Pricing and Scope of Work

After working in the online marketing world for almost 20 years I have gained some first hand knowledge about pricing and client behavior.

One, always price judiciously. Never let your price down to capture market. It is a bad bad strategy and a race to the bottom of the pyramid.

Many competitors will offer cut throat prices to capture the market. Unless you are a fortune 500 company who is targeting to capture a billion dollar user market for the future, there is no point in lowering your price point.

First, you will feel bad about not getting your dues for the work you have put in. Second, there are many people who will want to take advantage and squeeze the value for the last penny. You will have a hard time dealing with such people.

Always price your services fairly and lay out the scope of work in details. I can not emphasize this enough.

Fair price gives you the motivation to work through the project in time and scope of work will give your client a very fair idea of what to expect. As mentioned earlier there will be clients who want to take advantage and demand extra services for no cost. A detailed scope of work helps to mitigate such problems.

Never give in to unfair demands of the client. Once you do that there will be more demands. One who does not understand the meaning of FAIR, will always be demanding for more. Avoid such clients or point out the scope of work.

All this is first hand experience. Recently, I thought of capturing a new market and gave out flyers and hand bills. One person called me to say that he has seen my ad and want to take a service.

I priced the service far below the normal range just to test the markets. So the client was delighted. But then when I completed the first version, his complaints started. He wanted more features added without any extra cost.

It was the result of my poor planning in structuring the new service. I did not give much thought to pricing and scope of work that landed me in a soup!

Do not repeat the mistake I made. Always plan the pricing (which should be FAIR btw ) and scope of work in advance and then offer your services. Avoiding both of them is a disaster.

A word about the scope of work – it must be worded in such a way to include things that you will NOT DO. This is super important. If you do not include “will no do” things, there is always scope for the client to say that you did not mention earlier that you will not do such things.

Scope of work document should include the following –

  1. Broad outline of work.
  2. Time range of work
  3. Bulleted list of work to be done
  4. Bulleted list of work not to be done

Avoid ambiguity whenever possible. Such things lead to double meaning and option for the client to complain later. Always mention points clearly. Keep the advantage yourself.

Mention that any disputed work should be decided by things possible to be done at that point at extra cost.

Leave a Reply