In my experience, when building a new product or feature, most customers want certainty on pricing upfront; however, building software is inherently uncertain. After 18-months of hard lessons at Productbox, we found a support model that allowed us to stop a client from leaving and even turn them into a fan! A fan that has doubled spend in the last 6 months 💰
Clients typically want new features to be fixed price. When you continually do fixed price work, your hourly rate is hidden, so get into the habit of constantly showing your hourly rate. Put it on every document you send out! When you are requested to do fixed price work show the client that risk is priced in.
For example, feature A could take 10 hours (100 per hour = $1000), but if you want us to fix price we have to cater for risk A, B, C, so it will be $1500. Ask the client, which one they want to choose? In our experience clients will opt for time and materials.
There are many ways to achieve an outcome and clients will often ask for a specific solution. Whilst they may want it, it may not be what they need (or can afford). Understanding the customer problems and the core job-to-be-done enabled us to make better, more viable, recommendations.
Example: We had a customer who initially requested the use of hardware beacons (bluetooth/IR) to notify people when they were close to a shop. We used the RICE framework (Reach, Impact, Confidence and Effort) to encourage leveraging Google Maps API . They now benefit from location based triggers from more shops, at a lower cost, and with more scalability and reliability.
Studies demonstrate that receiving periodic updates significantly reduced stress and anxiety when compared to only upon completion of the service. Proactively communicating timelines, progress and obstacles helps mitigate customer dissonance, whilst building trust and increasing the likelihood of repeat business.
Be transparent about your services, advise your customers, and communicate!