Do you charge more when the company is bigger?
Thinking about why we tend to charge more on services from big companies than we do from smaller ones (even with equivalent service types).
My point of view is that we charge more due of all the adjacent work that big companies push us to do: more meetings, more waiting, more approval pipelines, and so on.
I used to think that it was unethical to charge more for the same kind service depending on the company size. It happens that it’s far from being the “same” service – even though the outputs are very similar on the surface.
What is your take about this matter? How do you approach deals with small / big co's?
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Big companies are going to be harder to work with -- they often force extended payment terms on you and ask for unreasonable amounts of support. They're also likely to generate more value from your solution simply because of the larger scale at which they operate.
Ultimately, a fair price is the price someone is willing to pay.
Charging less than the market will bear is certainly an option... but so is running a homeless shelter or volunteering your time picking up trash by the side of the highway.
"...they're also likely to generate more value from your solution" Bingo!
That was another argument I was thinking about these days to justify and find a "framework" of why we tend to charge more from big co's.
The price we charge has to be proportional to the value the client gets, plus the amount of effort of the process itself (like you said support, payment terms, meetings, approval pipelines, ...).
You aren't charging more for bigger companies. Out of the goodness of your heart, you're charging less for small companies 😉
Definitely that's another way of looking at this, and I like it better 😅
I haven't work with big player yet.
But if someone will approach me, I will defiantly price them at higher side. For me it is business. If someone making 500 more because of my work why don't I charge 200 more.
There is no such thing unethical. I am not making fool anyone by charging more.
Well, I wouldn't say it's unethical, it's just how the market works. When I'm asked this kind of questions, I always remember a story when Microsoft in its early days was selling Windows in Australia 3x of its price in the US: just because they could.
Yeah, but it's fundamentally wrong. Same product, already manufactured and shipped: it can't cost more just because the client "can" pay more. If there are hidden country taxes, it's another question though.
And there is exactly where my point makes more sense for services: the process is always unique depending on your client. It can drain all your energy, or it can go smoothly. So, we have to get some XP in the field to classify potential energy draining clients and charge for that extra effort – so we always keep a smile in our faces when dealing with them 😬💰
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