Project pricing/client

[Shane Gee]

I am not sure if there is another thread talking about this topic, could not find one in a search.

 

But I wonder if anyone else has been experiencing your clients asking for work done at substantially lower prices.

 

I used to work in the UK now I am running a studio from South Africa with 90% of my clients in the UK. I was charging a slightly low fee than the UK based companies after the move, but now I have been asked to lower my costs substantially. I can drop them a bit but what some of the clients are asking for are getting too low.

 

Some of them are getting ridiculous, loads of design changes with really reduced fees.

 

My questions are:

How are the UK and US based viz company handling these economic times and I am sure fierce international competition.

Are you standing your ground on your quotes, or are you lower your quotes to get the jobs? Whenever I say I cannot go lower I get the response that they can get the images done cheaper in China, Eastern Europe...but how low can they go?

 

I have also had great discrepancies on quoting--- some clients say I am quoting too low others too high. One example is from the same architect firm but 2 different clients.

 

One client also sent me another companies quote by mistake and I was shocked at what this highly prominent UK company was charging. 8 times my quote.

 

My next question is if these large companies are charging that much I cannot see them surviving at their current size, some major downsizing is needed if they want to stay open.

 

I would love to talk actual numbers but not sure if this would be the right place.

I am very confused as there is such a discrepancy between projects, clients, companies. It is really difficult without industry standards, international competition, software regulations and the clients often cannot tell the difference between a good image and a poor one.

[ihabkal]

I am facing the same exact problem as you as I moved from the US to Lebanon (yuck!!!) 3 years ago. As if clients think less of you if you are in a third world country. But actually working with US clients is 1000000 times better than working for Lebanese clients, even if the price is lower. US clients e-mail nice comments, encourage you, say please and thank you, they show that they respect and appreciate you, while Lebanese clients are unappreciative of anything you do, they treat us like slaves, and act as if we do not do their work according to their slave like conditions (working for pennies over the weekend, during holidays, at night every night for the duration of the project), no one will hire us and we will starve, while in fact we strive better without them.

One thing I noticed, whenever a client asks you to lower your price there are two cases:

1- he is an old client you like working with, you lower the price and he gives you the job and says thank you,

2- he is a new client you never did work for, you lower your price and then you don't hear back, and then if you ask him why, he says the chinese are doing it cheaper. so you lower your price lower than the chinese and you know what happens? he thinks you were screwing with him when you asked for the original fees (while in fact he was screwing you by hassling you to lower your prices) and he loses respect for you and never ever hires you.

 

So the morale is never lower your price unless you like the person you work for and you have been working for him for a while, and you know he pays on time.

 

I received an e-mail from a certain Chinese firm, She said they do renderings for $250, I e-mailed her saying I am already doing renderings for $250 and can't afford to hire her, then the lady said that she would lower her price so it works for me.

 

Now that is what is screwing us.

 

now how can you afford equipment and software on $250/rendering??????

Edited February 10, 2009 by ihabkal

[casewolf]

now how can you afford equipment and software on $250/rendering??????

 

This is exactly the point. Just to tell you an example:

 

I attended College, University, got a an engineer, and Masters Degree and now even teach by myself at University (although I am not a professor). I spent many years of try and error, professionality and passion into design, architecture and IT. Oh, and I got published twice in the 3DS-MAX Bible:

The result is experience, the ability to work in scheduled deadlines with an appropriate quality - it took more than 10 years of my life and many thousands of dollars.

 

Above that I bought software for over 20.000$ (for one workstation!), loads of hardware, laser printer, stuff, etc. for another 10.000$.

 

HOW dare a customer or potential client say that we (the CG artists) are too expensive when we calculate our cost with the result f.i. of 5 days work for lets say 2.500$ ??? Have they ever been to a lawyer or in a medical practice? Don't they know what 'so called' consultant companies get? They get more than 2.500$ - A DAY. And most of us don't intend to become rich!? We are doing our jobs because we love them.

 

If customers think they can get everything for any price they ruin the working basis our society runs on - on the long term. I am not intending to blame chinese or indian people, I am even (sometimes forced to, sometimes pleased to) working with them. BUT: Let me tell you, many of those 250$ per image guys/girls never saw any real architecture school, bought any software licence or paid for any office rent. And, believe me, I know what I am talking about, this shows.

 

Let those customers go - don't spend time with negotiating about 50 bucks more or less, this is embarrassing.

[ihabkal]

Let those customers go - don't spend time with negotiating about 50 bucks more or less, this is embarrassing.

 

Quoted in agreement.

I am also not against anyone, we all need to make a living, but I am against sweat shops. I am also against fireworks factories employing minors.

[Shane Gee]

I have always had people asking for ridiculous prices and I tend to give them a miss but what I am really asking is are you seeing your regular clients asking for discounts on quotes? or a much lower rate?

 

This year I have had 3 consistent clients over the last 5 years ask for big discounts and one was stupid money-- I just said no.

 

Now as I said my prices I think of middle market. Not top end and not low $250/per render. I think my quality is also middle market. So if these clients want that quality what and where are they getting those prices. I feel you get what you pay... for so do you think these clients are just taking a chance or is everyone else dropping the prices?

[ihabkal]

yes regular US clients are asking for as much as 50% discount, the ones that are not asking for a discount haven't sent work in months. Times are bad.

As for quality, in the Middle East there is no Middle. I understood the concept the first year I was here. there is a top (or he thinks he is) dog leading the pact, he can charge as high as he wants, all the other sheep like me need to charge slave wages just because we are not him, regardless if we do better work than him or not.

Our market is small, and clients are influenced more by reputation than actual value and quality of the work, unlike the US where there is the best (Neoscape, Spine3D, Dbox), middle (me and every humble person like me) and worst quality (I won't go there).

In Lebanon there is him, and then all of us little citizens. Quality doesn't make you known, political connections make you famous.

[smighty]

This is exactly the point. Just to tell you an example:

 

I attended College, University, got a an engineer, and Masters Degree and now even teach by myself at University (although I am not a professor). I spent many years of try and error, professionality and passion into design, architecture and IT. Oh, and I got published twice in the 3DS-MAX Bible:

The result is experience, the ability to work in scheduled deadlines with an appropriate quality - it took more than 10 years of my life and many thousands of dollars.

 

Above that I bought software for over 20.000$ (for one workstation!), loads of hardware, laser printer, stuff, etc. for another 10.000$.

 

HOW dare a customer or potential client say that we (the CG artists) are too expensive when we calculate our cost with the result f.i. of 5 days work for lets say 2.500$ ??? Have they ever been to a lawyer or in a medical practice? Don't they know what 'so called' consultant companies get? They get more than 2.500$ - A DAY. And most of us don't intend to become rich!? We are doing our jobs because we love them.

 

If customers think they can get everything for any price they ruin the working basis our society runs on - on the long term. I am not intending to blame chinese or indian people, I am even (sometimes forced to, sometimes pleased to) working with them. BUT: Let me tell you, many of those 250$ per image guys/girls never saw any real architecture school, bought any software licence or paid for any office rent. And, believe me, I know what I am talking about, this shows.

 

Let those customers go - don't spend time with negotiating about 50 bucks more or less, this is embarrassing.

 

 

 

Generally you´re right, we love our jobs but we also sell our working time---and we have so sell our time for reasonable rates!

Getting rich is not the point, but it should be possible to make a quite good living doing something specialized like arch viz.

A reasonable daily rate is fundamental.....if you get paid like a secretary or cashier i would look for an other job----and do 3d in the freetime as a hobby.

 

Let those customers go!--yes that s the way to go!---

If you have to lower your prices that you have the same hourly rate like " a normal office job" this customer is the wrong customer--and of course there are a lot of wrong customers- in any country-like in any other industry i guess.

[JonRashid]

Don't get disheartened stick to your pricing. You will end up losing money otherwise. I have had a number of clients over the years go quiet for awhile knowing they were trying somebody else out. In all cases they have returned. In the UK I think people are getting wise to the false economy of sending work abroad ans recently I have picked up jobs that were being sent to India. Once they have got over the language barriers and invariably the lack of ability to speak with the guy who is actually doing the job I often work out cheaper. They rarely cost their own time adminstrating the job into the equation until it bites them. I dont alter my rate from £250 a day. If they want a cheaper job I spend less time on it. I know it's hard to turn work down at the start but trust me it's worth it in the long run. Just be polite and say your ready to pick up the pieces if they are disatisfied with the work they are getting.

[casewolf]

There should be an unofficial agreement among professional CG-Artists not to perform dumping for the sake of getting pitiful contracts.

 

What we do is not (only) art, but at first its a lot of IT and engineering as well (at least in the design and Arch-Sector). Everybody who is doing that kind of job at least with a minimum idea of quality must not take 15$ an hour, not even 30$. This is a 60+$ Job-Area and if people think they make it cheaper - let them do. They will fail on the long term.

 

They will get their problems later, with sustainability, project backups, their pension, health-care, etc. You have to build up reserves, you cannot spend all your money you get, remember! Don't eat up the community!

[ikinman]

To address some points:

 

1. During any economic downturn, plenty of clients are going to go fishing to find out if there is anyone desperate enough out there to charge substantially less than what was before some sort of going rate. We have definitely received a substantial increase in the number of those types of inquiries. Don’t take it personally – it’s what happens when both supply and demand fall – there’s less price information around. The classic example is what happens with housing prices during an economic contraction.

 

2. Getting upset with clients about them not wanting to contract with you and pay what you want to charge is a waste of time. One might as well get upset with rain on a prior sunny day. Clients are under no obligation to hire you – just because you spent a certain sum of money on equipment and software doesn’t mean that they are required to pay higher prices for your services. Of course it’s a two-way street – if a client wants to pay you a pittance, or some price you don’t want to work for, then you are under no obligation to work for them.

 

3. If you think that the pricing of imagery in your market is opaque, meaning that you feel that clients out there are getting ‘ripped off’ by overpaying for your competitors’ work when you can charge less for the same service, then your course of action isn’t to complain about it, but take advantage of it. That doesn’t sound at all like a problem, it sounds like a grand opportunity. Let those clients know that you do the same work for less. Everyone’s price-conscious; I’ll guarantee that they will come running, if you can show them that you offer the same quality of work, and (very important) the same quality of customer service.

 

4. ‘Middle Market’ is generally not a place you want to be in a recession. You need to offer something that is excellent: Quality, Service, Price. Don’t think in terms of average – no one will hire you.

 

5. Look up the definition of ‘sunk costs.’ Having spent a bunch of time and money learning a skill or buying equipment is no guarantee for anything. Just ask the makers of buggy whips.

 

-Ian

[casewolf]

Ian, I agree with you 100% in every point!

[REDVERTEX]

Lot's of talks, but nobody telling the real truth.

The market is in collapse.

 

quote a client that has a 10 000 pounds bad dept to me:

 

"These are tough, tough times, the worst that I can remember. In England the economy is a disaster"

 

It's the same in UAE, EU, Eastern Europe.

Rules are changed, fees are changed.

TV reality - SURVIVOUR is comming

 

Everybody knows that the prices are 20-30% down.

It's normal, this is market.

The only right thing is to offer better quality, good communication and flexible fees.

 

Bad, bad feeling .. but it's true.

 

Most of the people talking as freelancers. It you are running a company of 5-10-100 artist, then you know the responsibility for the regular salaries.

[ikinman]

Yes, I do know that we are all going to die. But rather than running around hoarding gasoline and antibiotics to deal with the coming mutant wars, it would behoove us to act more rationally about what to do in situations like this.

 

It's certainly the worst I've every seen. And as a result I have shrunk the number of employees we have(I started doing that a year ago when I saw the writing on the wall.) I moved to a smaller office, and have otherwise worked to reduce expenses and overhead.

 

On the income side, I need to learn to deal with less of it. That goes without saying. But consider what you are offering to your clients - the contracts of banging out an image for several grand every time someone calls are going to be fewer and farther between. Focus on how you can help your clients with your services. They're cutting staff, too - which means that they may need services that you haven't offered yet. CAD work, marketing work for them, multimedia work. Think about what you know and what you specialize in, and find out if they need something that you can offer.

 

Actually, ask them directly. Call up your top ten clients, tell them you know how things suck (they'll probably have the time on their hands to talk to you) and find out what they need doing. Maybe they need to update some renderings in their portfolio. Maybe they need help in updating their website. Maybe they need 3D modeling done.

 

Above all, offer what your competitors can't offer your top ten clients, which is awesome customer service. Focus on them, and give them the white glove treatment. Find out what they need today (not what they needed yesterday) and figure out how to give it to them.

[EddieLeon]

Lot's of talks, but nobody telling the real truth. The market is in collapse....The only right thing is to offer better quality, good communication and flexible fees....

 

This is very true. In many cases the clients are not asking for lower fees because they want to cheat us. It's because they have very little money to work with. So, if you want to maintain the relationships and hope for better days then lower the fees a little and also try to lower your own costs.

 

For those of you that would rather hold your ground and just tell clients no, then I think you are making a very big mistake because you will be serving them on a silver platter to your competitors. I find myself fighting tooth and nail almost every day now to win contracts for our company.

 

We recently almost lost a bid against a very large overseas competitor. We didn't take no for an answer. So, we lowered our fees a little and made the overall package very "value conscious" for the client. The client felt more comfortable with the close support and quality that we offered so they changed their minds and we won the bid back.

 

Here's another example, just today a client wanted us to do 6 renderings for a fee that we would normally charge for 4. We said the rate was to low for us, but we were willing to drop our rate a little if they could raise their budget for all 6. The client agreed, so now we are both happy.

 

It's too easy for us to say no, but it's almost easier for the clients to find someone else to say yes. Take my advice. Get creative and don't let anything slip away.

[TheAllusionisst]

I won't get into the debate on lowering fees or not, I would just say that you shouldn't panic if a client ask if you will lower your fees, it is just business, they are kind of obliged to ask, especially during hard times. You may still be the cheapest they have talked to, they could just be checking to see if they can get even a lower price.

 

If you believe you shouldn't work for slave wages you can explain your opinion or something along the lines that you already think you are offering a superior level of quality to price ratio..........

 

If you believe you should do whatever it takes to get the job in these hard times, I would try to cover your butt (We respect and like working for you and are willing to sacrafice profit to maintain the relationship during the credit crunch..........) for when the market picks up again so that they don't think you are gouging them when you ask for more.

 

My point is that I wouldn't panic when the question arised, be prepared for it and answer as you see fit, I have been sent the competitions proposal either by mistake or by naive underlings in the past and at times have been lower than the competition and yet the client was asking if we could sharpen our pencils? It is just business, don't take it personal.

Edited February 10, 2009 by Russell L. Thomas

[ihabkal]

Thanks everyone, a lot of good points form everyone here. A lot of insights...

[Shane Gee]

Thanks for all the comments, quite a diversity of opinions though. I feel I should try and accommodate my long term clients and see if we can agree on a suitable fee. But for the chancers out there I will stick to a reasonable rate.

[Mat@MDI-Digital]

its dangerous to lower costs...Once its done its going to be very hard to go back.

 

Over the last 8 or so years Iv been working for the residential market the prices have only ever been going down.

[Limbus]

IWhenever I say I cannot go lower I get the response that they can get the images done cheaper in China, Eastern Europe...but how low can they go?

 

A skillfull CG Artist in China gets 300$ a month. There is no way in hell you can be cheaper than him. If they want to got to china or elswhere, they also need to handle the cultural differences and the language problem. This does cost a lot of time and money so in the end it is still cheaper but not that much.

 

I would offer old clients a small price reduction, maybe 5% to 10% but only if they ask. Fact is that we all have to adopt to the difficult economy.

 

I also would not work for clients that only want to pay a very small price. It is not worth it. Those clients are in my experience the worst pain in the a** you can think of. Send them away and feel better instantly ;-)

 

Cheers, Florian

[SandmanNinja]

I've just started telling people that make inquiries for my services that I would consider a small discount if they feel they can offer me work on a semi-regular basis in the future.

 

I feel it shows that I'm not completely inflexable and that I'm looking for long-term business clients. I also use the words "consider" and "small".

 

Is it giving in or selling myself out?

I don't think it is. I know these are tough times and (hopefully) the people I talk to realise that I am recognising the depressed economy and am trying to do my part.

 

Man, if I could just get 2 or 3 more solid clients that shoot business to me on a monthly basis, I'd be alright.

[casewolf]

A skillfull CG Artist in China gets 300$ a month. There is no way in hell you can be cheaper than him. If they want to got to china or elswhere, they also need to handle the cultural differences and the language problem. This does cost a lot of time and money so in the end it is still cheaper but not that much.

 

I would offer old clients a small price reduction, maybe 5% to 10% but only if they ask. Fact is that we all have to adopt to the difficult economy.

 

I also would not work for clients that only want to pay a very small price. It is not worth it. Those clients are in my experience the worst pain in the a** you can think of. Send them away and feel better instantly ;-)

 

Cheers, Florian

 

 

THAT is the point, 100% agreement, every word, mate.

 

I think there are 2 types of discussion being mixed up here. The american guys are perfectly right about what they are talking about. And we all know the crisis hits all of us, our customers and everybody around. Service is always a way out and being competitive is another way. This is all right.

 

BUT: There is no way in competing against dumping. You simply cannot let yourself become a 'whore, that does it for 300'. This is ridiculous and has nothing to do with customer service or competition. This ruins a market.

 

There are limits for everything, I am not talking about cutting fees for painfull 25%. I am talking about cutting fees TO 25%. If this is what the market is going to be - at least for me - I got less stressful things to do for more money.

[BVI]

Thanks for all the comments, quite a diversity of opinions though. I feel I should try and accommodate my long term clients and see if we can agree on a suitable fee. But for the chancers out there I will stick to a reasonable rate.

 

Hey GEES, that's just the nature of the beast over here in SA. Don't feel too bad, I know several international companies who resell our work for 8-10 times what they paid for it, but as long as we get our asking fee (or there-about) im fine with that.

[ihabkal]

I've just started telling people that make inquiries for my services that I would consider a small discount if they feel they can offer me work on a semi-regular basis in the future.

 

I feel it shows that I'm not completely inflexable and that I'm looking for long-term business clients. I also use the words "consider" and "small".

 

Is it giving in or selling myself out?

I don't think it is. I know these are tough times and (hopefully) the people I talk to realise that I am recognising the depressed economy and am trying to do my part.

 

Man, if I could just get 2 or 3 more solid clients that shoot business to me on a monthly basis, I'd be alright.

 

 

that doesn't work IMHO. clients would still think you are taking advantage of them if they know you have two pricing schemes, one for regulars and one for single visit clients.

Clients usually ask for a discount saying they will come back with more work later on, but they hate it if you make the offer because deep inside their head, they are thinking your original higher price was you trying to take advantage of them. But usually it is an empty promise when they say they will come back or become regulars, as even if they like your work, they will jump to another and ask him for a discount promising they will come back to him, and so on...And if they ever hire you again, you are stuck with the low pricing becuase you accepted to do work for less the first time.

They will also think you don't have work to do and you are not busy so you are incompetent and not worth your asking price, or that you are an amateur who prices differently every time, and if they do hire you to do a job with this thinking of theirs, they will treat you as if your life depends on them because you gave them the idea that you need their regular support.

 

I am finding out, now that I am 33, that everything is about power, if you give them power, they WILL walk all over you. they only need a word from you that shows you need them and not the opposite. I am sad because I cannot change my friendly nature, someday I will learn to stand up for myself.

honestly, my wife said to me last week that I am a dying breed, and that nice people are becoming extinct.

[SandmanNinja]

It just seems each time I quote something that I think is reasonable, with absolutely no flexibility, I never hear from the client again.

 

It's very frustrating.

 

Has anyone every considered a 3D-ArchViz professional association that is based on global regions? Like, a USA chapter, an Australian chapter, etc?

 

I say regionally because the value/price/cost seems to vary wildly depending upon where you live.

 

Participating members would have a logo they can display, and a link on their website.

 

The link goes to the Association's website and has the various values/mottos/standards/etc.

 

Each region would get together (online, an actual in-person conference? wow - that would be incredible) and they hammer out some sort of standardised pricing plan. Each member therefore has the 'burdon' of worrying what the other guy in the next state over is charging and "am I charging enough/too much?" removed.

 

The 'risk' is a non-member would undercharge us, but I think if I had a choice of going with a 'accreditised' member of a national/international organisation with a kick-butt portfolio over a single guy that does not have a collective pool of talented co-members to draw on their knowledge, etc - I'd go with the person that seems more professional. And if I ran a quote by one member, then e-mailed another member and got the same quote, then I would KNOW that there is a standardised pricing system in place.

 

I started something like this with people that do Virtual Reality photography in Australia. It only worked for 2 years, but that's mainly because most of the members dropped out of the VR work altogether.

 

Just an idea. I feel frustrated.

[innerdream]

It just seems each time I quote something that I think is reasonable, with absolutely no flexibility, I never hear from the client again.

 

It's very frustrating.

 

Has anyone every considered a 3D-ArchViz professional association that is based on global regions? Like, a USA chapter, an Australian chapter, etc?

 

I say regionally because the value/price/cost seems to vary wildly depending upon where you live.

 

Participating members would have a logo they can display, and a link on their website.

 

The link goes to the Association's website and has the various values/mottos/standards/etc.

 

Each region would get together (online, an actual in-person conference? wow - that would be incredible) and they hammer out some sort of standardised pricing plan. Each member therefore has the 'burdon' of worrying what the other guy in the next state over is charging and "am I charging enough/too much?" removed.

 

The 'risk' is a non-member would undercharge us, but I think if I had a choice of going with a 'accreditised' member of a national/international organisation with a kick-butt portfolio over a single guy that does not have a collective pool of talented co-members to draw on their knowledge, etc - I'd go with the person that seems more professional. And if I ran a quote by one member, then e-mailed another member and got the same quote, then I would KNOW that there is a standardised pricing system in place.

 

I started something like this with people that do Virtual Reality photography in Australia. It only worked for 2 years, but that's mainly because most of the members dropped out of the VR work altogether.

 

Just an idea. I feel frustrated.

 

That will never happen. Architects will seek out ways to maximize profits.

I think your best bet is to target other industries, film, TV, Video Games, Web etc. In my 30 years in the Architecture profession things have only moved in one direction and that is less money for more work.

Edited February 11, 2009 by innerdream