If people tried to pay for other services like they try to pay for programming

http://www.dump.com/2010/12/13/the-vendor-client-relationship-in-real-world-situations-video/

by dkasper • 16 years ago

503 123 16 years ago

Yes, but as both a contractor and someone who hires contractors, I would say the optimal approach for both developer and client would be to get a small task done first then move from there. So, order the appetizer first, and if it's good, then go for the main course. (Or even better, go out for salad, and then come back next week for the main course if you didn't get food poisoning.)

foresterh2• 16 years ago

Am I a rare contractor because I haven't had problems with people paying up? Is that common in the software contracting world? Or is it the case (as it is with most things in this world) that the people with problems also have the loudest voice, or tend to make the most noise, so it seems to be an issue more than it is?

mgkimsal2• 16 years ago

You may be rare, or haven't done much yet. I've been in software dev in some capacity for about 17 years, and have been stiffed myself a couple of times, and I've had companies I've worked for been stiffed too. In some cases it was for a lot of money, in some cases very little. If it hasn't happened yet, it probably will at some point. It's not guaranteed, but I don't think I know anyone that's been at this for more than 5 years that hasn't had client payment issues at some stage.

foresterh2• 16 years ago

True, I've only been doing contract for 2 years, and it's only been hourly. Nobody's been late on the first (or any) monthly payment, so I've never had to worry about it. I'm assuming the problem is more with project-based pay? Which I'm afraid to take on (for these very reasons...)

phamilton• 16 years ago

I recently had a problem with someone not paying. I finally said "I'm done." I took the software somewhere else (after consulting a lawyer) and sold it to another business doing the same thing. I had gotten half up front from the first guy, and sold it for full price to the next guy.

Granted, my particular circumstance was a little bit loose on the details of the contract, but it was within my rights to do so, and I got paid in full (plus the extra half up front) for the work I did.

noonespecial3• 16 years ago

There are two angles at play that got a little mixed together in the video. The first is the hard bargain during initial negotiations (ala the CD for much less) the second (and much uglier) is the restaurant, where after the work is done the client flat refuses to pay.

I'm fine with the former, you get what you pay for, the latter however, really makes me mad.

netcan3• 16 years ago

The in between one is the woman at the hairdresser.

Get past the point where negotiations usually happen and the deal appears done and your counterpart is committed, then bargain. We're used to it happening as consumers. There we call it bait & switch.

softbuilder• 16 years ago

The difference is that a CD is a commodity. People are not. Certainly there is a marketplace at work, but even if you do view programmers or designers as commoditized, no one wants to be treated that way. It's ugly behavior. (Although in my experience that is usually ignorance, not malice.)

eof• 16 years ago

CD?

daniel-cussen• 16 years ago

I'd be fine with being treated like a commodity as long as that commodity is a type of bullion.

I find that the term "commoditized" refers to goods or services that one, are all identical and b) are really, really cheap, like most commodities in the late 90s.

trotsky• 16 years ago

It does go both ways, though. I'm a software developer/consultant and am sympathetic to the video but lets look at from the other side.

Most pro level consulting teams work open ended time and materials contracts. There's very good reasons for this, but this definitely gets abused to deliver a project that was never expected to come in on budget. It also exposes the client to the effects of bad management or other incompetence without a lot of redress.

Imagine if you were buying a hamburger and they told you that because they burned the first one you're going to have to pay double.

The hard bargaining can go both ways too. I've included what I considered ridiculous rates in a first draft of a proposal (to give me room to negotiate) only to have them often accepted without a blink. In fact, I'm quite sure not having a standard rate card has been responsible for hundreds of thousands of extra money over the years.

It sounds to me like the creator of the video probably does fixed price bidding, at least in part. In my experience that's never a good idea or worth doing - even if you can manage it OK (extremely unlikely) you end up alienating the customer by having to be so anal about scope creep.

If you have a contract where's the after the fact negotiation come from anyway? Are they really willing to say then sue me?

kls4• 16 years ago

I whole heartily agree with your summation. Fixed price just sets it off on the wrong foot in the first place. What I generally do, is provide my best estimate of what the project will take. I also agree if the project runs past my estimate by 15% that I reduce my rate to my bottom dollar rate. This way I am not handing it out for free, but they understand that I am not trying to run up the clock as well. The other thing we agree on is that any feature creep pushes the estimate back by the size of the feature. I have found that this works well, gives the customer a comfort level, and though it is my rock bottom rate, I am not eating costs left and right for a project that goes bloody. It cost me opportunity costs but not hard out of pocket costs which are far harder to swallow.

angrycoder• 16 years ago

>Imagine if you were buying a hamburger and they told you that because they burned the first one you're going to have to pay double.

In my experience... The client orders a hamburger. You give them a hamburger. The client really wanted a hotdog and expects you to eat the cost of the hamburger.

Not a big deal in the real world, except in this example hamburgers cost tens of thousands of dollars.

sliverstorm• 16 years ago

I'm fine with the former, you get what you pay for, the latter however, really makes me mad.

Seriously. Even though I know it's all mocked up, every time the video cut to the restaurant my pulse started to rise.

jrockway2• 16 years ago

It's pretty stupid to let someone eat your product before you even check to see if they brought their wallet, isn't it.

run4yourlives• 16 years ago

If the latter is happening to you, you're doing it wrong.

25% retainer, equal installments of 25% at respective milestones. End of story.

51Cards• 16 years ago

I am up-voting just because I have lived each and every one of these at least once.

netcan3• 16 years ago

Funny. Now I want to see a comeback video from the clients' perspective.

Cutting edge meat, still some bugs being ironed out but totally worth it if you avoid that whole beef mess. A weird disc with wires attaching it to a projector that that you can put in the dvd player and it plays the projector reels, sort of. When the hair's half cut, a grey hair is discovered. Now it's on track to be finished by Christmas.

zmonkeyz• 16 years ago

The gray hair scene would be funny :)

maxawaytoolong• 16 years ago

This sort of negotiation is common for things like design, photography, video, music, illustration and other creative assets. Based on the production values I'm assuming the video comes from that world, rather than the programming world.

steveklabnik• 16 years ago

My designer buddy says "oh yeah, that's a really old designer thing."

You appear to be correct.

albemuth• 16 years ago

You're right, if it were about programming there would have to be a parody for file recovery and windows installs.

mantas• 16 years ago

Been there, had most of those (and many other similar) situations..

The worst customer experience... Once a guy called me and asked for a quote. I told I prefer hourly rate * hours worked and explained why it's better for him. He called me crazy and insisted on fixed quote, although he wasn't even sure what he exactly wants. I did fast calculation in my mind and gave him a rough quote. I was bargaining at that time and quote was really very low. Then client did a fast calculation on his end and was lecturing me for ~ 45 minutes that I'm ridiculously expensive and I won't have any clients unless I lower my prices 3x and how dare I charge average monthly salary (for probably 2+ months work...) if I never went to university and so on..

Fast forward 1.5 years - I charge 4x more than in those days and I'm fully booked...

detst2• 16 years ago

So is it time to go 5-6x?

maxer• 16 years ago

the cheaper your hourly rate is, the less that people respect you, simple.

if your not told your expensive on a monthly basis your too cheap

nfriedly• 16 years ago

Back when I was contracting, I knew it was time to raise my rates if I hadn't been told I was too expensive recently.

mkramlich• 16 years ago

After years of doing contracting, I've found a general pattern where the clients that wanted to the pay the very least, tended to cause me the most headaches, cause the most scope creep, be the most anal, etc. I also found that doing fixed fee contracts were the most likely to cause both sides problems. I also found another interesting pattern where the clients who treated me with the most skepticism or paranoia ended up being the ones who themselves were the most problematic or dishonest with me. Another pattern I've seen is that whichever side throws out a dollar figure first, almost always "loses" in the negotiations (meaning, gets a deal that is less beneficial to them in terms of dollar cost/income.) General trends, not without exceptions.

Also, there's no such thing as a single standard rate. Varies by skill set, by person, by project, by time/situation, by non-monetary factors (the strategic benefits or opportunity costs of doing a deal/project, etc.) So when someone asks me what's my rate, it signals to me that they are, at least somewhat, a newbie and/or unsophisticated (even if "experienced"). Instead, you tell me what you (think you) want. I tell you whether (I think) I can provide that. We go back and forth. Then somebody (hopefully the other guy) throws out a figure. The other accepts or counter-proposes a different figure/terms. Back and forth. Then shake/sign on something. Move on. Repeat.

axiom• 16 years ago

This is the difference between business-to-business versus buying consumer goods. You can't waste time negotiating with every client who buys a $50 pair of shoes from you - it's just not cost effective. So you have a fixed price for everyone. However you can (and should) negotiate with people buying $20k worth of services from you.

Historically, the consumer experience is actually the exception, not b2b. Up until fairly recently it was standard practice to haggle for everything you buy. It's only the rise of the middle class and of huge companies that sell goods/services to millions that brought about this new idea of fixed prices that aren't open to negotiation.

bmcleod• 16 years ago

Slightly related: In pretty much any store which has sales people that come and talk to you those people have the ability to knock 5-10% off if you ask for it. Cheap things aren't worth negotiating a lot for, but they certainly can be negotiated and the other side will quite happily make a small concession normally since it pays off in happy customers.

This is why always asking for a discount is worth it.

vacri5• 16 years ago

The medical equipment company I used to work for had a 5% discount that they built into every sale - people rarely paid full price, so sometimes just asking 'can you do better?' on high cost items will at least get you this "auto" discount.

patio11• 16 years ago

You can't waste time negotiating with every client who buys a $50 pair of shoes from you - it's just not cost effective.

This is where price discrimination comes in, and it is staggeringly effective: coupons, sales, discounts, etc etc. The great thing about fixed prices is that there are so many to choose from!

eli• 16 years ago

Or even easier: put the same shampoo in three different bottles and charge three different prices.

rmc2• 16 years ago

Or "Over 65s get 10% discount on thursdays" type thing.

ZoFreX• 16 years ago

I learnt about price discrimination in a pop-economics book a few years ago, and it's everywhere. One of the most important things I've ever learnt.

lucasjung• 16 years ago

What I love about price discrimination is that sometimes you have to think through a few steps to figure out who the target demographics are, which makes it a sort of game for me. Sometimes it's obvious (senior discounts), but often it's a little more indirect. One of my favorites: I drive a diesel, and every Monday Shell sells their diesel at a discount of $0.10/gal. I figure that they're trying to discriminate between businesses (the overwhelming majority of diesel drivers in the U.S.) and individuals: a long-haul trucker has to buy gas right when he needs it, and probably can't just put it off until Monday; I typically use slightly more than half a tank of gas each week, so I rarely need gas so badly that I can't put it off until Monday.

netcan3• 16 years ago

In many places people still haggle for most things.

Even where I live (Melbourne, Australia) a very non bargaining place, some restaurant districts have bargaining cultures. If you play your cards right, you can get wine and dessert thrown in if you order the steak, site by the window before the dinner rush (makes the restaurant look full).

My point is that bargaining norms aren't necessarily evolved from necessity, it's often just cultural quirks. This video is poking fun at a particularly quirky subculture.

thret• 16 years ago

I'm living in Melbourne and I am unaware of this. Wine and dessert? Surely you must be joking.

Goladus• 16 years ago

True, on the other hand scenarios very similar to this do happen in real world consumer retail situations. If any of your friends work in retail show them this video and ask if they have any stories about customers.

cubicle674• 16 years ago

I bargain for almost everything (much to my wife's embarrassment :). One thing I've found, is that if you can't get them to reduce the price, you can often get extras thrown in. I recently bought a fairly expensive coffee machine (a real one, not one of those electronic ones); supplier wouldn't budge on price, but I did manage to get $400 credited to my account, 2x barrista training vouchers worth $150 each, and a few other little bits. Extra value to me, over $700. Cost to supplier, assuming reasonable markup, probably less than $300. Win win.

Edit: few things:

* Most important of all - don't be a dick. Be friendly, honest and don't waste people's time

* If you can, hold of your purchase until you get the deal you're looking for. When I got my macbook, I when to a number of places and in the end got free applecare and a free case.

* If you're buying white/brown goods (except computers), a simple "What price can you do on that?" will almost always see a 10% discount, sometimes way more.

* Some stock is in constant demand, and you'll almost never get a discount. Black mens trousers, for example.

* If something on offer, the person selling it want's to get rid of it, and will most likely negotiate. Best example is food at the end of the day. Walking past a stand discounting the remaining donuts for $6/box, but you've only got $4? Make an offer anyway.

er... think I'l stop before this looks like a post on Lifehacker or something :)

jberryman• 16 years ago

Yeah better stop with the haggling for stale donuts ;)

What are "white/brown goods"?

lionhearted3• 16 years ago

Great comment.

> * Some stock is in constant demand, and you'll almost never get a discount. Black mens trousers, for example.

The flipside is, if you're a guy and you're willing to wear light blue, pink, purple, and yellow, you can get some seriously great buys. You can get very high quality clothes in those colors for dirt cheap sometimes, which is why around half of my wardrobe is bright.

It takes a little aesthetic knowledge so you don't look ridiculous, but everyone should probably learn a little basic aesthetics anyways - it's one of those areas that a tiny bit of knowledge pays huge dividends.

unwind• 16 years ago

How is losing $450 a win for the seller? You mean it was a requirement to get your business, to throw in $450 of extras? I hope it was a very real coffee machine. Plumbed variety? :)

shimonamit• 16 years ago

> er... think I'l stop before this looks like a post on Lifehacker or something :)

Yea, let's lay low. We don't want gnosis thinking we're another gawker site or something.

calloc• 16 years ago

Where did you end up getting a MacBook with free Applecare? I want in on this!

michaelneale• 16 years ago

Well on the software side I saw it as the difference between software as a product, versus bespoke development (although it can get fuzzy with enterprise sales, I am sure) - but the principle is the same. Many consumers == no wasting time (and no need) bargaining, vs 1 consumer: you have no choice.

zalew• 16 years ago

Exactly. Funny is, I've seen this video months ago (or more) linked as 'pay for marketing/advertising/webdesign', so it applies to most industries.

jwh• 16 years ago

The video shows perfectly why unwritten/verbal/implied contracts are to be avoided at all cost.

Against my better judgement I recently completed some work without a written contract. It was exactly like the restaurant scene: they'd received the services and used them but started questioning the bill (after it became overdue).

I still find it strange that people view other people as a commodity like oil or pork bellies yet they expect ridiculous returns, akin to a barrel of oil spontaneously duplicating and selling itself for $300

billswift2• 16 years ago

I used to work for an architectural and landscape designer and builder. After getting a judgement against him when a client took him to court, he quit using written contracts and instead went to week-by-week meetings with clients and billing on the same basis, so neither ran away with misunderstandings or too great sunk costs. It worked pretty well for the next 25 years, until he retired.

jeffiel• 16 years ago

Ha, this reminds me of the Microsoft vs. GM comparison from yesteryears. Cars would crash unexpectedly, etc.

edw519• 16 years ago

It's war, I tell ya!

The video should play the first 10 minutes and then display a dialog box prompting for a credit card in order to update to "Premium" (which would just make the dialog box go away).

The hairdresser should color her hair purple, but once she paid the bill, it would magically turn blond at 3 a.m. via Microcolor Automatic Update.

The chef should electronically disable the steak-embedded Exlax dispenser once the bill was paid in full.

oops, just in case... </sarcasm>

wh-uws• 16 years ago

Link to original site

http://www.vendorclientvideo.com/

andyidsinga• 16 years ago

classic: "we'll do this this time but you need to show us how you did it so we can do it in house"

invisible• 16 years ago

The guys that made this seem to do a lot of "high-end" marketing, so I guess it doesn't get much better with big clients (http://www.scofieldedit.com/).

Really neat video though!

ecuzzillo2• 16 years ago

You can order a filet for a fairly predictable price, it will take a fairly predictable amount of time, and it will fairly predictably make you happy.

Software, by and large, does not make people happy or do what they want nearly as reliably as steak does, and so if I were them I would be much more finicky about paying people to make it for me than I am about paying people to make me steak.

And especially, software made to order has even lower mean and even higher variance than most of the software that people use. And you don't know what you're getting until you get it, at which point the incompetent software vendor is demanding some ridiculously exorbitant sum for something it turned out you didn't want anyway.

You personally may not suck at programming, but the majority of programmers do, and so people are very justifiably unwilling to cough up the dough programmers demand.

skore• 16 years ago

I'm not really sure whether arguing the "the work you receive might suck" case is helpful for the discussion. (I'm also pretty sure that it won't get you much love here for that train of though ;-) )

If that's where you start, sure, you can arrive at a lot of conclusions and be none the wiser. I have been to restaurants where the steak was far less reliable than you suppose.

Actually, that's not true - I avoid restaurants like that by figuring out that the one I do go to respects me as a client as I do respect it as the place that makes my tummy full. And there we arrive at the point of the video: The vendors are the ones who bring respect and quality to the table, the problem is that the clients do in no way mirror that respect.

If a client is willing to "just get somebody to do something for as little cash as possible", that's what they will get. Fortunately, people who care about the things they want to have done check first, treat their business partners well and live in a happy place where real things are negotiated for real prices that are then paid like adults.

bmelton• 16 years ago

The obvious counterpoint to that is that there is no give and take in the preparation of a filet.

The success of a development project, or software implementation depends just as much on involvement from the customer as it does for the developer or provider.

In the enterprise, this means setting up a project consisting of stakeholders from which you can gather information, get integration assistance, etc. In the single-project bespoke software or web development arena, it's even more important that the customer is able to provide good feedback, offer and direct according to their vision, etc.

Back to the steak analogy, what would be the remediation for the customer yelling "More salt! More salt!" and then refusing to pay when the final product is too salty?

ecuzzillo2• 16 years ago

The remediation would be to leave the restaurant that lets customers demand more salt, and get a job at a restaurant where salt is applied correctly and customers can take it or leave it.

In other words, if you're good at programming, why are you in the custom software business instead of something more scalable?

piney• 16 years ago

Companies who treat their vendors like this have a company culture that treats them the same way. Its therefore OK to kick around other people, even easier since they are behind a company's 'mask'.

franze• 16 years ago

[video] better than i thought it would be

erikb• 16 years ago

The difference, as I see it, is just that these people in the video really fight for their right. The cook will let his fists talk, if they don't pay. That dvd guy will never buy this dvd and so on. In the IT world there is the problem that there are actually really many people that let themself beeing enslaved and accept those situations. If 60% of the dvd shops would react positively to bargaining, every client would try it. That is "just" the situation w face in our business.

If you didn't see it, I can connect you to some companies. Work for them for some months and you see that 90% of the coders there (contractors or employers) effectively put themself in slavery.

Although not all software developers are like this, we all have to suffer from the consequences of these acts of low selfevaluation.

exit• 16 years ago

this would be a great way to spend fu money. pretend to be a small time contractor and then absolutely destroy companies run by sleazy conniving wheeler-dealers who try to short you.

If people tried to pay for other services like they try to pay for programming

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