We get many questions about our point-based system, because well it is different – not difficult. In fact, once our clients understand the advantages of working with an agency, they often wonder why other agencies don’t do the same.
What am I really buying when I buy points?
You can’t look at it as buying hours from us; you are buying project deliverables and the value they produce. To quantify this value, we use points as the unit of exchange.
We bid out the projects using a calculator, so each project is based not only on time but also on value. Meaning we may spend a decent amount of time doing a simple and inexpensive task, but instead of charting you an outrageous rate, we pass those savings on to you.
This value-based pricing is important because, as our client, you will have several services from web20ranker.com that are done through the month between marketing strategy, SEO, Web Development, Design, data entry, reporting, and more. Why should be charted a developer rate when reporting tasks like pulling reports and data entry don’t require the same tools and expertise?
You might ask, well, why don’t you bill each task according to how long it takes? We will explain why, as well as all of the advantages of point-based projects.
Advantage of Point-Based Pricing
- Simplified bills and accounting procedures for you and us
- Keeps work on time and in budget
- Purchasing results not “busy hours
- Projects are more agile
Itemizing each task into 15-minute intervals with accurate hourly rates would create a lot of overhead, headache, and extra work – all decreasing our results’ efficiency.
This complex billing process will make it harder to give accurate estimates, and when the work is finally agreed upon and done, you get a bill so complex that no one wants to take the time to try and understand. If you have to explain this type to a superior, they don’t want long answers; they want simple solutions.
Keeps work on time and in budget
We bid each project to the month prior, and an advantage to you is if we estimate wrong and it takes us longer than expected, you don’t have to pay for those extra costs. In the cases we finish early, we keep working and move down to the next item on your project wishlist, where the projects are prioritized on impact and effort. It is like having the benefits of an efficient employee without having to pay payroll.
This is why it is point pricing is better than hourly rates. When have you seen a web or programming test ever come in on time and on a budget from the initial quote? Let’s say it takes an additional four days to complete most agencies will stop the project and say, hey, we can take a short cut and finish in one day or take an extra four days for an additional price of how many hours they charge you. That is if your lucky, some agencies will finish the work and then charge you for that time whether you asked for it or not. Regardless, Your project is now late, you miss out on any lift it could have generated in those days, and it cost you extra money.
Now let’s look at this example through the lenses of value-based pricing and how we do things at Mach 7. If we bid on a project wrong and take us four extra hours, we eat those costs. You are paying for value, not hours.
Each month before working, we review your project, and if a project we added to the wishlist originally was 4 points but needs to be 6, we will let you know before starting. Let say we start the project, and it really took us the time and effort to be 8 points well, we estimated wrong, and that is our bad. We don’t go around and bill you for those extra points. Our goal is to dive you deliverables that drive results and ROI.
Quick disclaimer, the above is the scenario if we bid the project wrong if there is some challenge on your end or a technical error, we generally will try and fix it first. Still, if it is an excess of over 10 hours, we will probably need to make a compromise. Always, it will likely be easier and more efficient than trying to negotiate additional hours.
Purchasing results not “busy” hours
The point-based system not only simplifies billing but saves you money by you not paying for hours for us to pitter around looking busy but rather have us focus on productivity bringing your company more value.
Let’s face it most people who are paid by the hour don’t focus on being productive; they focus on being busy – which usually generates more hours and a bigger bill. We are not saying that agencies try and rob you of your money (okay, some do but not a lot), but even for all of those agencies that really try and give as much value as they can unintentionally fall victim to this trap because they are not incentivized to get it done as soon as they can. If the probability of the “extra task they do for you to fill the time so they still get a full check probably isn’t as valuable as the rest of the project.
Agile Projects
This model is also very agile, allowing us to adapt to your needs and requests in a timely matter and helps both you and us stay focus on the goals at hand.
This agility comes from how we use the wishlist. If something occurs Mid-month, as long as the work has not started, if you need to switch items based on company goals or a crisis, it’s easy to do so. No extra fees or an excessive amount of time, making sure your dollars are being put to work towards your company’s goals and objectives.
Let do a hypothetical example we charge you. $15
for data entry and $100 for web or $80 marketing and $50 for project management. This would be a huge hassle and make billing and planning a headache. Not to mention increased project management and overhead costs.
What about discounts?
This price is a discounted price per point if you agree to 3 or 6-month terms of service. If you want additional points for one month but not every month, then additional points may be purchased at $44 a point. For prospects looking at one-time projects and no contract or commitment to future projects, we bill at $50 a point.
Conclusion
We hope that helps explains our system better and how it saves and provides value to our clients. Regardless if you found the information helpful, you can click the button below and see a sample of our pricing grid. These are not exact point values as we look for ways to save you money, and specific industries may require additional work. The pricing grid should be used as a guide, not law, kind of like the Pirates Code.
