I was very surprised by the last article I posted about how charging by the hour sucks.
It received some heated comments on Reddit.com and some disagreement in the article comments.
I feel it is important to clear up some of the misunderstanding and clarify some of the misplaced assumptions.
Is charging by the project too rigid?
First, it was assumed by many that what I was proposing was a rigid and set way of billing customers that didn’t leave room for changes. The argument was that if you are billing by the hour, you can easily just add more hours to it. One individual said it was much easier to deal with scope creep when billing by the hour because you can always add more time.
I completely disagree; web design scope creep is and will always be a major pain no matter how you are billing. Scope creep gets out of control when the project was not well defined at the beginning, because the client is assuming one thing while you are thinking something else.
The client already thinks that the estimate you gave them includes everything they are thinking. So whether they are paying by the hour or per project, they are going to be surprised when you tell them later on that what they assumed is not what you billed them for or part of the estimate.
What I like about billing by the project is that it forces you to define the scope of every project up front. Billing by the hour does not. Too often web designers give an estimate and dive into a project blindly, and billing by the hour makes this very easy to do. So charging by the project helps you to prevent problems down the road.
Define Everything Up-Front
The second assumption was that it is impossible to know what a project will consist of up front. While I agree that you will never know every little detail to begin with, and there will always be surprises, that doesn’t mean you can’t define project boundaries before beginning the work. Even when you are billing by the hour, most clients expect an estimate or even a bid up front. Either way, you want to have as many details as possible to begin with.
Yes, it is true that clients will usually not be able to provide these details, but that is where you as the expert should come in. Don’t put the burden of defining the project scope on the customer; the burden is on you if they don’t know what exactly they want. Talk it through with the client, look at their competition with them. List out the pages that similar sites have, and ask them which ones they want. Then part of the project scope is up to X amount of pages. (X being the number of pages they said they wanted, with a little extra padding.)
Next, talk to them about dynamic elements. Do they want any kind of animation or video? What about search capability, a blog, or small elements like a tag cloud? Show them examples and get them to think about what it is they really need. This is a good opportunity to up-sell them and convince them of a bigger vision for their website.
Now, you have set boundaries of X number of pages with these specific dynamic elements. If they want to add more pages later on that is no problem, but you refer back to your agreement and inform them that this is beyond the original scope and will incur additional fees. The key is to put a number to everything you possibly can.
One big advantage that I haven’t mentioned yet is that most clients have a budget in mind. Charging by the hour makes it easy to go over budget, while strictly defining the scope of a web design project and giving them a set price makes going over the budget nearly impossible. In the end, this leaves you with a much happier client.
For the last 6 years, I have been mostly serving the tax and financial industry, and this system has worked very well. Maybe it would not work with every type of client; I just haven’t found that type yet. If you still think I am wrong, please let me know in the comments below.
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