A Very Informal Survey: What Would You Charge?
The owner of a software company calls me, needing an ad for a trade show. Full page tabloid, color. I partner with my graphic designer, and between the two of us we do research on the market, competitors, etc. We spent about 20 hours, which included speaking to the owner on the phone for about 4 hours. Create an ad using stock photography and a screen capture from his website. (Yet it still looked good.) Copy takes about 1/3 page. We do this in about a week, from initial phone call to delivery. Client is excited about the ad, talks about other pubs where he's like to run it. Then he gets our bill: $4,000. Pitches a fit! Claims we are gouging him, claims that we shouldn't charge for phone calls, research, etc. Claims we didn't even need to do research on the competition or the market, since he is the expert and market leader.
What do you think? Was it a fair price? Should we call the pub and cancel the ad?
What do you think? Was it a fair price? Should we call the pub and cancel the ad?
Replies to This Discussion
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Permalink Reply by Smitty on
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Pamela,
That's completely reasonable. GOSH for 20 hours worth of work!! That's only $200/hr divided by 2 people on the project!! Ummm that's only $100 pp?? IMO, you didn't charge ENOUGH!! My question though is, why didn't you get a deposit up front? I don't even touch a project unless I get a 50% up front fee, and then on top of that if the client walks I have a 25% kill fee in case they walk or "pitch a fit" LOL!! I feel AWFUL that happened. I would NEVER work on something without it being under contract first. What happens if this guy doesn't pay?
I'm guessing he's in shock because there wasn't a contract first, so he had no idea he was getting hit with a $4000 REASONABLE charge.
Totally reasonable. Probably a great ad too from what you've described.
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Permalink Reply by Brian Schwartz on
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It doesn't matter if it was a fair price. What matters is the client's perception of your price.
I think it's essential to get the cost structure out of the way up front. That way there
are no surprises, and you can focus on what's really important - the creative.
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Oh, and the more I think of this charging for research and phone calls is standard in the total bill. You can't sit there every time the phone rings and give free advice away. I always do a competitive analysis. The clients think they know everything about their market, but I find they are always to close to their own businesses to be objective. I think the only thing that may have been your downfall was not getting the cost covered up front and letting him know EXACTLY what you were doing for the $4000.
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Permalink Reply by Bill Green on
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I feel for you, but like everyone said, discuss fees up front avoids this mess. Too late now but maybe to sooth the savage beast, get some comparable figures and go back to him so that he could at least see where the average falls. If you call the pub to cancel, then you're doing it as a matter of principle because he likely won't pay you, and you'll still be out your money.
As for fair or not fair? Seems very reasonable. The $100 per person net rate is definitely below typical hourly agency rates.
Although, based on his reaction, why do I think when asked what the budget was up front he would have said $250.
;-p
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Permalink Reply by TJSwafford on -
Cash/ Money/Contractual Agreement - up front - ALWAYS...
...a bajillion prostitutes, across the epochs of time, CAN'T be wrong can they? Its not the oldest, most successful business model for any other reason than that...is it?
Be specific about EVERYTHING that the client wants and expects from his/her money. I mean... I pay for a "rusty trombone"...I better not see an old blues player resembling Scatman Crothers coming through the door carrying a music case...know what I mean?
Its up to you to describe what you're going to do for/with/because/instead of them in great detail...I mean if you're going to charge them for each square of 2-ply toilet paper you're going to use while working on their project...you need to tell them that...IN WRITING on a piece of paper that THEY sign and date (Lawyers love that kind of shit and it excites them like a Dachshund and a sexy throw pillow during a dinner party)...then you separate the 2-ply into two rolls and charge them for the one 2-ply roll roll.... that and stay away from the nearest Taco Bell to eliminate the inevitable overhead for both of you. Simple Economics.
Ambiguity is A-L-W-A-Y-S BAD.
Can you imagine... E is equal to mass times the speed of light...MAYBE cubed or squared?
Where would mankind be with that mindset?
I want it...
you have it...
Like the ever popular Monty Hall always said, "Lets make a deal"
Crystal and Clear.
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Permalink Reply by Sunny Cervantes on -
Did you discuss the costs first and the work that would go with it? Before embarking on a project, both parties should agree first to the work coverage and the fees to be paid for it.
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Permalink Reply by Simon Court on -
Signed Estimates. Until I get a signed estimate and in some cases a Purchase Order work stops. On most jobs we will bring in a strategy planner for research and to create the comms plan which we derive the creative brief, this rtacks up the price, but the client is made aware prior.
I think this could be one of those where you cut your loses and chalk it up... Or, break it down like someone said above to the $$ rate per hour per person and what you did. Good luck with whatever you decide to do!
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Permalink Reply by Jim Powell on
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You probably have all the advice you need really, including the usual get money up front and an agreement on $ per hour plus art working etc..But we know life isnt always like that right - client needs job pronto s/he doesn't return calls or e-mails and the clocks ticking.
They'll be good for a few dollars and I am not going to stiff them - they are the market leader he'll know how to buy creativity, right!
Pragmatic / text book answers as outlined already inpart - negotiate, explain, talk about potential ROI give them another 30 days to pay etc - play uspset etc.
Maverick - tell him "you'd like to pull the ad in all fairness, and retain the work - it's no biggie at least this way we can both remain friends". Explain that "you we probbaly sell the concept to one of the companies challenging their company for the #1 position in the market, they may even pay a tad more who know." Just keep re-assuring him "not to worry about it, we made a mistake by not being clear about protocol and costs etc", so "it's our problem to solve, maybe next time we will get to work together".
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Permalink Reply by Eugen Suman on
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whoa, 4000 for a full page ad :) here it's 500 tops (if you're darn lucky)
aside that, it all seems reasonable, seeing your market, the research etc etc. you should have given him a cost estimate though, I'm surprised he didn't ask for one. And a market leader to stumble from 4k? weird. good luck in getting payed.
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