
Ask HN: Pricing for tailored solutions - selmat
How to price customer for tailored solutions?<p>What is best pricing strategy from your experience? Per hours&#x2F;days&#x2F;line of code&#x2F;functions&#x2F;customer value&#x2F;quality etc.?<p>Story behind: they have software infrastructure and need middle-ware solution to overcome difficulties in communication between two systems and remove manual processing of repetitive administrative tasks. Raw data are exported in xml&#x2F;csv format, needs to be processed&#x2F;compared&#x2F;cleaned&#x2F;formatted and imported to another system.<p>Thanks
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chrisbennet
You want to price your work product based on Customer Value if you can. As a
businessman, you almost always want to sell _value_ , not hours worked. The
businesses you are selling to use the same metric.

The exception to this if you need to offset risk. If you have no idea how long
the project will take, you may want need use some arrangement that caps your
downside risk. Example: If the job involves Research and might not even be
solvable, no time estimate is going to be accurate. In that case, you would
want to work by the hour or something so if it takes longer than you think you
aren't working for free.

A couple of things businesses pay for are:

A) Relief from pain (make the problem go away)

B) Reduction of risk (fixed price)

"A" is obvious but I think many new freelancers/consultants ignore "B". If you
want to quote a fixed price, you absolutely need to price in a risk premium.
If you "normal" rate is $100hr, your "fixed priced" needs to be some multiple
of that, say $2-400hr.

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brudgers
The simplest method is time and materials. It integrates well with unfamiliar
clients, open ended requirements like "overcoming difficulties" and vague
boundaries like "administrative tasks" because it avoids disputation over
contract scope.

There are other methods related to perceived value. These have the potential
for greater upside and greater downside.

Good luck.

