
If people tried to pay for other services like they try to pay for programming - dkasper
http://www.dump.com/2010/12/13/the-vendor-client-relationship-in-real-world-situations-video/
======
axiom
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 fairly recently it was standard practice to haggle for everything you
buy. It's only the rise of the middle class and of huge companies that sell
goods/services to millions that brought about this new idea of fixed prices
that aren't open to negotiation.

~~~
cubicle67
I bargain for almost _everything_ (much to my wife's embarrassment :). One
thing I've found, is that if you can't get them to reduce the price, you can
often get extras thrown in. I recently bought a fairly expensive coffee
machine (a real one, not one of those electronic ones); supplier wouldn't
budge on price, but I _did_ manage to get $400 credited to my account, 2x
barrista training vouchers worth $150 each, and a few other little bits. Extra
value to me, over $700. Cost to supplier, assuming reasonable markup, probably
less than $300. Win win.

Edit: few things:

* Most important of all - don't be a dick. Be friendly, honest and don't waste people's time

* If you can, hold of your purchase until you get the deal you're looking for. When I got my macbook, I when to a number of places and in the end got free applecare and a free case.

* If you're buying white/brown goods (except computers), a simple "What price can you do on that?" will almost always see a 10% discount, sometimes way more.

* Some stock is in constant demand, and you'll almost never get a discount. Black mens trousers, for example.

* If something on offer, the person selling it want's to get rid of it, and will most likely negotiate. Best example is food at the end of the day. Walking past a stand discounting the remaining donuts for $6/box, but you've only got $4? Make an offer anyway.

er... think I'l stop before this looks like a post on Lifehacker or something
:)

~~~
lionhearted
Great comment.

> * Some stock is in constant demand, and you'll almost never get a discount.
> Black mens trousers, for example.

The flipside is, if you're a guy and you're willing to wear light blue, pink,
purple, and yellow, you can get some seriously great buys. You can get very
high quality clothes in those colors for dirt cheap sometimes, which is why
around half of my wardrobe is bright.

It takes a little aesthetic knowledge so you don't look ridiculous, but
everyone should probably learn a little basic aesthetics anyways - it's one of
those areas that a tiny bit of knowledge pays huge dividends.

~~~
yummyfajitas
_It takes a little aesthetic knowledge so you don't look ridiculous, but
everyone should probably learn a little basic aesthetics anyways - it's one of
those areas that a tiny bit of knowledge pays huge dividends._

Very true, but how does one go about gaining this knowledge?

~~~
lionhearted
Here's a few suggestions, in ascending order of subjective difficulty to the
average HN user:

Smashing Magazine (which doubles as good for web design).

Study the color wheel, read analyses of ways to use it.

Fashion websites.

Go to lots of museums.

Go to art galleries.

Flip through 2-3 fashion magazines per month at the bookstore.

Read book(s) on how to dress for different functions.

Go to high end stores and try things on.

Talk to artists, designers, architects, painters, etc. about why things look
the way they look.

Take some art class, either crafting/doing-based, or art history.

Go with some sort of visual artist to a museum, and ask their thoughts about
paintings.

Get a girlfriend/boyfriend/significant other who is an artist.

Any of those would help. The more you layer on, probably the faster you learn.

Also, _study_ fashion/clothing advertisements. Scrutinize and analyze why they
chose what they chose... many fashion ads will be regarded as high art in the
distant future, because immense amounts of preparation, lighting, setting, and
skill goes into making them. Almost anything that's in one is in it for a
reason. Look at it and ask, "Why did they choose this? What are they trying to
say/portray? Why this background/environment with that sort of clothing?" It's
not instant gratification on the last one, but soon you start seeing the
patterns. It's kind of beautifully awesome when you do.

~~~
roel_v
"Study the color wheel, read analyses of ways to use it."

Do you have any specific resources or tips on how this relates to clothing?
I've done this, and tried to argue my case in color choices based on this, but
generally I've been laughed at when I bring this up. (probably because other
factors also come into play and I'm about as blind as a mole when it comes to
choosing colors).

~~~
lionhearted
I've used it to pick out shirts with suits. I've picked out scarves based on
my jackets. You can go monochromatic (shades of all one color) or you can do
some cool three-color looks at the... points on the wheel? (sorry, I'm not so
versed in the terminology)

We're talking about art here more than science, so there's no breakthrough
right answer like in mathematics. My experience is that I'm more savvy and I
start to notice the patterns, but my skill level isn't high enough that I can
lecture on the topic intelligently. It's like, after doing all this stuff I
have intuitions when shopping for clothing and dressing, and I tend to get
complimented on what I wear, which didn't happen before I studied.

I hate vague answers like that - I wish I could give you something more
concrete. It's not the "oh you just have to figure it out" whimsical idealism,
it's that I lack the skill to give a more cohesive and concrete explanation...
apologies for that. If you know anyone who is an excellent photographer or
painter, and is also good at explaining things analytical, they might be able
to provide more answers.

------
mantas
Been there, had most of those (and many other similar) situations..

The worst customer experience... Once a guy called me and asked for a quote. I
told I prefer hourly rate * hours worked and explained why it's better for
him. He called me crazy and insisted on fixed quote, although he wasn't even
sure what he exactly wants. I did fast calculation in my mind and gave him a
rough quote. I was bargaining at that time and quote was really very low. Then
client did a fast calculation on his end and was lecturing me for ~ 45 minutes
that I'm ridiculously expensive and I won't have any clients unless I lower my
prices 3x and how dare I charge average monthly salary (for probably 2+ months
work...) if I never went to university and so on..

Fast forward 1.5 years - I charge 4x more than in those days and I'm fully
booked...

~~~
detst
So is it time to go 5-6x?

~~~
maxer
the cheaper your hourly rate is, the less that people respect you, simple.

if your not told your expensive on a monthly basis your too cheap

~~~
detst
Hmm. Not sure if I was interpreted as saying something different (considering
you have 3x the upvotes) but I agree.

If I wasn't clear, I was saying: if you're fully booked and charging 4x what
you were once told is too much, are you considering increasing your rate? In
general, I would say you should but I was interesting in hearing this person's
thoughts.

------
noonespecial
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.

~~~
trotsky
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 incompetence without a lot of
redress.

Imagine if you were buying a hamburger and they told you that because they
burned the first one you're going to have to pay double.

The hard bargaining can go both ways too. I've included what I considered
ridiculous rates in a first draft of a proposal (to give me room to negotiate)
only to have them often accepted without a blink. In fact, I'm quite sure not
having a standard rate card has been responsible for hundreds of thousands of
extra money over the years.

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.

If you have a contract where's the after the fact negotiation come from
anyway? Are they really willing to say then sue me?

~~~
kls
_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 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.

~~~
tocomment
That's pretty smart.

~~~
kls
Well I don't know about smart, but it is practical. The problem with our
profession and the reason the video while comical is not accurate. We get
compared to other professionals a lot, like doctors or lawyers but the problem
is unlike doctors or lawyers, each new job we do, is like performing a
completely new procedure.

I mean if the doctor overruns putting your new liver in, it is by a few hours
at most. The economies of scale are way out of whack to make those kind of
comparisons. What other professional, in generally do is a reproduces group of
processes.

Our profession is unique in the fact that while there are similarities in what
we do, each new project is wholly different (if you are doing custom apps).
Now we do have stuff like Wordpress that make the simple stuff cookie cutter
but for the most part people are not looking for that when they hire a custom
software developer. They are looking for a new and novel product. The problem
is that it is one of the only professions where product development is
purchased from small and unsophisticated buyers.

We really are a unique profession in which our product is still crafted and
not manufactured. The problem is as a society we have gotten used to
everything being manufactured so the expectation is that building software is
akin to manufacturing where the reality is it is more akin to an art and just
like art, their are few really talented artist to go around.

Understanding, this goes a long way to helping customers see your value
without alienating them by becoming defensive. I read the horror stories about
bad clients all the time and sometimes wonder if it is a lack of educating the
customer. I have had maybe 2 or 3 really bad customers in my 20 years. I just
don't see how luck could produce those odds. I don't think I have a secret
sauce and I am sure I have turned a good deal away that would have been bad
customers, I just take time to understand their needs and to explain how
software development works. Usually, if someone does not feel like they are
getting screwed they are pretty agreeable.

If someone comes to me and says I have 50k to build X and X looks like 40K to
me, I will tell them I am not comfortable taking the gig, based on the fact if
it overruns they don't have the reserve to see it through and that I do not
want to leave a customer without a product at the end of 50k. They then either
tell me what they can burn to, which is usually far more than needed or we
both agree that they are putting their capital at risk. In which case, I try
to work with them to trim features to get it to a 25k product. Double the
estimate overruns are rare if one is even remotely decent at estimation.

~~~
vacri
"I mean if the doctor overruns putting your new liver in, it is by a few hours
at most."

Speaking as someone who went to get a new filling in June, went through
getting a root canal on another tooth, and finally will end up going under a
GA to get some more serious work done in a month or two, I can assure you that
doctors (well, dentists) do <i>not</i> charge on a fixed-symptom basis.

Even if you need to return to a doctor only to get a new copy of a script you
have already had, most doctors will charge you the consult time.

Given that you appear to suggest there is no art to medicine, it sounds like
you have no exposure to the medical world. Our profession isn't as unique as
you make it out to be.

~~~
michael_dorfman
* I can assure you that doctors (well, dentists) do <i>not</i> charge on a fixed-symptom basis.*

Interestingly, under the Medicare reimbursement system, that's pretty much
exactly how they are paid (if the patient is a Medicare patient).

~~~
vacri
Are you honestly saying that if you go to your local bulk-billing doctor with
a stubborn symptom that won't go away, necessitating multiple visits, that the
doctor will only ever be paid for the first consultation? That the rest are
all (metaphorically) 'bug-fixes that are included in the original fixed-price
spec'?

Ain't so. Doctors get paid for their time, Medicare just has the government
pay for it instead of the patient.

Also, dentists in particular are poorly covered by medicare here. I remember
as a student going to a dentist that was affiliated with my uni and having the
receptionist laugh when I pulled out my medicare card...

~~~
philwelch
You and michael_dorfman are probably talking past each other, on account of
being from different countries with different "Medicare" systems. The US,
Australia and Canada all have systems called "Medicare".

In the US, Medicare is only for old people, and it's uncommon for them to
attend university. Also, "uni" isn't a usual American colloquialism. So it
appears that michael_dorfman is talking about US Medicare, and you're probably
talking about Australian Medicare.

------
edw519
It's war, I tell ya!

The video should play the first 10 minutes and then display a dialog box
prompting for a credit card in order to update to "Premium" (which would just
make the dialog box go away).

The hairdresser should color her hair purple, but once she paid the bill, it
would magically turn blond at 3 a.m. via Microcolor Automatic Update.

The chef should electronically disable the steak-embedded Exlax dispenser once
the bill was paid in full.

oops, just in case... </sarcasm>

------
netcan
Funny. Now I want to see a comeback video from the clients' perspective.

Cutting edge meat, still some bugs being ironed out but totally worth it if
you avoid that whole beef mess. A weird disc with wires attaching it to a
projector that that you can put in the dvd player and it plays the projector
reels, sort of. When the hair's half cut, a grey hair is discovered. Now it's
on track to be finished by Christmas.

~~~
zmonkeyz
The gray hair scene would be funny :)

------
jwh
The video shows perfectly why unwritten/verbal/implied contracts are to be
avoided at all cost.

Against my better judgement I recently completed some work without a written
contract. It was exactly like the restaurant scene: they'd received the
services and used them but started questioning the bill (after it became
overdue).

I still find it strange that people view other people as a commodity like oil
or pork bellies yet they expect ridiculous returns, akin to a barrel of oil
spontaneously duplicating and selling itself for $300

~~~
billswift
I used to work for an architectural and landscape designer and builder. After
getting a judgement against him when a client took him to court, he quit using
written contracts and instead went to week-by-week meetings with clients and
billing on the same basis, so neither ran away with misunderstandings or too
great sunk costs. It worked pretty well for the next 25 years, until he
retired.

------
maxawaytoolong
This sort of negotiation is common for things like design, photography, video,
music, illustration and other creative assets. Based on the production values
I'm assuming the video comes from that world, rather than the programming
world.

~~~
steveklabnik
My designer buddy says "oh yeah, that's a really old designer thing."

You appear to be correct.

------
foresterh
Am I a rare contractor because I haven't had problems with people paying up?
Is that common in the software contracting world? Or is it the case (as it is
with most things in this world) that the people with problems also have the
loudest voice, or tend to make the most noise, so it seems to be an issue more
than it is?

~~~
mgkimsal
You may be rare, or haven't done much yet. I've been in software dev in some
capacity for about 17 years, and have been stiffed myself a couple of times,
and I've had companies I've worked for been stiffed too. In some cases it was
for a lot of money, in some cases very little. If it hasn't happened yet, it
probably will at some point. It's not guaranteed, but I don't think I know
anyone that's been at this for more than 5 years that hasn't had client
payment issues at some stage.

~~~
foresterh
True, I've only been doing contract for 2 years, and it's only been hourly.
Nobody's been late on the first (or any) monthly payment, so I've never had to
worry about it. I'm assuming the problem is more with project-based pay? Which
I'm afraid to take on (for these very reasons...)

~~~
mgkimsal
No. Hourly can still be problematic - you're just generally out _less_ than
you might be on a milestone-based project.

------
ecuzzillo
You can order a filet for a fairly predictable price, it will take a fairly
predictable amount of time, and it will fairly predictably make you happy.

Software, by and large, does not make people happy or do what they want nearly
as reliably as steak does, and so if I were them I would be much more finicky
about paying people to make it for me than I am about paying people to make me
steak.

And especially, software made to order has even lower mean and even higher
variance than most of the software that people use. And you don't know what
you're getting until you get it, at which point the incompetent software
vendor is demanding some ridiculously exorbitant sum for something it turned
out you didn't want anyway.

You personally may not suck at programming, but the majority of programmers
do, and so people are very justifiably unwilling to cough up the dough
programmers demand.

~~~
bmelton
The obvious counterpoint to that is that there is no give and take in the
preparation of a filet.

The success of a development project, or software implementation depends just
as much on involvement from the customer as it does for the developer or
provider.

In the enterprise, this means setting up a project consisting of stakeholders
from which you can gather information, get integration assistance, etc. In the
single-project bespoke software or web development arena, it's even more
important that the customer is able to provide good feedback, offer and direct
according to their vision, etc.

Back to the steak analogy, what would be the remediation for the customer
yelling "More salt! More salt!" and then refusing to pay when the final
product is too salty?

~~~
ecuzzillo
The remediation would be to leave the restaurant that lets customers demand
more salt, and get a job at a restaurant where salt is applied correctly and
customers can take it or leave it.

In other words, if you're good at programming, why are you in the custom
software business instead of something more scalable?

------
nowarninglabel
Yes, but as both a contractor and someone who hires contractors, I would say
the optimal approach for both developer and client would be to get a small
task done first then move from there. So, order the appetizer first, and if
it's good, then go for the main course. (Or even better, go out for salad, and
then come back next week for the main course if you didn't get food
poisoning.)

------
wh-uws
Link to original site

<http://www.vendorclientvideo.com/>

------
erikb
The difference, as I see it, is just that these people in the video really
fight for their right. The cook will let his fists talk, if they don't pay.
That dvd guy will never buy this dvd and so on. In the IT world there is the
problem that there are actually really many people that let themself beeing
enslaved and accept those situations. If 60% of the dvd shops would react
positively to bargaining, every client would try it. That is "just" the
situation w face in our business.

If you didn't see it, I can connect you to some companies. Work for them for
some months and you see that 90% of the coders there (contractors or
employers) effectively put themself in slavery.

Although not all software developers are like this, we all have to suffer from
the consequences of these acts of low selfevaluation.

------
andyidsinga
classic: "we'll do this this time but you need to show us how you did it so we
can do it in house"

------
invisible
The guys that made this seem to do a lot of "high-end" marketing, so I guess
it doesn't get much better with big clients (<http://www.scofieldedit.com/>).

Really neat video though!

------
piney
Companies who treat their vendors like this have a company culture that treats
them the same way. Its therefore OK to kick around other people, even easier
since they are behind a company's 'mask'.

------
jeffiel
Ha, this reminds me of the Microsoft vs. GM comparison from yesteryears. Cars
would crash unexpectedly, etc.

------
51Cards
I am up-voting just because I have lived each and every one of these at least
once.

------
exit
this would be a great way to spend fu money. pretend to be a small time
contractor and then absolutely destroy companies run by sleazy conniving
wheeler-dealers who try to short you.

------
franze
[video] better than i thought it would be

