Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Why Your Customers Would Be Happier If You Charged More

kalzumeus.com

Post reply on HN
Print view View original

61–70 of 89 posts

Re: Why Your Customers Would Be Happier If You Charged More

#61

Post by wisty »

patio11 wrote: post #45
wpietri wrote: post #43

Earlier quoted context omitted.

That's a little tautological, and kinda glib for me given the dilemma he describes. As you surely know, you're using "returns" in a technical sense. I'm awfully fond of free enterprise as well, but it is important to note that there are a lot of kinds of scarcity it doesn't fix, and many sorts of returns that it ignores or can't handle well. Infant mortality, for example, isn't well served by market mechanisms; babie…

Infant mortality, for example, isn't well served by market mechanisms I disagree more with this statement than any other statement ever made in good faith on Hacker News. Kids not dying is an outcome we urgently desire, right? There are a variety of products which support this outcome. One is "soap." Soap scarcity is a real phenomenon: some rooms that children are born in have no soap. Those rooms kill lots of childr…

> There are more complicated reasons for child morality than lack of soap

The most important one being a lack of information. Except in the poorest slums, where people can't afford soap.

If fact, they may be wasting their money on stuff which increases infant mortality. Infant formula may be marketed as being healthier than mother's milk, but without proper sanitation it's much worse.

> Children die because, almost universally, someone has strangled the market that would otherwise be allocating soap towards their rooms.

It's ridiculous to say that, unless you know of some place in the world where soap is insanely expensive. They'll die because their families were poor. The ultimate causes of poverty are complex, and probably relate to dysfunctional states which (among other things) don't create functional markets. But to say that the ultimate problem is "not enough markets" is silly. Would public education help? Does their government need to enforce anti-corruption laws?

You can't look at a government which does everything wrong, and say "the big problem is, they don't allow markets to flourish".

But some things (like immunization) can be done cheaply (if somewhat inefficiently) by something that's not a market.

Re: Why Your Customers Would Be Happier If You Charged More

#62

Post by ef4 »

wpietri wrote: post #43
patio11 wrote: post #26

Earlier quoted context omitted.

The market will, indeed, tend to allocate scarce resources (like the time of skilled engineers) onto the projects which get the highest return from utilizing those scarce resources. (I'm not saying this to nosetweak: despite this being one of the most important ideas of the last several hundred years -- a reproducible technique for ameliorating scarcity , holy cow -- it's either buried under the mechanics of demand/s…

That's a little tautological, and kinda glib for me given the dilemma he describes. As you surely know, you're using "returns" in a technical sense. I'm awfully fond of free enterprise as well, but it is important to note that there are a lot of kinds of scarcity it doesn't fix, and many sorts of returns that it ignores or can't handle well. Infant mortality, for example, isn't well served by market mechanisms; babie…

> Infant mortality, for example, isn't well served by market mechanisms; babies have no money.

Stop and think about why this sentence is extremely silly.

Who is really the customer?

Re: Why Your Customers Would Be Happier If You Charged More

#64

Post by dusing »

tptacek wrote: post #31
thaumaturgy wrote: post #14

I've only just skimmed this -- won't have time to fully read & listen to it until much later today. But I wanted to bring up something that I didn't see mentioned anywhere in there. You have to charge more. Aside from all of the arguments in terms of value and avoiding pathological customers and so on, there's one more really good reason to charge more: you need the money if you want to be awesome. I've been running…

You can afford to hire people who are good. You just can't afford to do it the same way Square can, or with exactly the same candidate pool Square works from. Ping me sometime. The most important part of my job for the past 2 years has been this problem.

Recruiter?

Re: Why Your Customers Would Be Happier If You Charged More

#65

Post by chmike »

jd wrote: post #23
thaumaturgy wrote: post #14

I've only just skimmed this -- won't have time to fully read & listen to it until much later today. But I wanted to bring up something that I didn't see mentioned anywhere in there. You have to charge more. Aside from all of the arguments in terms of value and avoiding pathological customers and so on, there's one more really good reason to charge more: you need the money if you want to be awesome. I've been running…

I think you're trying to do both business and charity at the same time, and that doesn't really work I think. If you run a great business and make lots of money (by providing even more value to customers) you can then put that into any pet projects you may have. It will even go much faster. You can now commit to help 10% of all your customers for free, for now into the future, and charge a sensible rate to everybody…

This is the only viable model for free. The balance depends on the cost of free and the benefit of not free. The cost of free (or cheap) should include the cost of support of bad clients.

Re: Why Your Customers Would Be Happier If You Charged More

#66

Post by adrianhoward »

Alan01252 wrote: post #34

As a freelance developer myself, and thanks to Patio11, I've always had the charge more mantra firmly placed at the front of my head. So it's a little disheartening to hear on the basis of what was said in this conversation, that I'm still selling myself short. Without the advice I've read here, I doubt I'd of lasted the four months I have so far... The hardest part of this "charge more" philosophy is finding the cli…

Yet today they stated they could get two developers for the price I was charging and would have to think about hiring me unless I was prepared to negotiate.

And that, in of itself, is a negotiation tactic. It might be true - but it's much more likely to be a method of getting you to drop your rates. You set the top level at $dayrate. They've now set the bottom at $dayrate/2. They're now hoping for something less than $dayrate as the end result.

If it were me I'd be saying something like "Well - that's great. We obviously don't want you to waste money, and I can be working on some stuff for some of my other clients. Would you like me to brief the new developers when you get them on board at my $higher_short_term_consulting_dayrate? Or are you happy managing the brief and project management for the guys you're getting in?"

(translation: No. I don't come cheap and can afford to leave this work. Also - you've already worked with me and know I can be trusted. How much extra effort is it going to be to manage the new folk - assuming that they exist?)

Re: Why Your Customers Would Be Happier If You Charged More

#67

Post by itmag »

patio11 wrote: post #2

This is the 2nd part of the interview mini-series with Ramit Sethi on starting a consulting business, though we both talk products in this interview as well. I'm happy to answer questions, as always. P.S. I normally try to space out publishing things, to avoid a) reader fatigue on my favorite topics and b) imposing on HN goodwill by showing up on the front page too often. That said, the next two weeks are going to se…

In part 1, Ramit mentioned an e-book about customer retention. Do you know the name of it?

Re: Why Your Customers Would Be Happier If You Charged More

#68

Post by davidw »

dusing wrote: post #64
tptacek wrote: post #31

Earlier quoted context omitted.

You can afford to hire people who are good. You just can't afford to do it the same way Square can, or with exactly the same candidate pool Square works from. Ping me sometime. The most important part of my job for the past 2 years has been this problem.

Recruiter?

No, he isn't. He runs a services company that was recently acquired. Definitely someone worth listening to.

Re: Why Your Customers Would Be Happier If You Charged More

#69

Post by thenomad »

patio11 wrote: post #37
jiggy2011 wrote: post #33

Earlier quoted context omitted.

Thanks for the reply, certainly some food for thought there. I guess there are a few things at the crux of this. Having worked on mainly typical "line of business" type software and CMS type systems I've tended to find myself on projects where the number of voices has meant that everything tends towards mediocrity and anything approaching an innovative idea gets shot down immediately. In other words it's difficult to…

Also as very much a generalist (everything from server admin to dev to SEO) it's difficult to find an area where I would feel confident speaking as an "expert" on any particular subject. This is a common worry in our field, even for people who are absolutely drop-dead world-class experts in things! You do not have to be absolutely drop-dead world-class expert in things to teach hugely valuable things to people, becau…

As a side note to this - being a generalist can be valuable too, because you can see cross-overs between disciplines.

My entire online presence is pretty much built on this - being knowledgeable about storytelling and the birth of the 3D gaming world at the same time led to me leaping in whole-heartedly at the inception of "Machinima", the technique of using 3D gaming technology to make films. There are a lot of people who are better at making films than I am - but very few of them were also competent at editing Quake levels.

But more trivially, there are dozens of times when you can cross over your skills to achieve results a specialist couldn't. Patrick has referred to one of his in the past - if you're knowledgeable about both advertising best practise and Web programming, you can create landing pages which are generated programatically to appeal to the inbound traffic from your PPC ads.

That's a nice bit of synergy which I believe has netted him a non-trivial amount of money in the past. If you're a programmer and an ad guy, it probably seems like an obvious thing to do - but if you're just one or the other, I can assure you it's not.

Look at two fields you know, preferably both valuable ones, and see if you can figure out things you can teach from your knowledge of both that most people wouldn't be able to.

(Another more trivial example: I've recently done some consulting work on PPC ads for a Pilates instructor friend of mine, considerably assisted by actually knowing a reasonable amount about Pilates. There are a lot of PPC ad people out there. There are a lot of people who know Pilates out there. The number of people in the intersection of the two sets, however, is small enough that I'm considering spinning the area out as a specialised consultancy.)

Re: Why Your Customers Would Be Happier If You Charged More

#70

Post by thenomad »

lotharbot wrote: post #32
jiggy2011 wrote: post #10

Whilst I agree with the basic thesis of "charge more and compete by providing value". The difficult part for me seems to be finding people who have money they can part with in the first place, you can't really sell somebody on the benefits of something they can't afford. I've recently been trying to pick up some part time freelance work to supplement my income and pick up a wider range of experience. So first stop wa…

My wife has been working through vworker.com for a little over a year, makes enough to pay the bills, and has never lost a contract she set out to win. Sites like that can be viable if you use certain strategies: 1) Communicate a lot, before even thinking about bidding. Many project descriptions are extremely vague, but by asking questions, you can often get the detail you need to put in a sensible bid that will actu…

Thank you. Several friends of mine will find this advice very valuable.
Post reply on HN