Pricing invariably surfaces as a key topic in discussions with prospective clients as they seek an estimate for their project - be it building an ecommerce or a website.
Drawing upon our experience building similar projects, we are typically able to provide a preliminary budget range, provided we have enough details regarding the project scope.
One recurring inquiry we encounter is: do you offer fixed prices?
Our response is "no", and throughout this article, we'll explain why Tinloof opts for a day-rate billing model as opposed to a fixed pricing structure.
There are numerous reasons that make us stay away from fixed pricing:
New needs often emerge once we're knee-deep in a project.
Despite thorough planning, clients often request something extra, remember mid-project about a feature, or bring in a hire with new suggestions.
With fixed pricing it gets tricky to accomodate such changes.
Clients become less cost-conscious, and often treat their features like an unlimited wishlist, which can delay their timeline and add unnecessary work, which ends up being detrimental to them.
Estimating the number of design iterations can be a challenge given how subjective it is.
A fixed price model doesn't offer enough flexibility to accomodate for iterations and reaching the final output a client would be happy with.
A fixed price is often not bound to time, giving the possibility for clients to take on pauses and take more time than expected to review or approve work to progress further.
This makes a project drag for longer than expected, and results in a dip in quality.
Despite all of the above, why do potential clients still request a fixed rate?
Primarily, it gives them a sense of financial security, helping them curtail potential budget overruns, and enables them to establish a 'fixed' budget with their finance team.
There is a way to ensure such a sense of security without resorting to fixed pricing, and this is exactly what we'll demistify here.
To comfort prospects about moving ahead with our daily billing model, these are the points we highlight:
The estimates we provide are not random - they are based on our past experiences building similar projects.
Clients can always end the project and seek another vendor if unsatisfied.
We are incentivised to focus on the quality of our work and a timely delivery to avoid such scenarios (in fact, it never happened).
Clients can see what we're working on on a daily basis, and have access to a Notion board where we manage the project and to Figma.
This gives them a good sense of how the project is progressing, and gives them clarity on budget consumption and remaining timeline.
If we finish a project earlier than expected, we can use the remaining time to focus on other tasks that were planned for another phase.
We've worked with this model countless times with previous clients, and we encourage our prospects to have a chat with a couple of our clients to reassure them about its efficacy.
One of our primary motivations is to produce work that we're proud to feature.
Therefore, we have a strong impetus to complete projects in a timely manner, enabling us to showcase them in our portfolio.
This approach is further validated by the positive feedback we receive from our clients, which fortifies our case studies.
The ability to display an extensive array of high-quality work increases our appeal to prospective clients.
Ensuring our clients' satisfaction not only prompts them to consider us for future projects, but also serves as a potent incentive for us to adhere to the proposed budget and deliver output that meets their expectations.
So far, this pricing model has been a hit.
Clients are happy, billing is straightforward, and work can be paused or expanded without fuss.
Charging per day encourages clients to think carefully about feature requests, focusing on what’s most important, while we can focus on doing the job right without feeling rushed.