Tag: Fixed Pricing

In a typical Salesforce implementation project, you’re usually asked to provide a work estimate fairly early in the sales process.

The biggest problem with this is, you’re providing a number in a moment when you know the least about the client and the project.… Read the rest

Another problem with hourly billing as a Salesforce consultant is your incentives are in the wrong direction.

Imagine you have a house and are presented with two options:

1. A single person with scissors will come and mow your lawn, trim your hedges, and make sure your garden looks great.

Are you an independent Salesforce consultant that still charges by the hour?

Have you noticed the market limits your maximum hourly rate?

For example, the expected hourly rate for an experienced consultant is about $150 to $200 an hour, which results in an income ceiling of about $200k to $250k a year.… Read the rest

Once you move away from hourly billing, there are two main types of pricing for Salesforce consulting services: project-based or monthly.

Monthly agreements are generally a good fit when:

• you’re one of many on the project
• there isn’t one specific deliverable
• the client needs on-going support
• the client wants access to your bain

During the sales call, you need to determine which type of pricing would fit best for your client’s needs.… Read the rest

When you’re switching from full-time employee, should you bill hourly or jump straight to fixed prices?

The easy way is to price yourself hourly. You can take your annual salary and divide by the working hours to obtain an hourly rate.… Read the rest

As a Salesforce consultant, can you be paid for time not spent in front of your computer?

To answer this question, let’s take a step back in time for a moment, and let’s examine my personal journey.

My professional career started as a software developer.… Read the rest

One important element of a fixed price proposal is managing change orders. And when I say, change orders, I mean not having any.

The whole purpose of being fixed price is being fixed. What would be the point if the price kept changing via change orders?… Read the rest

You’ve just submitted a 5 page fixed-price proposal for a Salesforce project. The client is shocked your prices are so high and attempts to negotiate. What do you do?

To start, there are two things to consider:

1. Perhaps you didn’t assess the situation correctly
If your prices are actually too high, it’s possible you misread the situation.… Read the rest

When submitting a proposal for a Salesforce project, there are a number of important sections to include.

1. A situational appraisal
This section, usually the first in the proposal, explains the situation back to the client. It shows you’ve paid attention to their needs and the circumstances.… Read the rest

In yesterday’s example of a mid-project change, some readers commented it was a fairly minor change (switching from Zapier to Make). Some asked what can be done if it’s a larger change during a fixed-priced project. In essence, this is a question about scope creep.… Read the rest

One of my current projects is a Shopify to Salesforce integration. The client had purchased Zapier, and I was OK with it, so it was the chosen connector.

Products and orders needed to be synchronized with Salesforce, one way only.

With Zapier, the order lines were concatenated on a single line.… Read the rest

Let’s consolidate the previous two posts about scope and price in a Salesforce project.

The flowchart below allows you to see the steps and process involved in determining scope and pricing method.

This is the exact process I’ve been using for the past two years, so I hope you find it helpful.… Read the rest

Once you’ve an idea of what your client wants and the value of the Salesforce project, it’s time to sit down and determine options for price and scope.

Remember, scope is last, so the next step is deciding your prices.

Here are two popular pricing methods:

1.… Read the rest

One of the most popular questions I’m asked is, when doing fixed pricing, how do you accurately scope a Salesforce project? Don’t you need to add tons of conditions to protect yourself?

Note: This question doesn’t apply when you’re selling a product or a productized service, as the price and scope are already established.… Read the rest

Let’s assume you’re a freelance Salesforce consultant, and are currently billing by the hour.

You’ve heard me speak about fixed pricing before, and the topic interests you. You just don’t know how to switch.

Here are three considerations to help you with this transition:

1.… Read the rest

One great way to offer your services as a Salesforce consultant is with a monthly package.

This is often well-suited for support work, but can also be for larger projects in which you are one of many and don’t control the project’s scope.… Read the rest

Last year, a Salesforce agency was struggling with their developers. The devs were attempting to tackle a project that was beyond their knowledge. In addition, they needed advice on how to approach certain technical situations.

I was engaged to help. A monthly subscription-style service was proposed, as it provided flexibility to the agency to decide the duration of the engagement.… Read the rest

One fellow reader asked me to write a “lesson learned” story about value based pricing.

A small nonprofit was looking for help with their automation. Things like

• A record was supposed to be updated when another field changed, but wasn’t
• Related records had to be manually tagged as the most recent
• The last time a contact completed a course was manually calculated

So we agreed on a rough scope, which included the problems above and a few other minor issues.… Read the rest

Yesterday’s article left off with the question: how can you come up with a time and price estimate for the implementation phase of a Salesforce project?

The non-typical answer is: you don’t.

That is, you don’t estimate anything. Instead of the typical approach of

1. Determining a level of effort (LOE)
2. Mapping the LOE to an hourly amount
3. Multiplying that amount by an hourly rate
4. Adding a 15% buffer
5. Crossing your fingers and submitting your proposal

Here’s the non-typical approach:

1. Having a conversation with your client about their business goals
2. Asking them what their definition of what success looks like
3. Determining the value of the project to the client
4. Submitting a proposal based on the value you are bringing

This is called value-based pricing (VBP), and it’s a completely different mindset than hourly billing.… Read the rest

I’m wrapping up a Salesforce discovery project with a multinational client. The engagement went really well, so they’ve asked for a proposal to do the implementation.

The client was also transparent from the start of the engagement. They said they would submit a Request for Proposal (RFP) so other Salesforce partners could bid on the project.… Read the rest

Based on the previous emails, you can see that value-based pricing (VBP) is quite different from regular time & material (T&M) projects.

Many of you will probably be shocked by the concept. Your initial reaction might be to not believe it’s actually feasible.… Read the rest

Fellow reader Christopher asked, regarding fixed-priced projects, how does the payment structure work?

The short answer is, get paid 100% up-front.

The “usual” approach for invoicing Salesforce projects is:

1. Build part or all of the project
2. Invoice the client
3. Cross your fingers that you get paid within 30 days

Charging late fees, sending reminder emails, and politely but firmly chasing the client are all part of this approach.… Read the rest

The second most important thing to know about value-based projects is to scope last.

Yes, last.

Here are the steps to be complete before you determine the scope:

1. As best as you can, determine the value of the project in the eyes of the client (see the post about finding the project’s value)
2. From there, you come up with three options at the following price points: Option 1 is 10% of the total value of the project.

The most important thing to know about value-based projects is the value of a project is determined by a combination of math and art. The math can sometimes be straightforward, but sometimes it may require additional creative help.

For example, let’s say the project is to merge Salesforce orgs.… Read the rest

Method #5: Value-based projects

The following process must be quite familiar to you:

1. A client asks for your help
2. You give an estimate for a discovery phase, for an amount that’s based on your past experience
3. Once discovery is completed, you know most details of what you need to do and how you plan to do it
4. You submit a proposal with an estimate, based on time & materials (T&M) to implement everything above
5. Midway through the project, you determine your estimates were too low, so you submit a change order, then another, then another
6. The client gets frustrated with the constant extra charges, but because of the sunk cost, they begrudgingly proceed
7. At one point, you stop charging the client and “eat” hours out of guilt, and both parties are frustrated

Now instead of all that, what if we flipped it around and use value-based pricing (VBP).… Read the rest

Method #4: Retainer

Once you become well known in a specific vertical or horizontal domain in Salesforce, you can offer a retainer service.

When I say “vertical”, I’m talking about an industry, such as nonprofit, financial, or healthcare. For “horizontal”, it could mean a cloud specialization, like CPQ or Field Service.… Read the rest

Method #3: Managed service

A managed service is a monthly subscription-type of service. In return, you offer and fulfill a list of clearly set functions or objectives.

The main difference between this method and a productized service is that you customize the price based on the client’s requirements.… Read the rest

Method #2: Productized service

A productized service is a hybrid of a product and a service. You sell it like a product, with a fixed price. And you fulfill it as a service, with a very clear scope.

The boundaries of the scope are important here, as you don’t want scope creep.… Read the rest

There are five main ways Salesforce consultants can move away from hourly billing. Depending on whether you are a full-time employee or a freelancer, not every way will be easily available to you. The goal here is to show you the ways and then for you to determine which one or ones are best  suited for your situation.… Read the rest