Over the years I’ve seen a lot of proposals from professional services firms. Designers, architects, lawyers, consultants, and others.
Many of them included a small price list at the end. Here’s one from a recent proposal I received from a landscape architect I’m considering hiring:
These nickel and dime items have always rubbed me the wrong way. I’m about to pay someone many thousands and they’re about to bill me $0.15 for a copy.
Plenty of people bitch about ATM fees, but these copy and print fees feel even more obscene to me. I recognize paper costs money and toner costs money and machines cost money, but come on – isn’t this just part of the cost of doing business? It feels like they’d charge for bandwidth used to email you a file if they were sophisticated enough to track it.
Further, many of these professional services get annoyed when their clients cut back budgets or say they can’t afford this or that. But then the professional services themselves pinch pennies even tighter by trying to pass the cost of a piece of paper on to their client. The disconnect couldn’t be more obvious.
I can’t recall if I’ve ever actually been billed for any of these items, but it just seems unnecessary. Perhaps they are worried about clients that require thousands of pages or hundreds of plots. If that’s the case, ok – how about saying “After 100 copies, we will bill $0.15/copy” or something like that. Absorb the routine costs and bill the excessive costs. That feels reasonable and respectful on both sides.
At the end of the day another $15 here or $36 there isn’t going to break a client’s bank, and complaining about $0.15 feels petty – and in some ways it is – but these nickel and dime fees put up a sign that says “we’re passing every little cost on to you, no matter how insignificant.” That just doesn’t seem like the right way to start a business relationship.
Michael
on 24 Jun 09Yes, imagine if 37Signals counted contact photos as filespace or something else so asinine…
My employer is wrestling with the ATM fees question right now. They try to stamp out all the loopholes and end up stamping out all the business. People like simple bottom lines right now.
Cameron
on 24 Jun 09Are you still going to hire them?
B Harris
on 24 Jun 09As an engineer, I don’t see a problem with charging for “prints” of plans. On some small jobs, our clients have a bill for multiple sets of plans as large or larger than their contract. We don’t charge for standard 8.5×11, etc copies, but large formats cost us legitimate amounts of money, and must be passed on as a reimbursable to the client, unless otherwise negotiated in the contract.
J
on 24 Jun 09Expensive large format prints do make sense. $0.15 for an 8.5×11 does feel petty.
Joe Fusco
on 24 Jun 09”...from a landscape architect I’m considering hiring…”
Um, did you mean to write, ”...I was considering hiring…”?
Denny Deaton
on 24 Jun 09This reminds me of the airline industry. Every time I fly I am reminded of the constant add-on services you’re confronted with such as bag checking, on-board food and beverage services, etc. A “complimentary” drink or a bag of pretzels is something people have come to expect when flying. Sure airlines are struggling to stay in business and I don’t expect anything for free. But from a customer standpoint it would come off better to add $2.00 to my ticket price than to charge me for a drink when I get on board. In the end it’s no difference to the airline but is far more transparent to the customer, who doesn’t feel like they are getting their wallet out every time the fly.
Colin Summers
on 24 Jun 09I agree. And I think that for a consultant to charge me hosting costs is absurd. That should be part of THEIR cost of doing business, not mine. Even if I need a whole data center built, that’s their problem, not mine, right?
Actually, as an architect I have charged on occasion for prints. It’s always in the contract (not labeled like that with the nickel and dimes, just with a phrase about expenses being on top of fees), and occasionally we do enough prints that I feel the need to pass on the cost.
Another way to look at it is the disparity between customers. One asks for ten copies of their house plans to give out to contractors for bidding, each set is ten sheets of 24×36 rolling through the plotter. The other just wanted a schematic design to decide whether to purchase a particular plot of land or not and had only six plots during the whole job, most ideas went back and forth in email. Is it fair to ask the smaller client to subsidize the larger client?
Tathagata Chakraborty
on 24 Jun 09True, one should never charge these petty costs. I know of a case where after selling the customer stuff worth hundreds of thousands of dollars, the co still decided to charge them a few hundred for a couple of days of training session. Never do this.
JF
on 24 Jun 09One asks for ten copies of their house plans to give out to contractors for bidding, each set is ten sheets of 24×36 rolling through the plotter. The other just wanted a schematic design to decide whether to purchase a particular plot of land or not and had only six plots during the whole job, most ideas went back and forth in email. Is it fair to ask the smaller client to subsidize the larger client?
It’s not fair, which is why I suggested some sort of cap. Over X number of pages/plots/whatever, the fees are X, Y, and Z instead of suggesting I may get a bill for $0.30 cents for two sheets of paper.
None of this is a huge deal, it’s just how expectations are set. Asking someone to sign on the dotted line for 5-figures and then saying “BTW, we may also bill you 15 cents for a piece of paper” just feels like a bit of a slap in the face.
Eden
on 24 Jun 09If I see something like that, I’d probably figure this person isn’t doing very well financially and/or is extremely cheap. I’d look for another contractor.
Ari J. Rochmann
on 24 Jun 09I agree that this causes a large disconnect between businesses and their customers, especially in the airline industry as Denny Deaton mentioned. I remember being charged £4 while flying in Europe for a drink on RyanAir; one of the many reasons I now would rather pay extra for a quality airline in Europe.
Joshua Poulson
on 24 Jun 09Nickle and diming should only start if a client starts abusing the privilege, that’s true, but if you don’t put it all up there up front, then abusive customers only get more abusive.
Frankly, the a la carte list is fine if the representative you work with is empowered to waive the fees for reasonable requests. That’s where trust begins. Trying to nail it down with a number (“after the first 100 copies”) presupposes that every deal is exactly the same, and that’s a very limiting assumption.
Jason Klug
on 24 Jun 09I wonder what their administrative costs for tracking those nickels and dimes turns out to be…
Hard to imagine it’s worth their time unless, as you said, the copies are turned out in the hundreds (in which case a cap sounds like a sound solution).
Justin
on 24 Jun 09Has no one considered that they would probably never actually ask you to pay this stuff UNLESS you asked for an excessive number of prints, or specifically for costly prints? It’s easier to just write it in generally and forget about it until necessary, than to come up with some average amount and write it all into the contract.
They aren’t lawyers, after all… They’re landscaping people. They have better things to do with their time. Like “getting real” with your landscaping.
Pat
on 24 Jun 09I work at a design studio that offers digital printing, so no, those copy charges aren’t “just part of the cost of doing business.” It is our business.
Andy Polaine
on 24 Jun 09I hate this kind of practice too and ‘luxury’ hotels do it all the time. By contrast the Hoxton Hotel in London (which operates with a completely different service mentality) makes a point of not doing this – a reasonable amount of printing/copying is free, as is the wi-fi, etc., etc. Basically all the stuff that people complain about.
Ryanair’s practices are horrific and feel like you’re being pickpocketed by them all the time. The difference is that they sell themselves on being budget and bludgeoning you with the extras. It has got to the point, though, where it’s totally out of control. The result is that people fly with them because they feel they have to because of price, but absolutely hate the company, which isn’t a great branding and service exercise.
If the architects make their pitch in that way – “we’re budget, but you pay the extras” – then it seems excusable, otherwise it’s completely ridiculous and I wouldn’t use them.
Luis
on 24 Jun 09I know a wedding videographer that bills the client for any parking related fees he incurs on the day of the shoot. Dude charges 3K starting and then slaps them with a $6 parking fee? Wow. He also told me if he gets any speeding tickets he’ll bill them for it, because, as he puts it “If I’m rushing to get somewhere to shoot and I get a ticket, they should have to pay for it.”
I can’t believe he’s still in business.
George
on 24 Jun 09I think some feel that 37Signals does the same thing when they set limits on how many users you can have on a Backpack account, instead of just going by what really matters – storage/bandwidth.
Don Schenck
on 24 Jun 09Jason, look for my .05 “reading fee” bill soon.
Jay Shepherd
on 24 Jun 09Great post! A few months ago, I covered this same problem in the law-firm world over at The Client Revolution. See “Nickel-and-diming your clients.” It’s bad business in any industry.
Keep up the great work … and the great apps.
Jay
Benjy
on 24 Jun 09I’ve never quite understood why businesses do charge certain nickel & dime fees. Why not bill you a per day truck fee to cover their loan payments? Bill per minute for phone calls?
And to what extent have these fees gone down or been dropped as prices for technology, etc. have declined. It may have been extremely expensive to do some sorts of printing a decade ago that costs very little today.
Seems like it’d make the most sense to just increase the bid/fee to cover negligible printing costs and offer some sort of document package upgrade for those who require large amounts of high cost prints.
Wayne Robinson
on 24 Jun 09Had a meeting with my accountants the other day and they charged me $2 for coffee, from their own shitty espresso machine.
allan branch
on 24 Jun 09It costs more to track, record and bill for thos .15 cent copies than to just give them away or include them in the price.
Killian
on 24 Jun 09As a person who used to have to type in a 12 digit charge number when I wanted to make a single copy or a long distance call (!) – I can say that this process is also a major pain in the tail on the ‘enforcement’ side.
What is the overhead cost of counting vs just rolling it into your profit margin?
If some client is taking advantage of your normal business practice of providing free copies then you just charge them more hours- presto you probably make money.
Another side effect is it also caused many of our clients to write in clauses into their contracts that they would not be charged for these things.
jm
on 24 Jun 09Screenshot of a Romanian invoice for sending info via email. About 0.7 USD, to be payed to one of the state authorities one works with in the process of founding a company or other related administrative work.
http://www.mihaibrehar.ro/blog/cat-costa-un-email.html
Craig Bovis
on 24 Jun 09What happened to business being simple?
http://www.37signals.com/svn/posts/1757-a-reminder-of-how-simple-business-can-be-when-you-dont-make-it-complicated
;-)
Grant
on 24 Jun 09I had an employer who used to do this and it always rubbed me the wrong way too. We’d represent ourselves as a professional brand consulting firm and then line-item charge clients for prints of the work that comprised the final presentation to them. It seems so cheap and could easily be rolled into the overall price.
Noah
on 24 Jun 09I’m pretty sure that writing-off these expenses on their taxes is illegal if they force their clients to pay for them, yet I’m pretty sure they’ll do that anyway.
Seamus
on 24 Jun 09This is what annoys me about my phone bill. Not only do the attach extra monthly fees and “taxes”, but they fluctuate month to month. I don’t get this with other services and surely they must have the same types of costs.
PS: If you work at the phone company, do they pay your federal taxes on top of your salary since they pass along their taxes to consumers?
JF
on 24 Jun 09For the record, I’m not calling out this particular landscape architect or that one. It appears to be an industry wide practice that threads its way through a variety of related industries.
fitzage
on 24 Jun 09As a Mac consultant, I noticed that some of my competition in Tucson does this. I was checking out the websites of the competition, and one of them said that they would charge you for the cost of the stamp and envelope if you wanted them to actually mail you an invoice instead of emailing it.
WTF?
Terry Sutton
on 24 Jun 09Our lawyer invoiced us for printing when we bought our house. I instantly changed the way I looked at the lawyer, the firm, and the process. I went into it thinking I’d put all my lawyer jokes aside and make an unbiased opinion of a much maligned industry. But the $0.15 per sheet printing charge really didn’t work for me.
G Todd
on 24 Jun 09I worked at an architectural firm that billed the client for copies, long-distance phone calls, prints, etc. and it always rubbed me the wrong way. I think it is a hold-over from the days when blueprints, faxes, copiers and printers were REALLY expensive. The prices have come down so much and the administrative time has become so expensive today that I don’t think it makes sense anymore. Our long-distance bill was less than $20/month, so we just dropped it.
There must be a reasonable way to write the agreement so that the client can’t abuse the design professional by demanding hundreds of sets of prints without paying for them. On one recent project, the color copies, specifications and check sets ran into the thousands of dollars… none of it was covered in the contract and the firm had to eat it. Yikes!
Jeff Hartman
on 24 Jun 09Some printers have the ability to allow you to enter the account/job number in your print dialog box. Makes billing for this pretty simple. So depending on the size of the agency and formats for printing, doing the billing for prints is not that difficult.
Telling the customer the charge of $0.15 per BW copy on multi-thousand dollar jobs is kind of tacky though.
However, as some have said, if one of your deliverables is print, then I would probably expect to see that cost breakdown for the types of copies that come from higher-end printers.
Anonymous Coward
on 24 Jun 09Didn’t it work out with “Flyer Man” from a few weeks ago?
mikemike
on 24 Jun 09I ran two print shops for many years, and I’ll tell you. The real costs (typical) are as follows (assuming they have anything more than an HP InkJet, which they do if they’re doing engineering prints):
8.5×11 b&w – $0.007 (1.5 cents including paper) 8.5×11 color – $0.08 (8.8 cents including paper)
I don’t know what the big prints cost these days, but tell me that at least is not depressing.
mikemike
on 24 Jun 09BTW, you notice I didn’t put copies or prints. That’s because everything is digital (in the last 2 years, nobody has analog copiers anymore) which means that the costs for prints vs copies is exactly the same.
EH
on 24 Jun 09For a chunk of these anecdotes I’d blame the “cost center” mentality that pervades the brains of middle managers.
kwgainey
on 24 Jun 09Immediately after reading this post I checked my email and had an note from Vonage regarding a hike in their fees. Check out the interesting part:
The $0.50 increase I don’t have a problem with for the 911 system, which I didn’t include in the quote above. However, charging a fee to ensure my privacy and prevent identity theft seems asinine. If you have a web based business, that should be part of the cost of doing business.
Alessandro
on 24 Jun 09I don’t know…it seems to me that Jason and all the 37signals have this “I know how things HAVE to be”, just because, by now, they made money with an idea and work and a LOT of luck. As some months ago, when DDH (or DHD or …) said that web applications are the only way to go and desktop applications are things of the past: by now just 37s and a FEW others are making money charging customers online. The large part of money in software is done with desktop applications. That’s it. A lot of what come out from these guy’s mouth and blog is, lately, marketing. Maybe at first (ok, for sure at first) they were promoting a new vision in doing things, with Getting Real and all their ideas, but at the moment when they speak, it seams that the reason that what they say should be right is that, well, that they said that. And that, of course, they are really successful at what they do and make a lot of money. By the way this (the making of the money), for what history can teach us, is more an accident than a repeatable act of intelligence alone. So, don’t be so prone on Jason, David and the other Signal’s post/thought/ideas/....
Cody
on 24 Jun 09I don’t charge for hosting anymore. It’s too much of a hassle and hosting is pretty much a commodity service. Why bother?
Happy
on 24 Jun 09Jason,
Inquiring minds want to know: how did the “Captain Management Service Landscaping Service” from the flyer a few weeks ago work out? Certainly different work than what you’re talking about here. But it’d be good to know if simplicity really worked or if turned out like your roof guy and more info would have, in fact, been better.
JF
on 24 Jun 09Inquiring minds want to know: how did the “Captain Management Service Landscaping Service” from the flyer a few weeks ago work out? Certainly different work than what you’re talking about here. But it’d be good to know if simplicity really worked or if turned out like your roof guy and more info would have, in fact, been better.
It worked out great. We had some rain so the schedule was pushed back a bit, but they got the job done and did it well. I hired them for another quick project which they did just as well the next day.
Corey Wade
on 24 Jun 09Agreed. Working in the print industry, I try to cover all shipping costs on most orders within the contiguous United States. It’s the little things that matter and the customer remembers.
Mike Riley
on 25 Jun 09I think it really depends on how much you are paying for something, obviously seeing that exact same sign up on the wall at Kinko’s isn’t going to get you upset. At the same time I don’t think it’s as much about being nickel and dimed, as it is about providing a less complicated and “classier” experience. It’s really similar to the transaction conducted at high end restaurants, there is no pricing on a lot of the menus because money is almost supposed to be a non-existent variable in your dining experience. In the same way that during a 5 figure payout for whatever service, it’s not inconceivable that they would tack an extra $50 onto every bid to cover paper printing costs.
I see where you’re coming from, I just feel it’s improper, not offensive.
Jim
on 25 Jun 09Kinkos charges $.18 cents for a BW copy so that seems like not a bad deal. $1.00 for a BW print is crazy though
Ed Kohler
on 25 Jun 09To me, the biggest costs of fees like this are in the time spend accounting for them on both sites of the equation. They’re both a distraction in the relationship and generally too small to efficiently bill.
Joe
on 25 Jun 09You want to talk nickel-and-diming? Take a look at some of your plans. Holy artificial inflation, batman. They’re great apps, but not THAT great.
Legal Eagle
on 25 Jun 09As a patron of a local law firm, I would often provide my parking stub for validation when I visited the firm’s office. Parking was only $5, but I thought it was a nice gesture on behalf of the firm. However, I noticed a few months later that my detailed bill from this law firm included several “parking fees” from the previous months. These fees were several dollars more than the actual fee to park if I had paid cash. Huh..?
When I inquired about the fee, my contact explained how the building management charges more for tenants to park, since they assume you’re parking all day, and they were simpoly passing the fee along to me – their client. Why the hell would you offer to validate a parking stub, if you were simply planning to bill for it anyway..?
Needless to say, this was so absurd to me that I ended the relationship with the law firm, even though the dollar amount was nothing compared to thousands in legal fees. Optics matter…
Brenton Simpson
on 25 Jun 09I’m a freelancer working hourly. I know that it sometimes surprises clients when they receive a bill for 16.23 hours, but it doesn’t make much sense to me to bill any other way.
My time is my time. Whether I’m designing, building, testing, writing an estimate, or talking to you on the phone, it costs me the same minute.
I haven’t heard a good reason yet for rounding off my hours. I like to be transparent – getting paid what I earned, no more, no less.
Karen Theisen
on 25 Jun 09Why is this blog item relevant to what you do? Or has everyone at 37signals become experts in everything? Why don’t you stick to what you know and write about that? I don’t really care about your opinions about landscaping services and how/what they charge, to tell you the truth. Why is this relevant to your business and your blog?
Happy
on 25 Jun 09JF: It worked out great.
Glad to hear! Thanks for continuing to share the real-world insights from your successful business.
Deltaplan
on 25 Jun 09I am a freelance software engineer, and I have always refused to come to such ways of charging my customers. I always negotiate a price per day, all inclusive. (by which I mean, it includes my transportation fees, my hardware/software costs – even if sometimes I have to purchase a licence of a particular application for a single project, all my printing and postal costs…)
But I’m an exception in my profession… It’s becoming a bit problematic with some clients that don’t like the idea of not knowing EXACTELY what they’re being charged for, especially when it comes to the time they want to negotiate a bargain by telling me they will pay directly for some of these things (for example : paying directly for my hotel room, or sometimes even offering to have me sleep at their place instead, coming to my office for meetings instead of having me come to theirs, accepting a big software manual in PDF and printing it themselves instead of having me printing and assembling dozens of copies for their employees, etc…)
I even have had people who had sent me a parcel with their server inside, so that I performed its configuration at my office, instead of having me come to their office to do the work as it was planned, just to negociate a price reduction – even if I didn’t ask them to pay an extra for my transportation or hotel/meal fees…
Thomas Maas
on 25 Jun 09@Karen Thelsen
Of course it is relevant. And it’s not about landscaping services.
Ultimately, it’s about the way you communicate with your customers. The story you tell them by listing nickel and dime items on your $20.000 proposal.
And it’s the wrong story. It says “we will make sure we will get…” instead of “we will make sure you will get…”
Thanks.
GeeIWonder
on 25 Jun 09And it’s the wrong story. It says “we will make sure we will get…” instead of “we will make sure you will get…”
I think it says ‘we do this this and this, and if you want copies we can do that too.. but that’s not THIS contract is about’.
37signals deals with these issues in blog posts, explaining that they won’t accommodate every little request you make. Often they get proclaimed as pseudo-geniuses because of it.
Ryan Ripley
on 25 Jun 09I typically strike these sections from contracts and have never had 1 contractor or consulting company complain. I think these clauses come from lawyers trying to look clever. Legal documents, like software code need regular attention to avoid rotting…
Sean Fallows
on 25 Jun 09When I worked for a fire protection firm printing was planned as part of the job cost. Unless the job went way overboard the prints were built into the contract.
One area of working with other engineering firms or architectural firms is when you must pay to receive electronic copies of the Autocad drawings (not prints but drawings where sub contractors could use to produce their trade prints). So the client has now payed for design and other services from the firm but now that contracts have been awarded you must pay a fee to receive an email containing drawings. I have seen these fees range from $150 to almost $500, because of my past experience this poor practice will make me weary of these firms.
Catherine
on 26 Jun 09I used to be a landscape architect and these charges used to annoy me too! They were a pain to count and bill so I rarely did unless they got excessive, but even quoting the prices sends the wrong message as you point out.
I agree with you, we should have built in printing costs. Most of the time at the outset you know if the client wants b&w drawings, or huge colour laminated posters etc – these costs can be anticipated and included in the fee, with additional copies priced separately. Construction drawings can all be done at A3/11×17 size which is easy to print and much easier for contractors to handle on site in the wind/rain etc.
Adam
on 26 Jun 09“one of them said that they would charge you for the cost of the stamp and envelope if you wanted them to actually mail you an invoice instead of emailing it.
WTF ?”
Why WTF?
Something similar to this will probably be in our terms soon:
“If you do require a paper invoice there will be a fee of $2 on the invoice. For transparency, all of our customers are currently receiving e-mailed PDF invoices. This fee is purely to cover our costs on an individual basis moving forward and will not raise any extra revenue for us, but it does save us passing costs onto other customers through higher prices.”
If 100 customers decide they want us to start posting invoices, that’s $1200 per year that wasn’t an overhead before, which gets passed on to all customers. Seems a lot more unfair than the individual charge if you ask me.
Brad Farris
on 27 Jun 09Professional service providers always want to be considered “Trusted Advisors”. We want to get in early on projects where we can make the most difference; we want to be the one you call. (I’m not really talking about landscapers here as much as Lawyers, Accountants and other consultants.) Yet these kind of charges tell exactly the opposite story. It says, “We are not your partner, we are here to get paid.”
If you want to be a trusted advisor, all of your practices have to be aligned to communicate that. Bid a fixed fee, don’t add things on. Be fair and reasonable, that’s what partners do.
Mike
on 28 Jun 09I think it would be a creative way to deter clients from requiring paper, for environmental issues.
This discussion is closed.