21–30 of 128 posts
This is the difference between business-to-business versus buying consumer goods. You can't waste time negotiating with every client who buys a $50 pair of shoes from you - it's just not cost effective. So you have a fixed price for everyone. However you can (and should) negotiate with people buying $20k worth of services from you. Historically, the consumer experience is actually the exception, not b2b. Up until fai…
There are two angles at play that got a little mixed together in the video. The first is the hard bargain during initial negotiations (ala the CD for much less) the second (and much uglier) is the restaurant, where after the work is done the client flat refuses to pay. I'm fine with the former, you get what you pay for, the latter however, really makes me mad.
Seriously. Even though I know it's all mocked up, every time the video cut to the restaurant my pulse started to rise.
There are two angles at play that got a little mixed together in the video. The first is the hard bargain during initial negotiations (ala the CD for much less) the second (and much uglier) is the restaurant, where after the work is done the client flat refuses to pay. I'm fine with the former, you get what you pay for, the latter however, really makes me mad.
It does go both ways, though. I'm a software developer/consultant and am sympathetic to the video but lets look at from the other side. Most pro level consulting teams work open ended time and materials contracts. There's very good reasons for this, but this definitely gets abused to deliver a project that was never expected to come in on budget. It also exposes the client to the effects of bad management or other in…
I whole heartily agree with your summation. Fixed price just sets it off on the wrong foot in the first place. What I generally do, is provide my best estimate of what the project will take. I also agree if the project runs past my estimate by 15% that I reduce my rate to my bottom dollar rate. This way I am not handing it out for free, but they understand that I am not trying to run up the clock as well. The other thing we agree on is that any feature creep pushes the estimate back by the size of the feature. I have found that this works well, gives the customer a comfort level, and though it is my rock bottom rate, I am not eating costs left and right for a project that goes bloody. It cost me opportunity costs but not hard out of pocket costs which are far harder to swallow.
Earlier quoted context omitted.
It does go both ways, though. I'm a software developer/consultant and am sympathetic to the video but lets look at from the other side. Most pro level consulting teams work open ended time and materials contracts. There's very good reasons for this, but this definitely gets abused to deliver a project that was never expected to come in on budget. It also exposes the client to the effects of bad management or other in…
It sounds to me like the creator of the video probably does fixed price bidding, at least in part. In my experience that's never a good idea or worth doing - even if you can manage it OK (extremely unlikely) you end up alienating the customer by having to be so anal about scope creep. I whole heartily agree with your summation. Fixed price just sets it off on the wrong foot in the first place. What I generally do, is…
This is the difference between business-to-business versus buying consumer goods. You can't waste time negotiating with every client who buys a $50 pair of shoes from you - it's just not cost effective. So you have a fixed price for everyone. However you can (and should) negotiate with people buying $20k worth of services from you. Historically, the consumer experience is actually the exception, not b2b. Up until fai…
This is where price discrimination comes in, and it is staggeringly effective: coupons, sales, discounts, etc etc. The great thing about fixed prices is that there are so many to choose from!
This is the difference between business-to-business versus buying consumer goods. You can't waste time negotiating with every client who buys a $50 pair of shoes from you - it's just not cost effective. So you have a fixed price for everyone. However you can (and should) negotiate with people buying $20k worth of services from you. Historically, the consumer experience is actually the exception, not b2b. Up until fai…
You can't waste time negotiating with every client who buys a $50 pair of shoes from you - it's just not cost effective. This is where price discrimination comes in, and it is staggeringly effective: coupons, sales, discounts, etc etc. The great thing about fixed prices is that there are so many to choose from!
This is the difference between business-to-business versus buying consumer goods. You can't waste time negotiating with every client who buys a $50 pair of shoes from you - it's just not cost effective. So you have a fixed price for everyone. However you can (and should) negotiate with people buying $20k worth of services from you. Historically, the consumer experience is actually the exception, not b2b. Up until fai…
Even where I live (Melbourne, Australia) a very non bargaining place, some restaurant districts have bargaining cultures. If you play your cards right, you can get wine and dessert thrown in if you order the steak, site by the window before the dinner rush (makes the restaurant look full).
My point is that bargaining norms aren't necessarily evolved from necessity, it's often just cultural quirks. This video is poking fun at a particularly quirky subculture.