I have been contemplating the idea of actually charging for ideas, and not just charging for implementing the ideas. Yes, they are two different things.
For as long as I can remember, my company has been creating business models with our clients from day one. It doesn't matter the type of business, the sector or if it is an old business or a new one. Many, not all, but many, of our clients use us as a think tank for ideas on how to improve their business or develop new products or messages or brands or backend processes for their business.
Our practice for billing for those ideas has been... Okay, we came up with an idea - you like it, now we will charge you for implementing that idea on a software level. But we never really charged for producing the idea, itself, as an idea that goes to market. Tons of companies do it, they are called Marketing Companies, Branding Companies, and so on. Some charge hundreds of thousands for coming up with a brand concept, logo and so on. We, we just charge for the actual dirty work, in terms of putting it together but not for helping conceive the brand or idea.
Why am I blogging this now? Well, yesterday, I brought in four of my RBers into a kick off meeting with a new client. We came out of the meeting designing a whole new marketing pitch, concept and a brand new domain with tons of awesome ideas on how to promote the site and business. Maybe, in a few months, when we launch the new brand, Ill let you know what it was - and reference back to this post. But for now, I can't talk about the specifics of the business.
As we came out of the meeting, we thought to ourselves - once again... Hmm, we just helped them put together an awesome branding strategy. Yes, we are going to implement the whole strategy in a technical sense - by coding it up for them. But, in terms of payment for creating the new brand - we get nothing. This happens all the time and I never feel upset or cheated. I feel happy for them and for us - we just built a long term relationship in one sit down meeting with this client. But, on the other hand, maybe we should charge for it.
In the next few months - it might be something we actually stick a price tag on. But, one thing is for sure, our current message on our rustybrick.com site, really doesn't show that we can and do provide ideas as a service. So maybe we will launch our new site with some content focused on that as a service as well - if we ever launch it.


Comments
I went through this all the time back when I did tech.. And then again when I first got in to jewelry design.. We found that a lot of our clients were using us for our design ability and then heading over to some cheap hack to actually make the piece for them.. Much like quoting software dev, or website dev..
Three years ago we started actually charging for design time and letting the client have the design at the end of that time.. If they used us, great.. If they took the design down the road and had someone else implement it, fine..We still got paid for our part in the process..
After three years we have found that the tire kickers have all but vanished and I have a sum total of less than 5 designs sitting in my box that were never made, at least by us.. Our close rate jumped dramatically and we don't have to deal with cheap people that just want to pick our brains because we are the best at what we do in the region..
Posted by: Feydakin | April 8, 2008 10:12 AM
Just to clarify... We don't produce designs for free. I am just saying ideas... I.e. We think this is a good avenue for your business or here is an idea for your business. Only spoken words - charge for words we speak. We always charge for design.
Posted by: Barry Schwartz | April 8, 2008 10:26 AM
I understand, but in jewelry design the line between talking about a design and sketching it out is incredibly blurred..
Posted by: Feydakin | April 8, 2008 10:32 AM
Got it.
Posted by: Barry Schwartz | April 8, 2008 10:41 AM
Hi Barry,
One way around this might be charging the client for the consultation/brainstorming time necessary to put the concept together. We have had some success working in a "branding" consultation capacity wherein we help clients develop the preliminary ideas and naming conventions, etc.
It's certainly valuable - as the client would be back at square 1 w/o your work. Plus look at the time you and 4 RB'ers put into that meeting - time you could have been billing to other clients, I'm assuming - right?
Posted by: Carrie Hill | April 8, 2008 10:42 AM
Carrie,
Yea, so - we did bill for that time. 100% - or at least we should have...
But it doesn't really matter if we spent let's say 1.5 hours multiplied by 4. The ideas we came up with in that room, may be worth 200 times what we actually billed for in hours.
Posted by: Barry Schwartz | April 8, 2008 10:47 AM
I remember those days.. It was very hard for me to separate myself from the rate I charged vs the return the client got..
I had one client that had an idea (sending money to Mexico for day laborers) and we developed the software for him.. A lot of time invested over 3 years.. His company went from 4 guys in one office to having 70+ remote locations in three states taking in money for transfer.. When it came time to "upgrade" to more robust equipment he dumped us for someone that charged him a lower hourly rate..
When they failed miserably he wanted to hire us to come back and save him and being mad and full of ego, and ready to quit doing tech anyway, I said no.. Looking back I should have said yes and raised my rate :)
I'm not suggesting that this is an issue for you, but there were times it was very hard to watch our ideas and methods make someone else very wealthy while we got paid hourly.. Even moreso after sitting with them for a few hours for free..
Posted by: Feydakin | April 8, 2008 11:07 AM