andyrutledge
Andy Rutledge
Survey: When you've determined the value of a project result to a potential client, how do YOU factor that into your project cost?
nathan_ford
Nathan C. Ford
@andyrutledge How would a designer determine the value of their client's product?
@andyrutledge How would a designer determine the value of their client's product?
andyrutledge
Andy Rutledge
@nathan_ford The client does. This information is exposed in conversations (pre-bid)
@nathan_ford The client does. This information is exposed in conversations (pre-bid)
nathan_ford
Nathan C. Ford
@andyrutledge Been reading your tweets. Not sure I understand. If your client’s estimated benefit is greater, you raise your rate higher?
@andyrutledge Been reading your tweets. Not sure I understand. If your client’s estimated benefit is greater, you raise your rate higher?
andyrutledge
Andy Rutledge
@nathan_ford Sort of, but there is no "rate." Hours only account for our costs, not the product's value. No hourly stuff.
@nathan_ford Sort of, but there is no "rate." Hours only account for our costs, not the product's value. No hourly stuff.
nathan_ford
Nathan C. Ford
@andyrutledge A rate can be set daily/weekly too , but I understand. Why does the product’s estimated value factor in at all?
@andyrutledge A rate can be set daily/weekly too , but I understand. Why does the product’s estimated value factor in at all?
andyrutledge
Andy Rutledge
@nathan_ford Because bespoke design and development is not a commodity product. You're not buying time, you're buying your business success.
@nathan_ford Because bespoke design and development is not a commodity product. You're not buying time, you're buying your business success.
mynameispj
PJ McCormick
@nathan_ford @andyrutledge What happens if the business fails after the project is complete?
@nathan_ford @andyrutledge What happens if the business fails after the project is complete?
andyrutledge
Andy Rutledge
@nathan_ford Yes. If you stand to make $300,000k/year from my work, it has more value to you than if you stand to make $1000/year from it.
@nathan_ford Yes. If you stand to make $300,000k/year from my work, it has more value to you than if you stand to make $1000/year from it.
aexmo
Alex Morris
@andyrutledge @nathan_ford surely you can't charge like that? be nice though. i'd be living on a private island by now :)
@andyrutledge @nathan_ford surely you can't charge like that? be nice though. i'd be living on a private island by now :)
nathan_ford
Nathan C. Ford
@andyrutledge But that’s due to the client’s efforts, not yours. We strive to provide the best solution; or would you throttle your service?
@andyrutledge But that’s due to the client’s efforts, not yours. We strive to provide the best solution; or would you throttle your service?
andyrutledge
Andy Rutledge
@nathan_ford A thing you want has a specific value to you. If it has less value to you, you're not willing to pay much for it. But...
@nathan_ford A thing you want has a specific value to you. If it has less value to you, you're not willing to pay much for it. But...
nathan_ford
Nathan C. Ford
@andyrutledge But the thing that is wanted by the client is a unit of work. That sets the price. The *product* involves more than design.
@andyrutledge But the thing that is wanted by the client is a unit of work. That sets the price. The *product* involves more than design.
andyrutledge
Andy Rutledge
@nathan_ford If you're the client and I don't do this work for you, you can't realize any profit from it.
@nathan_ford If you're the client and I don't do this work for you, you can't realize any profit from it.
nathan_ford
Nathan C. Ford
@andyrutledge Some other agency will do the work. The product will live on. May not be designed as well, but it lives.
@andyrutledge Some other agency will do the work. The product will live on. May not be designed as well, but it lives.
andyrutledge
Andy Rutledge
@nathan_ford ...partly on the value of the work to the client, you have no idea how to negotiate and, in fact, will negotiate erroneously.
@nathan_ford ...partly on the value of the work to the client, you have no idea how to negotiate and, in fact, will negotiate erroneously.
nathan_ford
Nathan C. Ford
@andyrutledge Negotiate time and negotiate rate. How do you itemize “Your potential success”?
@andyrutledge Negotiate time and negotiate rate. How do you itemize “Your potential success”?
nathan_ford
Nathan C. Ford
@andyrutledge Basically, what are you selling? Success or time? How do you guarantee success?
@andyrutledge Basically, what are you selling? Success or time? How do you guarantee success?
andyrutledge
Andy Rutledge
@nathan_ford I'm a bit disappointed, though, that you can't even buy the basic principle that value is relevant in pricing.
@nathan_ford I'm a bit disappointed, though, that you can't even buy the basic principle that value is relevant in pricing.
nathan_ford
Nathan C. Ford
@andyrutledge Yes, my value. Not the client’s percieved value of the product.
@andyrutledge Yes, my value. Not the client’s percieved value of the product.
andyrutledge
Andy Rutledge
@nathan_ford The client's perceived value of the product is the primary reason he/she will pay any price. Your value, too, but only as part.
@nathan_ford The client's perceived value of the product is the primary reason he/she will pay any price. Your value, too, but only as part.
nathan_ford
Nathan C. Ford
@andyrutledge But I am not selling the product to the client. I am facilitating it’s creation with time and expertise. These are my products
@andyrutledge But I am not selling the product to the client. I am facilitating it’s creation with time and expertise. These are my products
andyrutledge
Andy Rutledge
@nathan_ford And yet, once you've done your work, a product exists. That product will bring profit (let's say) to the client. It matters.
@nathan_ford And yet, once you've done your work, a product exists. That product will bring profit (let's say) to the client. It matters.
nathan_ford
Nathan C. Ford
@andyrutledge I have no further input into the success of a product beyond its design. I get paid for my time, I move on.
@andyrutledge I have no further input into the success of a product beyond its design. I get paid for my time, I move on.
andyrutledge
Andy Rutledge
@nathan_ford Yes. Leaving thousands of $ on the table. People will pay for what is of value to them.
@nathan_ford Yes. Leaving thousands of $ on the table. People will pay for what is of value to them.
aexmo
Alex Morris
@andyrutledge just to be clear are you inferring you'd charge a bank more than a charity for the same work? @nathan_ford
@andyrutledge just to be clear are you inferring you'd charge a bank more than a charity for the same work? @nathan_ford
andyrutledge
Andy Rutledge
@aexmo ...if the charity stood to earn less profit from it than the bank. @nathan_ford
@aexmo ...if the charity stood to earn less profit from it than the bank. @nathan_ford
nathan_ford
Nathan C. Ford
@andyrutledge @aexmo The idea of charity muddies this a bit. How about two banks? Same work, diff. percieved results?
@andyrutledge @aexmo The idea of charity muddies this a bit. How about two banks? Same work, diff. percieved results?
aexmo
Alex Morris
@andyrutledge that's a noble quest but not sure how that would play out in actuality @nathan_ford
@andyrutledge that's a noble quest but not sure how that would play out in actuality @nathan_ford
andyrutledge
Andy Rutledge
@aexmo What I'm saying is that THIS is exactly how the market already works. I make purchasing decisions based on value to me @nathan_ford
@aexmo What I'm saying is that THIS is exactly how the market already works. I make purchasing decisions based on value to me @nathan_ford
nathan_ford
Nathan C. Ford
@andyrutledge But in this case, it would only work if the market – or clients, really – agree to it. @aexmo
@andyrutledge But in this case, it would only work if the market – or clients, really – agree to it. @aexmo
andyrutledge
Andy Rutledge
@nathan_ford All commerce only ever works if the buyer agrees with it. When you base on perceived value, you know how to negotiate @aexmo
@nathan_ford All commerce only ever works if the buyer agrees with it. When you base on perceived value, you know how to negotiate @aexmo
andyrutledge
Andy Rutledge
@aexmo Which is precisely why we must not price like a commodity. @nathan_ford
@aexmo Which is precisely why we must not price like a commodity. @nathan_ford
nathan_ford
Nathan C. Ford
@andyrutledge I think it would be dangerous for us to trade on success. Too many risks on both sides. @aexmo
@andyrutledge I think it would be dangerous for us to trade on success. Too many risks on both sides. @aexmo
gryghostvisuals
Gray Ghost Visuals
@andyrutledge @aexmo @nathan_ford The Slam dunk for the whole discussion. We're not a fucking commodity. Reason why theme forest sucks.
@andyrutledge @aexmo @nathan_ford The Slam dunk for the whole discussion. We're not a fucking commodity. Reason why theme forest sucks.
mhenders
Matt Henderson
@gryghostvisuals @andyrutledge @aexmo @nathan_ford Not a "slam dunk". The founders of IDEO grappled w/ the same issue, and went hourly.
@gryghostvisuals @andyrutledge @aexmo @nathan_ford Not a "slam dunk". The founders of IDEO grappled w/ the same issue, and went hourly.
andyrutledge
Andy Rutledge
@mhenders Intelligent people can disagree on this stuff, but it has not yet been explained properly. @gryghostvisuals @aexmo @nathan_ford
@mhenders Intelligent people can disagree on this stuff, but it has not yet been explained properly. @gryghostvisuals @aexmo @nathan_ford
aexmo
Alex Morris
@nathan_ford @andyrutledge sounds a lot like mad men era ad agency model. smaller upfront fees and paid on performance.
@nathan_ford @andyrutledge sounds a lot like mad men era ad agency model. smaller upfront fees and paid on performance.
nathan_ford
Nathan C. Ford
@andyrutledge Not sure anyone *would* pay that inflated rate. There would be too many guesses built in.
@andyrutledge Not sure anyone *would* pay that inflated rate. There would be too many guesses built in.