Another Client Puzzle

You send an estimate to a client for a 4 part project. It's an hourly arrangement and no guarantee of final cost is given.

The project ends up being much more involved than anticipated and you spend the entire budget of the estimate you gave completing 1 part of the 4. The client decides that is ok and doesn't really need the other 3 parts. Part 1, that you completed was the most important to them.

You bill for the time spent to complete the one part. The client balks at the charge and says that they should only have to pay 25% of the 4 part estimate since only 25% of the work was completed.

What do you do to solve the puzzle?

Don't settle for less than 75%. They should know that things got more complicated on that first part; and if it's a workable, usable product, the other parts should be relegated to "optional" and they should be regarded not as an equal quality/quantity/deliverable as the main part.

It's like getting a car, an engine, a transmission, four wheels, disc brakes, controls, steering wheel, four doors, windows, windshield... even paint. But you didn't get huge ass rims, tint, tricked out exhaust. If you can drive it, use it, you pay that full price for it. If you want the rest, you pay for the extra options.

Good point. I hadn't thought of it that way. There's a proportion of importance to the various parts.

In this case though, a specific breakdown was given up front that it was expected to be only about 25% to each part. However, it was carefully put that these were just expected dev times and no cost guarantee was given for any part. It took longer because the documents explaining each part were too simple and did not fully explain what was involved in each part.

I would seriously outline where the extra time came in then.. focus on the parts they omitted in the first place to make the project larger than expected..

educating your clients on how to be 'better clients' only helps you and everyone else in the long run.

I have a service agreement I send out and have them sign, that basically covers the requirements of a project.. It says to REVIEW THE PROJECT REQUIREMENTS SECTION... if it isnt part of this main summary, then it was NOT included in the ESTIMATE for the project and may in fact increase the cost of the overall development.


educate them on what developers (you and anyone) would feel are key elements to the projects timeline & budget.

("You should always tell the potential developer that you are working on "XYZ" patform with "ABC" product...)

clients will forever (and ever) try to down play the level of difficulty of their need/project..

5 minutes through the freelance forum will tell ya that! ;)

they all start out..

"this is small & easy..."

"easy for anyone who knows Flash..."

"one of hour your time for guru.."

lol

Ever set yourself into a project and once you dive in, it ends up being bigger than you thought?

Or easier?

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Originally Posted by whispers

I would seriously outline where the extra time came in then.. focus on the parts they omitted in the first place to make the project larger than expected..

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I agree 100%. We had a client about a year ago that gave us a very thorough spec for a website. Each week when we met with them they'd make changes and a very large project quickly became an enormous project. Like your project we didn't have a set rate and when they found out it was going to cost more than the original estimate they griped but we gave them the outline of additions that they had made. They didn't have much to complain about after that.

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Originally Posted by gerbick

Ever set yourself into a project and once you dive in, it ends up being bigger than you thought?

Or easier?

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Totally...

but I am not 'new on the block' so to speak.. I have worked on many various projects.. have at least exposure or experience in other web technologies..

so gauging time lines and what will be needed and usual obstacles of this tye of project are all somethign "I" bring to the table..and is part of my skillset/experience...

that being said.. Im no Jedi.. and I cant read minds.. If they omit details whether on purpose or accident is STILL the responsibilty of the client.

If I called my auto mechanic and said I got something wrong with my brakes.. and I want a tune up...

it only makes sens that if when I get there.. I want MORE WORK done on my car.. that the cost/estimate would go up... :)

I never thought you were new to the block. Just was wondering if you took that into concept. I currently have a project that made perfect sense on paper, I built the framework in like 3 days, had it set aside as the "easier" part of the contract.

"Wrong" - Charlie Murphy

It took 2 months due to their idiotic requests, and by the time I got to the other "bigger" pieces... those only took me mere days.

Moral of my story though... the client was definitely misleading me because they kept adding, but I was onsite, paid hourly, and each time a new change was created, I made them sign-off on new deliverable schedule.

I hate unseen changes. Stick to the plan, everything else will be "part 2"...

Way I see it, you shouldn't have to go behind the counter and make your own big-mac. My clients shouldn't have to know d*ck about the web.
I have clear Client Responsibilities, Environment Requirements, and Timeline Triggers outlined in my contracts. That's the point of contracts. If you clearly outlined the risk, they are bound to that. If the order changed, a new contract should have been signed.

Your issue lies in what caused the budget to be eaten up in phase 1. Was that the clients are your fault?

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The project ends up being much more involved than anticipated and you spend the entire budget of the estimate you gave completing 1 part of the 4.

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Was the client made aware that their entire "budget" would be spent on Part 1 previous to Part 1 being completed, or better yet - were they made aware that Part 1 would take their entire "budget" before a significant amount of time was put into the work? If the client was not told that Part 1 sucked up their funds until after Part 1 was completed, then I would say that that was poor Project Management, & the client would be in the right. "Surprise, you're out of money!"
Building a bit more on :

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If I called my auto mechanic and said I got something wrong with my brakes.. and I want a tune up...it only makes sense that if when I get there.. I want MORE WORK done on my car.. that the cost/estimate would go up...

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Totally right, but I'm wondering if the client was made aware that their budget was sinking completely into the first part. Let's suppose the mechanic finds that while your brakes are bad, it's really because your axles are shot, & your wheel wells are misaligned (I'm not super car-savvy, so use your imagination) so he decides to repair all of that without making you aware that the problem is much larger than your brake pads. You show up to a huge bill & he demands payment. What to do?
Whether or not part one took a headstone longer than expected, if the client wasn't made aware of that in a reasonable amount of time, then I don't think they should be on the hook. You need to hold true to the contract as well, or draw up a new one citing a "Scope Change". If you blow the details of the contract by overworking one facet, then you've eaten the cost. Granted, it was an "open-ended no final cost decided" arrangement but when you hit 25% (at MOST, 10% would be better) you should have said "There have been some oversights, if you'd like us to continue work we should talk about the unseen problems that have arisen & work up a new, more realistic contract for the remainder of work."
(why am i defending clients?!?!)
Fire The Client!!
:P

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Originally Posted by jAQUAN

Way I see it, you shouldn't have to go behind the counter and make your own big-mac. My clients shouldn't have to know d*ck about the web.
I have clear Client Responsibilities, Environment Requirements, and Timeline Triggers outlined in my contracts. That's the point of contracts. If you clearly outlined the risk, they are bound to that. If the order changed, a new contract should have been signed.

Your issue lies in what caused the budget to be eaten up in phase 1. Was that the clients are your fault?

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??

jAQUAN-

Im not saying they need to know how to develop or DO any web work..(make their own burger).. however they have to know what they want to eat/order...no? That not fair to expect a client to know they want? If they dont know what they WANT..how can you possibly deliver it?

I mean Im a realist.. I know not everything can be covered in the beginning..things changes.. sometimes during development you come up with other ideas/strategies..etc..

but if a client doesnt work hard or take the time to be SERIOUS about THEIR project.. Thats on them. If they half-ass it and dont want to take the time and story board out their own needs/wants to be able to communicate it properly to ME (the developer) I can ONLY see it as a fault on their side.



I agree the problem is what took the extra time & money to complete the project...

He stated the project was more detailed then originally given/stated..

SO if they order a burger.. I make it.. then in the end they are asking there their double stack, with lettuce, cheese & tomatoes.... I think any 'counter worker' (developer) would say 'you didnt order that'.. if you want THAT.. the cost is going to an additional: $$$..



gtaC-

I can see this point/side. If communication was NOT open and NOT relayed to the client that the project was NOT as initially presented.. then yes.. I can see eating some of the cost/time on your side. If they dont KNOW they are not providing the correct/full or complete details for the project (or worse yes.. purposely omitting details to make the project seem smaller....happens ALL the time).. and they were never 'called out' on it.. then it woudl be hard to expect them to know any better or expect different results..



gerbs-

I didnt mean the 'new on the block' comment to be at YOU (per se`).. I just meant it as a general statement on having some experience to judge/estimate projects appropriately.

I wasn't responding to your comments whispers. I agree with everything you said. I was just prefacing my statement that it depends on what was discussed/warned against up front. From what I know of FlashLackey I'm pretty sure it was the clients lack of planning.

These questions are always hard to handle after the fact. They usually involve something legal and I don't have much experience with that.

I try to avoid hourly although my estimates are based on hours. I also include and installation cost that details what needs to be ready.

I do alot of that as well.. :)

I try outline several 'topics' in my 'service agreements'..

(its funny, when I say 'service agreement'..people sometimes balk/laugh at it) :)

but Ive found I use these out of necessity now, and the more I have learned/do over the years, the more I come to depend on them and use them.


I usually cover:

Payment Details and how I prefer to handle it

Work & Project Management and how I like to handle it

and lastly which is custom to each client, a rough overview of the project details & requirements, and any special notes regarding such issues.


This has been brought up many times over my years here at FK, Im sure you seen your fair share..LOL

and Ive seen this brought up in the freelance section as well..

I would like to see what others use for their contracts.. and if there arent some things I could 'borrow' to implement into mine,.. and enhance my 'guarantee' of success/protection in different scenarios ..

I like to cover things like PayPal payments & costs (extra costs), if they plan on sending me a 1099 at the end of the year..etc..etc..

maybe we should have a sticky in the freelance forum that members can use as suggestions/guidelines when dealing with work on here (wherever)

I usually do mine invoicing with an Excel spreadsheet, exported to a .pdf when I need to send something out.

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Originally Posted by gotoAndCrash

Was the client made aware that their entire "budget" would be spent on Part 1 previous to Part 1 being completed, or better yet - were they made aware that Part 1 would take their entire "budget" before a significant amount of time was put into the work?

...

Totally right, but I'm wondering if the client was made aware that their budget was sinking completely into the first part. Let's suppose the mechanic finds that while your brakes are bad, it's really because your axles are shot, & your wheel wells are misaligned (I'm not super car-savvy, so use your imagination) so he decides to repair all of that without making you aware that the problem is much larger than your brake pads. You show up to a huge bill & he demands payment. What to do?

...

(why am i defending clients?!?!)
Fire The Client!!
:P

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I was trying to keep the story simple to make it easier for people here to respond to one aspect of this. A missing piece to this puzzle is simply the sheer proportion of things. This was supposed to be a 2 week project. It has taken 10 MONTHS to complete the 1 item (it was actually more than 1 item but again, I didn't want to go into all the gory details). It did not take 10 months because we didn't know what we are doing. Rather, the explanation for what the work was did not indicate all of the dependencies involved. It was like showing us a screenshot of a form and saying that they wanted an extra drop-down menu added and finding out that in order to populate that drop-down, a complete re-write of half the major functions of a massive e-commerce solution was needed.

Client notification of this change in scope is perhaps the most galling thing about this. Obviously, with that much time having passed, the "where are we at" question was visitied numerous times. The project was discussed with the client at a minimum of 2 times a week. He knew immediately when it became a bigger project and was right there talking about what other changes needed to be done the whole time. Then, at the end of the project, he comes back and says that he had expected to pay for 30 hours of work for all of that work that he was closely involved with over 10 months.

To use the auto-mechanic analogy. It would be like your theoretical customer not only being notified of the problem but having him present during the entire operation on the car with the mechanic, handing him tools and theorizing along with him what parts of the car needed to be repaired. And then having that theoretical customer saying, after he watched and helped fix all the cars problems, that he should only have to pay to put air into the tires.

Yeah. Why are you defending clients?! You're fired! ;)

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Originally Posted by jAQUAN

I wasn't responding to your comments whispers. I agree with everything you said. I was just prefacing my statement that it depends on what was discussed/warned against up front. From what I know of FlashLackey I'm pretty sure it was the clients lack of planning.

These questions are always hard to handle after the fact. They usually involve something legal and I don't have much experience with that.

I try to avoid hourly although my estimates are based on hours. I also include and installation cost that details what needs to be ready.

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Yeah. We don't do too much work on time and materials any more either. But, in some cases, when it's difficult to determine how long something will take (like when working on someone elses code), it is a useful structure to protect yourself. It proved to be the right thing in this case. Only, the client is now trying to avoid paying by pretending they didn't understand the stipulations I made when we started (that it needed to be hourly). The frustrating part is that, as I explained above, they were right there the entire time. It's like having someone lie right to your face about stealing your wallet when they saw you looking at them right as they were putting it in their pocket. "Nope. I didn't do that. What are you talking about? Want me to help you find your wallet?"

Here are some rules that I apply, based on some similar experiences.
1. I KNOW they don't know what they want - sounds sarcastic, but I always know that they will make comments once they see the solution, so I try to anticipate this by giving them a partly working rough as soon as I can, this confirms that the picture in my mind and theirs is the same.
2. I upload the rough to my webspace not theirs, keeping control is essential.
3. I detail exactly what they are paying for, and get agreement, and part payment at this stage.
4. When the extras requests come in, I tell them that I will send them a proforma invoice by e-mail, and ask for confirmation, sometimes this cuts them back to the original, or it confirms the extra money.
5. I complete the origonal work, and ask for payment, prior to doing the extras.
6. I log all calls and copy myself in on all e-mails, and keep a time log on work done. These items are essential if you ever need to legally contest none-payment.
All these rules are designed to remove the nasty shock syndrome of a bigger invoice, plus if your client is cavalier about the budget, and says things like, just get on with it, money is no problem, believe me, it always is!

Those are good rules. In most situations, I follow a similar pattern. But, not so much as a set policy. This project was one of those that appeared harmless and kind of flew under the radar until it was too late. Had I followed a list of policies like this, just as a matter of routine for every project regardless of it's "harmlessness" I probably could have saved some headaches.

Although, another piece of wisdom I picked up from someone once was that "no contract will protect you from a client who is determined to screw you over. The only protection from such clients is to recognize them as that type and to stop working with them as soon as possible." I think that's true. If it wasn't this hourly issue, it was going to be some other problem with this one.

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Originally Posted by FlashLackey

"no contract will protect you from a client who is determined to screw you over. The only protection from such clients is to recognize them as that type and to stop working with them as soon as possible." .

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Absolutly, they are out there.
One thing that is in there mind is that because we don't have to invest in stock, then we don't have costs!, well I'm selling the one thing that is running out, and I can't get any more of, MY TIME.

In that case FL, question their manhood.
"Are you sure you're just not man enough to admit you didn't know what you were getting into?"

Hehe jk.

I guess I'm just not a fan of the tone that 'clients are out to screw you'. They are buyers and simply want a good deal. It's not their fault they have an entire business to worry about and would just prefer the web guy took care of the web page. We know it's not that simple but I'm still going to go out of my way to make the entire process enjoyable and rewarding.

Just the same, my business has a no-nonsense approach and is straight up with the uncomfortable stips.

I hope they see the light man.

Btw, I'm going through a similar issue but the client knows it's not my fault and is being cool.

The problem with clients is that they can always play dumb. But I don't believe they always are dumb...It's more that they're advantageous.

FlashLackey, if the client was aware of bumps all along the way, then yeah, they may very well be trying to hustle you. People seldom realize how much work goes into these kinds of things. If I was that client & you told me 2 weeks & 5 weeks went by, then, I, as the client would say "Whoa, what's going on here? Red flag!" - at which point I would be expecting to have to pay more, & would use logic to realize that extra time = extra money, but oopsie, there I go using "client" & "logic" in the same sentence. ;)
There are a few versions of this circulating, but here's a good one about Nightmare Clients - it shows that while clients know nothing about most of the things we do, they seem to be experts on what it should cost :
http://www.mathewbrowne.com/nightmar...esign-clients/

Good luck to you FlashLackey, I hope it all works out for you. :)

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Originally Posted by FlashLackey

The project ends up being much more involved than anticipated and you spend the entire budget of the estimate you gave completing 1 part of the 4.

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Then surely the estimate was wrong? If so, the client is in the right and can only go off what you quote and advise.

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Originally Posted by jAQUAN

I guess I'm just not a fan of the tone that 'clients are out to screw you'. They are buyers and simply want a good deal. It's not their fault they have an entire business to worry about and would just prefer the web guy took care of the web page. We know it's not that simple but I'm still going to go out of my way to make the entire process enjoyable and rewarding.

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I'm right with you on that. I don't have an anti-client attitude and my gut reacts the same when I see most anti-client posts here and elsewhere. This is just a rare, exceptional case where the problem doesn't come down to effort to give good service. Another layer to all of this is that I've already given this client breaks on prices, agreed to terms that were unusual and made us vulnerable, waived other charges that they "didn't expect", put in tons of free time consulting and planning projects for them, etc.

This time, it's a "fool me twice, shame on them. Fool me thrice, shame on you" situation.

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Originally Posted by gotoAndCrash

The problem with clients is that they can always play dumb. But I don't believe they always are dumb...It's more that they're advantageous.

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I think you hit the nail on the head here in regard to their strategy. Only one problem, this guy, before he started this company, worked in the web industry for 7 years! His last related job was as an art director. I don't see any way that he doesn't know perfectly well what things take, what is billable, etc.

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Originally Posted by gotoAndCrash

If I was that client & you told me 2 weeks & 5 weeks went by, then, I, as the client would say "Whoa, what's going on here? Red flag!" - at which point I would be expecting to have to pay more, & would use logic to realize that extra time = extra money, but oopsie, there I go using "client" & "logic" in the same sentence. ;)

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I pointed this out to them in almost the same language. They had exclaimed something like "If I knew this was hourly, I would have brought the cost issue up 7 months ago!" I responded something like "if you thought we were exceeding the budget 7 months ago, the appropriate thing for you to do would be to bring it up then and come up with a fair solution. Not to watch us do 7 months of work while being silent about your intentions not to pay for it."

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Originally Posted by gotoAndCrash

Good luck to you FlashLackey, I hope it all works out for you. :)

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I appreciate it. It took a day or two. But, I'm past the emotional surprise and anger phases. Now, it's just another matter on the list of things to do. I offered them a deal with a reduced cost that would amount to us taking a loss on the work and they're still contesting things. They are about one email away from having me retract the reduced rate offer and having our lawyer send them a cease and desist.

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Originally Posted by RazoRmedia

Then surely the estimate was wrong? If so, the client is in the right and can only go off what you quote and advise.

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The estimate was inaccurate. However, that is the definition of an "estimate." A value that may not be accurate. We didn't sell them an estimate. We sold them an hourly rated service and estimated that it would take a certain amount of time. As long as the client was aware of the change in scope (and they were) I don't see how you can put them "in the right."

Agreed. There are days when I feel like wefail's mantra.

It pretty much comes down to proof of disclosure failure. If you can show the client an email clearly asking for environment variables to consider during development and if those answers/lack thereof caused the four phases estimate to apply to a technically different request then you are in the right.

If the client simply wasn't aware those things could cause an issue then you're stuck with either enforcing your rights and possibly losing a client or viewing this as a client learning experience which could make future work with them more profitable because of it.