While considering various topics for this month’s post, I was sitting on a Southwest flight and noticed their “Transfarency” tagline printed on my napkin, which made me think of our own efforts to offer transparent pricing to our customers.
The question of transparency is raised every time a new broker evaluates the TRIBUS platform. Whether you’re already a customer or a brokerage who’s considering moving to one of TRIBUS’ fully custom real estate brokerage websites, and comparing our costs with other real estate tech vendors, here’s the philosophy behind our transparent pricing model.
Project-based pricing didn’t work for us
Up until a few years ago, TRIBUS built custom real estate brokerage websites on a fixed-cost basis. We’d review the client’s needs and create the complete specifications document up front, then determine a price for the entire project.
While that may work for some companies, the negatives far outweighed the positives for us. Here are a few of the biggest issues we faced while using a project-based pricing model.
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- Valuable time is spent prematurely. In order to determine the correct project price, many hours would be spent creating a ~70-page functionality document before a contract could be signed. This makes it more difficult for the broker to quickly compare different vendors and determine whether or not the project fits within their budget.
- You shouldn’t be forced to “use it or lose it.” No matter how carefully the vendor scopes out a project up-front, original estimates will never be exactly the same as the actual costs. For every project, that means that the client could have either overspent or underspent – either of which can cause friction between the client and the vendor.
- The client can feel penalized when changes are needed. When you’re building custom software, changes will come up and that should be okay. However, if everyone has committed to a set project for a set price, any deviation from the original plan can become very difficult.
It takes trust
If you’re used to project-based pricing, it may seem risky to switch over to an hourly billing model. It can feel like you’re signing a blank check and giving up all control on your final bill. However, that doesn’t have to be the case.
Here are a few things we’d recommend during your vendor selection process:
- Be up front about what’s most important to you. Is it the timeline? Features? Or cost? If keeping your costs as low as possible is your top priority, we can build a “safer” project plan to eliminate (or hold off on) features where the build hours are most likely to fluctuate.
- Start small and add as you go. The larger the project, the more your project hours are likely to change (don’t forget that “change” could be higher or even lower than the original estimates). If you can begin by building a more basic project, or “Minimum Viable Product” (MVP), you’ll know your final costs much sooner and can decide whether or not you’d like to continue adding features after that.
- Talk with other customers. Ask other customers about their experience with project pricing. We want our clients to look back knowing that, although some costs likely changed, they were well informed before a change happened and always had the opportunity to change their mind if they wanted to eliminate something from the scope.
The estimation and scope process is important
The project outline
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We begin with a scope call to understand the main goals and discuss some of the project specifics. After the call, we’ll spend more time reviewing the brokerage’s current website and key project features before we assemble a project outline. Once we have the outline, we can itemize each custom feature and create the estimated project timeline and cost.
From there, we usually go through a few different revisions of the proposal — adding more detail for the most important functionality and ensuring that no obvious needs were missed. With each new version of the proposal, our cost estimate become more and more accurate.
The Scope of Work
Once we’ve included all the client’s must-haves, the project outline gets packaged into the agreement as the “Scope of Work” along with the final project estimates.
Once signed, the Scope of Work remains a living, breathing document that TRIBUS continues to update while we go through the visual designing process with the client. Should the client choose to add, remove or change anything, we’ll notify them of how project hours are expected to shift.
We’re agile and honest
Typically, a broker’s biggest fear is not that the final project cost can be higher than they originally planned for. Instead, their biggest hesitation comes from signing up for the unknown.
After managing many projects under our hourly pricing model, a few things have consistently proven to be helpful for our customers.
Time gets logged while work is done on each task
Our clients will never get a bill for full working hours multiplied by the number of days we spent on their project. Instead, we itemize every feature in a task list and run a timer while work is being done (we don’t just guess after the fact). If we take a coffee break, that break would be reflected in our time logs. If something unexpected came up, that would be accounted for in our project notes.
The client receives 24/7 access to our project system
The broker should never feel in the dark about what’s going on or where their bill currently sits. Not only do we maintain very detailed project notes, task lists and time logs; we invite the client into that system with us. From the day the project kicks off, you’ll see every task we’re working on, along with every time entry.
Project notifications are sent often
Our online project portal is really helpful to keep everyone in the loop, but it doesn’t replace our need to proactively keep the client informed about important project updates. Our clients receive messages each week from their project manager, which include general updates as well as important hour estimate changes so that the client can choose how they may like to adjust the plans.
If a mistake was made, we’ll make it right
With the theme of building trust, this is an important one. There have been times when we’ve really underestimated a feature or did not make it clear enough that a certain estimate was likely to change. In these cases, the long-term relationship with the client is the most important thing to us, so we’ll do whatever we can to make sure no client feels like they’re being taken advantage of.
