How do I determine support rate if not previously negotiated?

Question

Last night, I provided support to a recent customer by setting up their small business's email address to be read within an email client. I had already done this on one of their devices as part of the contracted work (with the majority of the work being web design/development), and what I did last night was adding sending/receiving email capabilities to two more machines. Overall, the time spent doing this was one hour rounded.

Now, we don't have a formal contract for this kind of small support, but my customer asked me to send along the bill. As I see it, I have a few different options for how to approach the billing in this case (along with different lines of reason):

• Free: They were good customers, it would add goodwill (which isn't really needed at this point; they're happy with my work), and it could be considered as part of the original contracted work.
• Invoice for a percentage of my per-hour rate: I don't have any pricing models set up for a retainer rate or support work like this, and I didn't perform web design work. Therefore, how can I justifying charging the full rate to myself?
• Invoice for full per-hour rate: At the end of the day, I used time that I would be spending on another customer's work, and I shouldn't be selling myself short.

In a case such as this, what would be the best way to handle pricing for minor support issues that are possibly unrelated to the original work?

I would contend that this does not apply as a duplicate, since I did not contract the work out to a third party

Answer 1

I would bill for your full-price rate in this case.

Even though the work is unrelated, your discussion with the client about the task can be considered as an informal agreement. Since price was not mentioned during this discussion, it is assumed that the client is happy to pay the existing rate that you have negotiated in the past. If the client wanted to negotiate the price further, it would have been mentioned in discussion.

As an aside, I do sometimes do minor changes for free (< 30 min) for clients with whom I have a great relationship and charging them for the short amount of time is not worth the hassle. (If the client starts taking advantage of this, then I'll reconsider free work for them).

Answer 2

I would bill your full price, since this has not been agreed upon before and the client asked for your bill.

In this case, I think billing this hour full price establishes the price of your support for future support they might need. As you rightfully remark, you don't want to sell yourself short. If they are a good client and they are happy with your work, you can always give them another hour another time for free, which might be better appreciated because they have paid the full price once and know what they are getting.

If you do decide to give that hour for free, of course, do send the bill for XXX and then add "offered" at the end of the line, so they know the nature and amount of the gift...

Answer 3

Is this the first such task? Is he a really good client? If you are not in need of those 1 hour, give them that hour for free. The golder rule of the premium hotels is "no matter how rich you are, everyone likes a free champagne".

I do this for very good clients and they appreciate it. Just make sure they are aware of it.

One more consideration. If possible, try to predict if the client is not one of those who will bother you with "when will I get more free hours". If you suspect that, then charge him your regular hourly price. One good indicator of such client if that such clients often mention your hourly price and ask for discounts. For example, I clearly stated a client of mine that after we work together for 100 work hours, I will give him discounted price. After 20 or so work hours, he started asking me if he can already get the discounted price.

Answer 4

Full hourly rate is the way to go.

• It establishes you as a serious professional
• It trains your client to not expect freebies. This is something that has to be done early on in the relationship.
• It pays you what you're worth (did you have a dispute about this part??)

Answer 5

There are too many variables for us to be able to say what is correct for you: your relationship with the client, how many clients you have, the state of your cash flow, etc.

If you have set a fair (to both sides) price on the original work, you should be able to absorb the one hour if you choose to. This can create or enhance the goodwill you have built up with this client. Not only can this lead to more work from the client, but it can also lead to good word of mouth advertising from this client. This can be the most powerful form of advertising for you.

Do you have a marketing budget? How does this one hour of review compare to your other marketing expenses? Is this a reasonable trade-off for you?

In the end you need to know your client well enough to to identify whether they are likely to take advantage of you or like you more than they already do. If they are good client, you could get much more value out of this than the one billable hour.