Know-How Exchange : Advertising/PR

Anna,

The answer depends on why you are going over the initial estimate. If it's because your client asks you to do more work or makes changes to requirements that causes you more work to add in or change something you have already done, then you tell the client the impact in cost, and then you present them with a new estimate with the additional work tacked on and get them to sign off on it before you put the hours in. If you are going over because you can't tell how long something will take until you get into the project, then you let the client know what part you can predict and then agree you will update that estimate before incurring an "overage." If you are going over because you are a bad estimator, then se la vie! You eat it. It doesn't bring good will to your clients if you constantly bill more than the estimates. After a while, they think you are estimating low to get the job and then when they are "hooked," you give them the right cost. Think about it: If you have someone repairing your house and the guy says it will cost $7500 and you get the bill and it's $8250 instead, how are you going to react? Another thing - how much are you going to give back if you estimate 100 hours and it takes you less? 10 hours? 15 hours? If you do, good for you! If not, how's this fair?

Better yet, stay AWAY from hourly pricing! The hourly price has a negative psychological impact because I'm sure you charge $75 per hour or more. Traditional generation and some Baby Boomers will compare that to their thinking that $25 an hour is a lot. Charge based on the job. You can think in your own mind that you need $75 per hour and the job should take 100 hours, but give your client a cost of $7500. You may itemize it, if you think you need to - $500 for this, $2000 for that, $1800 for this, $1000 for that, $1200 for this, $300 for that, $700 for this. But don't talk about the time and don't report your time. This way if it takes you less time, you bid a fixed price, you get the rewards. Or if you're over your estimate, oh, well, learn from it and do better next time.

I hope this helps.

Wayde

Wayde's point is right on. I can't think of one good reason to base your billing on how much time it takes you ... and I can think of several reasons not to.

Billing by the hour sets up a situation where you have an incentive to be inefficient and to take too long to complete the job. The client won't want to spend much time briefing you or providing feedback (because every minute she spends with you is costing her money), and if you're really efficient and do a great job quickly you get punished (with a lower fee).

And what business is it of the client's how much money you make per hour? What the client wants is a result, not a peek at your checkbook.

As others have said- the reason is why. If your answer is you simply didn't understand how long something will take-- expect the client to bark.

If you document it with work done beyond scope of original project-- they can see the reason why. But you should be advising all along this project is taking an unexpected turn and will probably effect the invoice.

As far as the difference between 10 and 13 hours-- kind of splitting hairs isn't it. And as far as the initial estimate -- learn from this and underestimate and over deliver.

I support the bulk estimate/quotation on a bid. In addition to Wayde's (very valid) points I would prefer to think about the market value of our offering (with a managerial eye kept on costs). We are marketers after all - when did we ever agree that bottom-up pricing is a good idea for anything?!

As a matter of interest, years ago I was charged overs on a design job where it had not been made clear and I felt it was unfair. I did pay - but I never used that agency again.