or may not have that much work. Don’t fall for it.
The last thing you need is to undersell yourself. Definitely, some clear terms with the increased rate included. Spell out what you are delivering. Use a timekeeping program like FreshBooks or something else and document the time. You’re a business and trying to make a living too–just like the company. Good luck!