We like to say that we’re in the business of people — we just happen to build digital products. To live up to this motto, it’s deeply important that we understand how to foster trust with the people we’re working alongside. A key facet to building this foundation of trust is transparency, particularly around pricing.
Nobody likes hidden fees. Any client will tell you that they’d rather fully understand the cost up-front than be saddled with up-charges and shifting hourly rates throughout the engagement. Since many of our projects can last months to years, we work from a duration and price model to maintain flexibility while also defining what a client is purchasing.
Duration and price – our digital product agency pricing model
With a duration and price model, the project cost is determined by the duration of our team members’ time on the project rather than a list of specs that will likely change throughout the engagement. Members of a product team dedicate their entire time or a percentage of their time (25% or 50%) to a particular project over a span of weeks or months. Price is calculated differently for more customized engagements, like agile coaching or design sprints.
- Duration is the length of the engagement from the authorized start date to the termination date.
- Price is the fees associated with the project engagement, determined by weekly rates of production team members.
These two components are used to create the cost estimate you see on our contracts. These proposals break down the total amount of time you’ll be working alongside Crema’s product teams as well as the weekly rate for each member. Here’s a sample of what that might look like:
We like this model for a few reasons:
- It focuses on a client’s goals and how we would structure our team around those objectives
- It puts the client at the head of the table
- It supports the reality that things will change, making it better for long-term engagements
- There’s less overhead involved for change orders and other issues that arise with fixed scopes
- It reiterates the focus on value and results vs. specific features
- Estimations and scope are used to inform the client and product team — not direct it
With a fixed scope, the agency is incentivized to use all the time even if they don’t need to. It doesn’t incentivize innovation and solving problems, like a duration and price agreement.
“This type of contract brings people together to maximize business value rather than forcing them apart to argue over change requests.”
Former PM and Director of Marketing, Alexa Alfonso, digs deeper into the mechanics of Agile contracts in this blog post.
Quality + ethics
Many can justify higher spend for a product or service when they understand either (1) the quality of the product they’re getting and/or (2) the ethical ways in which the product is made or the service is rendered.
If there’s already trust built between the client and agency, there’s no need to go to great lengths to convey the high quality of the product. In many cases, it can be difficult to explain how our code is more organized, our features more thoroughly tested, or our strategy & alignment sessions more valuable.
When it comes down to it, you want to know that your product team is being treated well by their employer. This includes a competitive salary, paid vacation, and opportunities for professional development. We consider ‘full time’ to be 35 hours per week on client work, leaving 7 additional hours open each week for team members to focus on internal projects and overhead.
These benefits not only invigorate your product team to do their best work and improve as time goes on, but it also fosters a community of happy people.
What our clients have to say
Have you ever heard the saying “you get what you pay for”? This 100% applies to product teams. We’ve never claimed to be the cheapest option on the market. In fact, we’ve even shared some alternative paths for creating digital solutions that work well for those on a smaller budget. That being said, the companies that work with us continue to do so because of the quality of our teams. It’s how we’ve managed to maintain such a high retention rate with our clients.
Many have never seen a project fee laid out this way before, but they’re pleasantly surprised once they realize how focused it is around the outcomes and dedicated resources. For example, we can adapt to changing client scopes with no extra charge, but the project may need an extension to hit all the goals in the same time period. We know money doesn’t grow on trees, but we do a lot of due diligence to advise on the best possible use of the client’s budget.
“This pricing model empowers us and our clients to operate as partners, working towards a shared understanding we develop at the onset of our partner-driven relationship.”
-George Brooks, Crema CEO
Why does pricing transparency work?
We relax our standards of self-interest when someone explains exactly why they’re selling us something at a specific price point. By explaining the model of how we price things before revealing the total cost, we convey confidence that our methods for determining cost are fair. This can often ease worries on the client side, as allocation information is revealed upfront.
We encourage you to check out our blog post around the total cost of ownership for software projects for more information around pricing models.