What concessions could I make for a client who's getting stressed about their budget?

Question

I have a client I've been working with for a few months and the job has paid well. I've been working at an hourly rate and the development has been very incremental. At all times I've been completely transparent about the hours I've spent on the job, what I've achieved and I've invoiced weekly. There has never been talk of an overall budget.

The client has now started complaining about how expensive the project has been and is asking me to reduce my rates for bugfixes.

I don't intend to reduce my rate, but I would like to make some kind of concessions for him as he's been a long-term customer.

Any ideas?

Answer 1

I really welcome your approach of listening to the customer and wanting to keep what has been a really good customer! Just saying 'don't lower your rates' is not a very helpful approach. It's been my motto as a freelancer to try and save my clients money for years and it's paid very well :)

Some ideas:

1. What you can reduce, without lowering your rates, is the time you spend on the project. Instead of ad-hoc work, collect enough bugs throughout the week and then spend 1 or 2 days of focused work.

2. Cap the budget and help the client prioritise which bugs to fix. Or if the trust is there, you prioritise the bugs that are important. Then say 'I've fixed x,y,z and we've reached the budget cap. Do you want to spend 1/2 day extra this week or keep the bugs until next week? In my experience, they will often spend the extra money anyway.

All of this shows you care and are listening to your client's concerns. That is all that matters. This is where you build trust and create a really deep,long-lasting relationship. And you may find that they will continue to pay you the same amount as before.

Good luck & let us know how it goes!

Answer 2

There really aren't any concessions to make. You're hourly, and that arrangement makes it okay (sort of) that the client can alter the requirements at-will because you still get something out of it no matter hat. It's sounding like this client didn't do the homework and NOW is trying to retrofit the project into a fixed budget -- but that's not your problem.

If they're asking for concessions at this point, essentially they're asking for free work based on their own bad planning. I say if you give 'em an inch, they'll come back next week and ask for two. The project is in trouble because (a) the money's running out and (b) if the requirements were tighter, you probably wouldn't have so many bug fixes. Bug-fixes is a PREDICTABLE part of the software development life cycle, so your work isn't costing them anything out of the ordinary.

Stand your ground on your rate for as long as you can. Let them hire somebody cheap to do the bug fixes, and you move on to a client that's a bit more savvy.

Answer 3

The request is unreasonable on the part of the customer. In fact bug fixing often costs much more, and bug fixers usually get paid more than initial builds, because it is often difficult to find and fix sometimes very complex problems.

Your rates are your rates, you have done nothing wrong, you should not lower your rates.

The pleading of poverty on the part of the customer might be true, might not be true, this is simply not your problem.

The only thing I would say though, is a soon as this type of flag is raised in your mind you should start looking for another customer to replace this one.

If you have no other work, you might consider reducing your prices to secure short term work while you search for other work. Or have a frank discussion with him. What is the end goal, what do you need to get there, what is the overall budget left? Perhaps you can change this to a fixed price project and finish it for him. But he is not your friend, however 'nice' your relationship has been, and I would advise against this.

I think of this as money for my childrens clothes and food. How much clothing or food does he want your children to go without exactly? And for what? I bet it is not a charity providing water to drought victims or similarly good cause is it? And with the money he saves, what is he going to do with it? Feed and clothe his own children perhaps? Or make the next installment on his car?

Answer 4

I assume you have a signed contract? It is for him to tell you what he wants/expects from you, so then you can decide whether you're willing to write an addendum. It's rather difficult to know for sure without knowing more about the nature of this contract and the ongoing work. Another possible answer is to identify specific deliverables and develop reasonable fixed-price contracts for each. You have to be careful, though, about wording, so you don't find yourself essentially working for free. Very best of luck to you. Please do not sell yourself short just because this client failed to plan well.

Answer 5

I believe the answers above pretty much sum up what I would write. To make another point I would communicate with fellow freelancers. If you find you can easily get another client and don't need to worry about the rates perhaps there's someone else who would do some work for a lower rate. On the one hand, this could keep you involved in the project (perhaps as an overseer), get you points from fellow freelancers who can't find work and your boss would see it as an effort on your part to help with the budget problem.

Answer 6

Thanks for all the input, this was my response (It's a Google Sheets Script, so not too mission critical):

Great question. It has been really interesting to explore this - I think there is definitely a blog post here!

Every software project is going to involve a degree of research and experimentation. We are bringing together a complex set of tools in a potentially infinite number of ways. We are designing and building a bespoke, custom product because an off the shelf solution does not already exist. Bugs (the software acting in an unexpected way) are an inevitable part of this process. The industry uses a R&D or “agile” approach to overcome this. For example I develop in small chunks, working with complete transparency through my journal and timesheet. Hopefully generating the trust that I have the skills to do the job and create something worth investing in.

So looking at our last couple of bugs:

• [Redacted]

Looking through our bugs (the ones with a red label) I can not see any that are due to “mistakes” (what I would call a coding error) made in the code.

So bugs can be due to:

• Coding error - This is what could be construed as a developer’s “mistake”, an error in the way the coding language is used or simply making a typo. Limitations on what the technology will let you do - Google Apps imposes various quotas on things like execution time
• How the technology is going to react in certain situations - the documentation may not describe our particular scenario and we have to try it out before we see how it actually works
• New features breaking an existing one - In a complex system a change in one area may have unpredictable effects elsewhere
• User Error - Making the code robust enough to cope with every user input has to be balanced against the time this would take, and if it would actually be possible. So the code may receive input that isn’t expected and act in an unwanted way.

I hope this helps explain how bug-fixing is an integral, equally valuable part of software development, along with designing, coding, testing etc.

Other things to keep in mind are:

• Quantifying the savings - compare the actual cost savings the automation continuously generates through reduced admin man-hours, against your investment in software development.
• Productising - there are a lot of industries that could find something like [Redacted] useful, so it could also be worth exploring productising it.

Yours,

Andrew