ChargeBacks from Web Design Clients

10 years ago

Unfortunately, I found this was very common which is one reason I no longer do web design work.

Here are some things I used to do that helped.

1. Have a contract and spell out EVERYTHING you will provide for $x amount as the scope of work. Also be sure to specify that any edits or additional features requested beyond the scope of work will be at an additional rate of $x per hour AFTER the initial contract is completed. DON'T make edits or add anything until after the initial project is completed. I found a lot of times that "must have" thing they thought they wanted they realized they didn't once it was done. Or if they want to add a huge feature you know will take a lot of hours or work to complete, you can do an additional contract to cover it after the initial one is done. This helps assure them you complete your projects too.

You and your client both need to sign and date the contract and keep copies of it. Then if they ask you to do anything above and beyond the original scope of work, you refer them to the contract and your hourly rate. Also include a section they can sign when the work has been completed - this will give you at least some proof for potential chargebacks. I used to include x hours of edits or updates free of charge and then the rate was above that - just good customer service and selling feature.

2. Not sure what you want to decrease to a minimal level?

3. Chargebacks are VERY HARD for the merchant to win especially for services as you simply have no way to prove delivery. You can try to show your merchant provider the signed contract and completed line signed by them, though honestly, the best way to avoid chargebacks is to make your client happy which can be very frustrating with some clients.

4. Be sure to keep communication up with your client every day or at least several times a week. You might want to include in your contract that you will provide weekly (or daily depending on the length of the project) updates via email as to the progress completed that day. I find most of the time a legit client files a chargeback is because they feel you weren't taking care of them or wasn't actually working on their project or they think you have "disappeared" as they haven't heard from you since they gave you their $$. Giving them progress updates (and perhaps a development location for their site they can check for themselves) helps reassure them, though you just cannot please everyone - and some people will try to steal your work since they know how easy it is for them to win chargebacks.

Basically develop good contracts, work habits, and communication and it should help. Once you get a core of happy clients, they will help you with word of mouth.

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igrowyourbiz

10 years ago

You can solve all of your issues with the following 3 things

1) a clear presentation that puts whatever limitations you wish on your packages - your presentation is your website, your flyers, emails etc that describe your services

2) a solid proposal, one that will outline exactly what you will be providing. (number of pages, hours of time available, payment milestones)

3) A written contract that covers every little detail including refund policy and procedures.

I was homeless once, and grew a web design company from myself to 10 employees in 2 years - plus by the 3rd year was million dollar company. we had 100s of clients and only had 2 ever attempt chargeback...because of those 3 things, no one tried to charge back....and the 2 that did, they both lost because of those 3 things.

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Affiliatebuddy

10 years ago

Thanks both of you for reply.

Here is process. We send them a simple proposal and in invoice we give link to terms and conditions posted on our website which simply says this is not a refundable service.

Still people think after wasting our 40-50 hours of work, they can simply ask their credit card companies to reverse charges or paypal to reverse.

We are in constant touch with them. They actually want website of their own choice ( and choice keep changing).

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ecoverbee20

10 years ago

You need to use a contract and make sure to list how many revisions, edits they get.

Designcuts.com recently wrote an article about graphic designers and contracts, worth a read!

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AUKev 10 years ago

I use a two step process where I have the proposal stage whereby I give the potential client an estimate. If they accept the estimate, I then create a Statement of Work document which details each page of the site and what my company is responsible for and what they are responsible for. I also, define the cost for any deviations from the SOW with a cost per hour and no work is done without the clients acceptance of additional work.

You need to be VERY specific up front and have the customer sign-off on it. LITERALLY sign off on it.

I rarely do any website work under $1K anymore. If $1K or less, I will not do it unless EVERYTHING is detailed up front with a provision for additional cost should they vary from the original design.
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ronrule

10 years ago

Originally Posted by Affiliatebuddy

Hi

We recently started working as web design company and have 100+ orders in pipeline. $500-800 average order

Here are problems we are facing

1. People talk about informational website. Once work get started.. they ask a LOT of customization on all pages. 10s of edits. and still says they are not satisfied. Then they ask for coding /custom work or threat to charge back.

2. A lot dont understand scope of work. They think if they have paid 50% .. they own us. they can ask whatever and whenever. Then they are disappointed with us.

3. Those who have paid little extra... want us to custom each and everything. They go to microsoft.com or some big website.. check their features and ask us to deliver the same or refund.

A lot of them are filing chargebacks even after 50-100 hours worth of work. A lot of them are filing chargebacks after 5-6 rounds of edits.

Any suggestions on this. Or web design industry is like this only?

1. Is it usual?
2. How can we decrease it to minimum level.
3. How can we fight chargebacks and win.
4. How can we ensure that client does not file chargeback when we are already working on website.

Regards
AB

You might be interested in this thread...

[FREE, NO OPT IN] - How to never get burned by a client again

If you're getting that many chargebacks, you need better clients. Stop going after the bottom of the barrel... the people who pay the least demand the most.

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Mike Anthony

10 years ago

Originally Posted by ronrule

If you're getting that many chargebacks, you need better clients. Stop going after the bottom of the barrel... the people who pay the least demand the most.

Bam! On the money. I read the very first paragraph and knew this was the issue. Real business owners especially with offline presence do not act like this for the most part. I will bet money that where you are advertising and getting your work from is not where serious long term business owners hang out.

Ron is right too about the cheapest clients being the most headache. Since they have very little money they generally think its like buried treasure - their $20 is worth more than your $20 or $500 of your time.

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Affiliatebuddy

10 years ago

Originally Posted by Mike Anthony

Bam! On the money. I read the very first paragraph and knew this was the issue. Real business owners especially with offline presence do not act like this for the most part. I will bet money that where you are advertising and getting your work from is not where serious long term business owners hang out.

Ron is right too about the cheapest clients being the most headache. Since they have very little money they generally think its like buried treasure - their $20 is worth more than your $20 or $500 of your time.

what do you recommed. Should we continue selling for 600-800? and people keep asking a lot of customization on pages / features etc. They want templates to be edited thoroughly.

Do you think we can fix it anyway?

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RobinInTexas

10 years ago

Originally Posted by Affiliatebuddy

what do you recommed. Should we continue selling for 600-800? and people keep asking a lot of customization on pages / features etc. They want templates to be edited thoroughly.

Do you think we can fix it anyway?

I think in that range you might break it into 4 or 5 chunks. on the $600 project, produce 25% have customer say they're satisfied so far, collect 25%, go to next benchmark, and so on.

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ronrule

10 years ago

Originally Posted by Affiliatebuddy

what do you recommed. Should we continue selling for 600-800? and people keep asking a lot of customization on pages / features etc. They want templates to be edited thoroughly.

Do you think we can fix it anyway?

Raise the price... My firm didn't even do a basic Wordpress site for less than $4K, most of what we did was in the $8k-$15k range and never had a hard time getting clients. It's all in who you target.

If your only audience is expecting an $800 site, then you need to be super clear at defining what exactly they're getting up front, and offer more expensive options that allow for customization. A $600-$800 site should be little more than a template that you set up within the confines (fixed number of pages, number of words per page, etc.). ANYTHING else they need is either paid hourly, or have a higher priced package that they can bump up to. Giving your customers a clear understanding of what their money is getting them, and letting them pick their price/features based on that will eliminate all of your issues.

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kenzo22

10 years ago

It's important to talk about EVERY functionality and tell the client that only some small visual modifications are possibile within the price. Explain that adding more functionalities like CMS, Shop etc. is a lot of hard work and it will cost more to to this. Prepare an offer for informative websites and provide clients with list of features included. No less, no more. You have to be very precise

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tpw

10 years ago

You have the option of posting a "no refund" policy on your services, and so long as you enunciate your "no refund policy" clearly, PayPal will back you up in all chargeback claims, except when someone paid via credit card.

You should also state clearly in your Terms of Service how many edits a person can expect for the websites that you create for them. For example, "You are paying for a 5-page website, with approximately X number of words on each page, plus three edit orders. Additional edit requests will be invoiced at $50 an hour."

If you are taking 50% down, I would discontinue that practice immediately.

Once you have clearly defined your new Terms of Service on your website, then I would fight "all chargebacks." I currently do this in my business, because chargebacks indicate to your payment processor that you did not deliver on the promise you made on your sales page. If you get too many chargebacks, where you agree that you failed to deliver on what you promised, you will be making yourself a bigger risk to your payment processor and you may lose your payment processing capabilities.

Chargebacks are a serious concern to anyone doing business online. I fight all chargebacks, with the intent to win.

Further, if I remember correctly, PayPal does not offer buyer protection on services that have been completed.

On jobs that you currently have in the pipeline that you have yet to start, I would recommend that you update your Terms of Service in advance of starting work, and if your clients do not like the new TOS, refund the money and move on to the next one.

I hate refunding too, but the bottom line is that if they are not willing to agree to your very reasonable terms of service, then you may very well be refunding the very people who would be causing you problems later.

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internetmarketer1

10 years ago

I definitely believe that you should go more for clients who would actually appreciate what you are doing. Sometimes, it's the clients who have paid lower who have the most expectations, and those who gave freely will not have too much of an expectation.
I say get a contract and let them know that a refund is not possible.

Ever since if started selling web design as an upsell, I have never had a refund. Then again, I give them 2-3 chances on web redesign revisions, so maybe that is what helps.

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Peter Lessard

10 years ago

Been at it for 15 years, I recall two charge backs, one was a mistake the lady in accounting did not recognize the charge and the other was someone that had fallen on hard times and they were pretty much charging back anything they could.

The main issue you are running into is the type of clients you are attracting as others have stated. I do not have a great deal of experience dealing with these types of clients so cannot advise you how best to protect yourself against them.

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Mystery777

10 years ago

Originally Posted by plessard

Been at it for 15 years, I recall two charge backs, one was a mistake the lady in accounting did not recognize the charge and the other was someone that had fallen on hard times and they were pretty much charging back anything they could.

The main issue you are running into is the type of clients you are attracting as others have stated. I do not have a great deal of experience dealing with these types of clients so cannot advise you how best to protect yourself against them.

So how do you all exactly target the good and serious type of clients? I find there are cheapskates in most industries.

I'm not able to access the thread that ronrule posted the link to.

Any tips on how to go about targeting quality clients, other than increasing the rates? Maybe sourcing or prospecting screening tips?

Thanks.
.

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ronrule

10 years ago

Originally Posted by Mystery777

Any tips on how to go about targeting quality clients, other than increasing the rates? Maybe sourcing or prospecting screening tips?

Not really... price dictates value.

Truth be told, those $8K Wordpress sites I used to do could have been sold for $1,000 - we were selling based on our knowledge and experience, not based on time and labor costs. Selling those sites for $1K would have caused two problems: One, because I'd need 8 times as many customers (and be doing 8 times the work for the same money), and two because we never could have attracted the quality clients at that price. One thousand dollars is below their value threshold - in their minds, a site that cheap could never possibly be good enough to represent their company to the world.

It's the same mindset as when you're buying power tools... if you're the casual home user, you're fine buying the cheap stuff at Harbor Freight and if it breaks in a year so what, you throw it out and buy another one. But if you're running a business, your business RELIES on those tools. They need to do their job... so you'll pony up for the more expensive stuff, because you know that it will perform as expected under heavy use and you trust the brand will be around.

The same can be said for a corporate website; it will be their new customers first impression of their business. "Reputation" only matters to people who've already heard of you ... if I've never heard of their company, then I don't know what their reputation is, so their website is going to be my first interaction with their brand - and as a result, it needs to convey the same quality/value perception to me as their reputation does to a long term client.

That simply cannot be purchased for $600 - and businesses who understand brand perception know it. A $600 website tells me you maybe know how to make a website, but know nothing about all the other elements of business and brand positioning, so you couldn't possibly help me. A $6,000 website tells me you're experienced, and you must be bringing something to the table that most other designers don't. A $10,000+ website tells me you're the go-to guy, because you couldn't possibly stay in business charging those prices unless you were the best and really delivered something of value.

Not all businesses can afford, or even NEED, the best guy in town handling their site. But they don't want to use the cheapest guy either. Unless, that is, THEY TOO are 'bottom of the barrel'. Which is why that's all you're attracting at the low price points.

Raise the price, man. Sell your KNOWLEDGE, not your labor, because that's what good customers want to pay for. Labor is cheap... My 10 year old can figure out how to customize a Wordpress template, that has zero value. But my ten year old doesn't know what should be ON that website and how a brand should be positioned in front of its audience. Which do you think the business is willing to pay the most for?

You are not a web designer - you are a digital consumer engagement expert. Bill accordingly. Since you weren't able to access the WarRoom thread (where I posted the template), here's a link to the same doc on my site: How to Avoid Getting Stiffed by Clients

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Mystery777

10 years ago

Originally Posted by ronrule

Not really... price dictates value.

True. I actually meant *in addition* to increasing the price, because it's something I've already started to implement.

... and two because we never could have attracted the quality clients at that price. One thousand dollars is below their value threshold - in their minds, a site that cheap could never possibly be good enough to represent their company to the world.

Yeah. I know exactly what you mean. There are many such clients.

There's a firm in my city that charges rates very similar to yours. Basic 5 pages wordpress sites for $4k+ and above.. etc. Then they have some premium packages... over $26k+ per site -_-

Their clients are the type that'd feel offended if you tell them your rate for building them a web site is anything below $3k or such.

...and you trust the brand will be around.

That's a big one too. Not sure if it can be pulled off easily by new designers.

A $600 website tells me you maybe know how to make a website, but know nothing about all the other elements of business and brand positioning, so you couldn't possibly help me. A $6,000 website tells me you're experienced, and you must be bringing something to the table that most other designers don't.

The problem is that I don't see that much of a difference.

Are there specific web elements that these clients pay more attention to, to determine a site should cost much more than the other and such...etc.?

For eg. the premium websites that that company builds, I can do the exact same. Same excellent quality. But I wouldn't *dare* charge as much as they do.

At least, not at this stage since I'm relatively new.

A $10,000+ website tells me you're the go-to guy, because you couldn't possibly stay in business charging those prices unless you were the best.

So it's all an illusion. You just need to know how to position yourself.

Still, I don't think it can be easily pulled off by a newbie. These types of clients are not dumb. They like to do their homework.

You need your reputation. Your name should be googleable and dominating a good share of the local market. You should have been interviewed by the media or tech news sites. You should already have other big name clients under your belt. etc.

You are not a web designer - you are a digital consumer engagement expert. Bill accordingly.

I liked this title. Will add it to the "local marketing consultant" one. I try to make the approach as much as possible about local marketing consultancy right off the bat.

Web design is always just "one of the flaws" they have that needs addressing for solving their local exposure issue. Even if sometimes it's the only one taken care of.

UPDATE: Just noticed your new link ron.. Thanks.
Just read your post igrowyourbiz.... I was thinking the same.

.

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ronrule

10 years ago

Originally Posted by Mystery777

The problem is that I don't see that much of a difference.

The difference isn't about what the site looks like, it's about your knowledge of how the company should be presented. This goes beyond look and feel - I can buy a $40 Wordpress template that looks as good as a Fortune 500 company's site, but that doesn't solve the problem of what my website's GOAL is. Why would a customer visit my site? What are they going to get out of their visit? What am *I* going to get out of their visit? These are the kinds of things you should be leading the customer on, because most of them have no freaking idea what the right answer is.

Are there specific web elements that these clients pay more attention to, to determine a site should cost much more than the other and such...etc.?

You're still thinking like a laborer. Don't charge for time and materials, a fancy layer slider that takes 10 minutes to set up is worth the same as a page of written content that takes 10 minutes to write. That's why you can't charge for time... charge for the knowledge of when to use one over the other. Charge for knowing what should be IN that slider, or written on that page.

For eg. the premium websites that that company builds, I can do the exact same. Same excellent quality. But I wouldn't *dare* charge as much as they do.

At least, not at this stage since I'm relatively new.
...So it's all an illusion. You just need to know how to position yourself.

No, it's not an illusion, it's about identifying what your real value is beyond "look and feel". For me, it was eCommerce strategy, consumer engagement, lead generation,etc. Defining how the website should do those things is what I brought to the table, and what I charged for. The process of MAKING the site do those things is cheap grunt labor.

(To defer to a power tool example again, it's the difference in the pay-grade between the engineer who conceives and invents the tool as a functional concept, and the factory workers who make and assemble those parts.)

Often times we LITERALLY delivered an unmodified template as far as look and feel goes. It was how the site engaged the visitor - the use of images, text, what was said, how and where things were placed throughout the site, and overall customer experience - that made it worth the price. That's what our customers paid for.

For you, what it comes down to is deciding what kind of provider you want to be... do you want to build sites to the client's spec and follow their instructions? Or do you want to be the company that teaches them how their website SHOULD work, then delivers it? One of the two is a lot more profitable.

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igrowyourbiz

10 years ago

Lots of great advice on here, however, most of them hinge on "business development". I think it is clear this group is new to business and needs to learn a lot about providing services etc. Give them time to grow into it. While you CAN simply raise your prices, you also will raise the expectation of who you are dealing with.

The current level of service this group is able to offer will just give them more dissatisfied customers because they are not up to par.

You can't fake being an expert, being knowledgeable or being able to be a solutions provider or consultant. Well, you can sell it, but when it comes time to do the work, and the rubber meets the road, it will be obvious if you are out of your league.

Despite all the BS told in the IM world, you DO NOT walk into a NICHE and make yourself the "expert" or "go-to" guy. The real word does not accept unproven or self-appointed professionals.

You have to have the credentials, experience and most importantly, be able to bring effective results every time.

These guys definitely need to start weeding out the bad seed customers.

Price is not the only issue.

Want to pick and choose your customers?

1) set minimum standards and stick to them
2) do PROPER NEEDS ANALYSIS

a good needs analysis will filter out the yo-yos from the beginning.

People who are hard to please will show their true colors VERY early on if you have the right systems in place.

These principles are the same if you are running a dollar store or a bently dealership.

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ronrule

10 years ago

Originally Posted by igrowyourbiz

The current level of service this group is able to offer will just give them more dissatisfied customers because they are not up to par.

You can't fake being an expert, being knowledgeable or being able to be a solutions provider or consultant. Well, you can sell it, but when it comes time to do the work, and the rubber meets the road, it will be obvious if you are out of your league.

Despite all the BS told in the IM world, you DO NOT walk into a NICHE and make yourself the "expert" or "go-to" guy. The real word does not accept unproven or self-appointed professionals.

True, I'm answering with the assumption that he does actually know how to do more than create simple websites. That may or not be the case, but I've found most web designers have a lot more to offer than they know how to charge for. I made a lot of the same mistakes when I was first starting out (about 18 years ago now) and because the design/development process was so easy for me, it felt wrong to charge more than a few hundred bucks, like I was ripping the customer off. As my knowledge increased over the years, so did my prices as I had learned to charge for my knowledge instead of actual time/labor. Once you've figured that out, finding clients is a lot easier.

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Johnny Mathis

10 years ago

I'm not a web designer but reading these post made me realize from the businesses I have talked to from door to door sales.

Portfolios are a web designers proof . If you can sit and share with me a mix of 6k 8k 10k websites that you have designed and It looks excellent, than as an owner I can't question your abilities .the proof is in the pudding.

But if you are talking to me over the phone and I don't know you and you tell me 1k for a site and it doesn't look good. I would also chargeback because I don't know if I will ever hear from you again or this is a scam and I got suckered. Let me pull my money before you disappear.

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Entrecon

10 years ago

My initial thought as I read through the original post was "Stop providing crappy websites and crappy customer service"

The thing is you may be providing great service, but you need to make sure the client knows it. They may have expectations that you don't plan to deliver because you don't know they are expecting it.

As mentioned in another post, you have to have a solid contract. Back when I was doing sites, I had a 1 page proposal template that was my initial contact related to pricing and requirements. Once they agreed to it I had a multi-page agreement that spelled out EVERYTHING that I would do and that the client was expected to do. It also included timelines that floated based on when the client provided their information. I didn't tell them a project would be done on June 30, I told them it would be done 14 days after client provides all information.

So, from my stand-point, there are 2 things you need to do.
1. Clearly state exactly what it is that you are doing for them in a written contract.
2. Stay in communication and reference the contract in any dispute.

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misterme

10 years ago

Originally Posted by Affiliatebuddy

Hi
Here are problems we are facing

1. People talk about informational website. Once work get started.. they ask a LOT of customization on all pages.

2. A lot dont understand scope of work. They think if they have paid 50% .. they own us.

3. Those who have paid little extra... want us to custom each and everything.

You're not setting exact expectations for them to know what will be included and what is additional.

You're not educating your prospects correctly about the scope of the work.

And maybe you're not doing that because they won't buy if you do?

Why don't you simply offer a service that takes care of that and price it accordingly, for thousands and thousands.

Then offer the scaled down limited version if that's the client you want but at least they'll get a sense that if they want or ask for more, it costs more.

How can we ensure that client does not file chargeback when we are already working on website.

By not giving them any reason to.

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Affiliatebuddy

10 years ago

What should be ideal price for 10-15 pages website. CMS based. with a logo. When we have to run it like a company and not like a freelancer.

We have cost like
Marketing
Sales
Project Management
Designer
Developer
Support
Management.

Regards

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ronrule

10 years ago

Originally Posted by Affiliatebuddy

What should be ideal price for 10-15 pages website. CMS based. with a logo. When we have to run it like a company and not like a freelancer.

We have cost like
Marketing
Sales
Project Management
Designer
Developer
Support
Management.

Regards

I wouldn't touch it for under $4K, simply because that was the lowest I would go on any site, but I try not to price by the page. It's often hard not to, but some clients take that as an opportunity to combine data onto pages that should be separate. Others see it as "space to fill" and try to split information into multiple pages that really shouldn't be, because they feel like they're "paying for a 15 page site when they only need 7", etc.

Since the client should be supplying the content, the number of pages doesn't actually increase the amount of work that needs to be done. It's a little trick that makes their brain short circuit, because you're saying something different from everyone else they've talked to - if you've qualified your customer, you'll have an idea of how much work will be required on your end to give them the best possible presence. Knowing that it's probably going to be say a 10 page site, you can say something like this:

"We don't price by the page, because a limitation like that is an artificial barrier to creating the best possible web experience for your customer. Some companies can make the point in a single page and give the customer everything they need to make a decision, while others may need a few dozen pages in order for a visitor to fully understand what they're all about. Our approach is that instead of forcing you to think about your website in terms of cost of pages, your website needs to be whatever size presents your business in the best light - We measure our success by your success, so I don't care whether it takes 10 pages or 100, it won't affect the price. Our job isn't to just make a pretty website, it's to engage your audience, answer their questions, and convey a feeling of trust. When an existing customer sees it, they should feel like it accurately reflects the feeling they get from your business, and when a new customer sees it it should give them the impression that you're a credible solution to their problem. That's what we do differently than everyone else who just does what they're told and bills for their time."

Joe the plumber who wants a $500 website with a picture of a busted pipe and his phone number won't understand a word you just said.

A company that makes more in a day than you're charging for the site will - and they'll consider it money well spent when you throw a high number out there. If you only make $10K a month (or less than that) right now, then $10K probably feels like a big number to you, but it's really not to most businesses. Look at how many employees they have and just assume they're all making the median income... if they have 10 employees, they're paying out at least $40k a month just on payroll... their top line revenue is at least twice that, so don't think they can't afford you. It's not the price that's a barrier, they can write that check, you just have to convince them writing it to YOU is a smarter decision than writing 1/10th of it to your competitor.

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Mystery777

10 years ago

Originally Posted by ronrule

"We don't price by the page, because a limitation like that is an artificial barrier to creating the best possible web experience for your customer. Some companies can make the point in a single page and give the customer everything they need to make a decision, while others may need a few dozen pages in order for a visitor to fully understand what they're all about. Our approach is that instead of forcing you to think about your website in terms of cost of pages, your website needs to be whatever size presents your business in the best light - We measure our success by your success, so I don't care whether it takes 10 pages or 100, it won't affect the price. Our job isn't to just make a pretty website, it's to engage your audience, answer their questions, and convey a feeling of trust. When an existing customer sees it, they should feel like it accurately reflects the feeling they get from your business, and when a new customer sees it it should give them the impression that you're a credible solution to their problem. That's what we do differently than everyone else who just does what they're told and bills for their time."

Honestly, that's slick.

Joe the plumber who wants a $500 website with a picture of a busted pipe and his phone number won't understand a word you just said.

Well then, sucks for him... I guess when you've got a few high quality clients who appreciate your work, pay generously and don't have that nagging habit the other types of clients have... you won't much need uncle Joe anymore.

Many thanks for your answers Ron.

.

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ewenmack 10 years ago

Turn your business into a relationship one and get out of the transaction business,
because people don't refund relationships.

Best,
Ewen
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- Ron Lafuddy 10 years ago
  
  "Turn your business into a relationship one and get out of the transaction business,
  because people don't refund relationships."
  
  Say what?
  
  You've never heard of divorce?
  
  Thanks
  
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ronrule

10 years ago

Originally Posted by Mystery777

Honestly, that's slick.

Well then, sucks for him... I guess when you've got a few high quality clients who appreciate your work, pay generously and don't have that nagging habit the other types of clients have... you won't much need uncle Joe anymore.

Many thanks for your answers Ron.

.

No problem man, I would also add that "Mom & Pop" aren't always as broke as they may appear in their business environment. This is especially true for restaurants and service industry providers, and they're actually pretty easy to profile.

First, take a look at their location - see what comparable space in the area rents for, and how many people work there. That will give you a rough idea of their base level overhead. Pay attention to the presentation ... if their property is well maintained, well decorated, etc. then the owner of that business recognizes the value of presentation. That understanding will extend to the web, so your message will resonate with them better than it will with a business operating from a dirty steel building with dents in the side, letters faded on their sign, and pot holes in the parking lot.

If it's a restaurant or other business that gets foot traffic, spend an hour there at their busiest time of day and count how many people go in and out or count the number of tables. Use that as a bench mark and multiply it times the number of busy hours (restaurants peak at noon, then again from 6 to 9), then multiply that times the average price those customers are paying, and you'll have a rough idea of what they make on an average day. You might be surprised to learn that some mom & pop restaurants are pulling in $50K a day or more... a $10k website that accurately reflects their business is NOTHING to them.

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Mav91890

10 years ago

Why not just cash checks instead?

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savidge4

10 years ago

This would be my over all strategy in this situation.

#1 I would stop getting any and all new work. I would muddle through and get all the work you have in the pipes completed.

#2 In the meantime the management team needs to be looking at the fact that you have 50 to 100 hours of labor in site building, that you are getting paid $500 to $800 for.

#3 Determine the exact points of failure. Look specifically at what you are offering, and what the clients are asking for, how is your contract wording aiding in this happening.

#4 Understand the language that is being used, and used against you. I am going to bet that the term "Satisfaction" is floating around quit a bit. You WILL NOT win a chargeback if you are offering "Satisfaction"

#5 A major re work of what it is you offer and how you offer it needs to take place.

#6 Through the use of #5 and the writing of a clear and concise contract needs to take place. ( This contract needs to be sent to the client prior to work beginning and SIGNED, and returned. )

#7 A system of checks needs to put in place. If you have 100 sites in the pipes, you are not 1 or 2 people cranking these out. You need your folks to specialize. A design team, A graphics team, A text team, a customization team etc.

#8 Create a work flow between these teams. As the project moves from one team to the next, develop a method of getting the Client ok for the step completed. ( Each step that is okd by the Client, reinforces the yes I like it mentality. ) Each one of these "Ok's" can be used later in case there is a chargeback

#9 Remember, you are not offering a service, you are offering a product. It is THIER product, it is a CUSTOM product. You are well within your rights to NOT offer a refund based on this alone - Including and not limited to Credit Card Companies. This is something that has to be spelled out SPECIFICALLY in your initial Contract.

#10 Final Payment must be paid PRIOR to your install team placing the site on the clients server.

These are basically the steps that I personally follow. I send the files back and forth using PDF files, and at the bottom of each page the initial each page, and at the end, they sign. Then I move to the next step.

The 1 time that a client TRIED to back charge me was settled rather quickly with 15 signed documents attached e-mail sent to the credit card processing center. Done said and over. They even refunded me the $10 dispute fee!

Hope that Helps!

Originally Posted by Affiliatebuddy

Hi

We recently started working as web design company and have 100+ orders in pipeline. $500-800 average order

Here are problems we are facing

1. People talk about informational website. Once work get started.. they ask a LOT of customization on all pages. 10s of edits. and still says they are not satisfied. Then they ask for coding /custom work or threat to charge back.

2. A lot dont understand scope of work. They think if they have paid 50% .. they own us. they can ask whatever and whenever. Then they are disappointed with us.

3. Those who have paid little extra... want us to custom each and everything. They go to microsoft.com or some big website.. check their features and ask us to deliver the same or refund.

A lot of them are filing chargebacks even after 50-100 hours worth of work. A lot of them are filing chargebacks after 5-6 rounds of edits.

Any suggestions on this. Or web design industry is like this only?

1. Is it usual?
2. How can we decrease it to minimum level.
3. How can we fight chargebacks and win.
4. How can we ensure that client does not file chargeback when we are already working on website.

Regards
AB

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squidface

Banned 10 years ago

Sadly, it's common.

Look, when you have hundreds of clients you are going to face huge headaches.

80/20- rule.

sadly 80% will try to rip you off and 20% are great.

So, build a business on just 10 clients. Then wittle it down each time until you get you ideal 10.

it's a sad fact of lie, if you can be crewed you probably will be.

ThaT'S WHY BANKS/HIGH FINANCE OPERATE ONLY WITH 100% SAFE PROCEDURES. THEY KNOW IT, SEEN IT ALL BEFORE.

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squidface

Banned 10 years ago

Crumbs guys/gals...i have to ask why do you chase such small business? Do you love being busy and grinding it out for small money? I see a lot of people/businesses like that. "i am busy = i am good"

Go for $10,000+ clients 1 per month.

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squidface

Banned 10 years ago

Yes you can safely say anyone scamming you ( charging back) for measley $2,000 or less are broke. Either that or as tight as a ducks ***.

Contrast that to say some high roller that blows $500,000 on a weekend in Vegas

Or a company that spends $500,000+ on "entertaining"

it's a different league and they won't be bothering with such poor man's games.

Stop wasting your time, effort and getting frustrated with such people/businesses. it's like trying to sell "self help courses down in the ghetto"

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savidge4

10 years ago

Everyone says to keep getting better clients. Better paying clients.. you suggest the OP is wasting his time.. well really look at the numbers and this business you are downing is probably grossing somewhere in the $1,000,000 USD per year range. I am going to guess that it is located offshore somewhere and the overall expense is probably not even half of that.

THIS is a business. All it needs is some checks and balances in place, and it is a scalable money maker. Getting rid of the hick-ups and this is a Million this year and could possibly be 5 Miliion in a few years. But hey that's to much work.. go where the money is at!

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ronrule

10 years ago

Originally Posted by savidge4

Everyone says to keep getting better clients. Better paying clients.. you suggest the OP is wasting his time.. well really look at the numbers and this business you are downing is probably grossing somewhere in the $1,000,000 USD per year range. I am going to guess that it is located offshore somewhere and the overall expense is probably not even half of that.

THIS is a business. All it needs is some checks and balances in place, and it is a scalable money maker. Getting rid of the hick-ups and this is a Million this year and could possibly be 5 Miliion in a few years. But hey that's to much work.. go where the money is at!

Sure, if you have an endless supply of cheap labor or automation to support it. But that isn't the case here... this is someone doing custom work, spending real hours, and paying other people to spend real hours. Time isn't infinite or free, even when labor is cheap.

There's a guy who's made over $3 million on ThemeForest selling $55 Wordpress themes; but he did it by selling 55,000 copies of his theme, not by making 55,000 themes.

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savidge4

10 years ago

Ron,

That's kind of a narrow view on the reality of the scenario. The guy that sold 55,000 copies of a theme probably has somewhere in the neighborhood of 1000 hours in development. He has probably on average of 200 hours a year in upgrades and fixes. Especially this year with the MAJOR WordPress upgrades the hours may be greater!

And those numbers are just to keep the theme running. Now lets look at the support aspect. This guys time is worth the same regardless if he is sitting there programming fixes, or offering support. On the support side he is probably working 10 hours a day 7 days a week. that puts him in the 3600 hours a year area for support alone. then add the 200 hours in fixes and upgrades... Its not so scalable anymore now is it?

A decent designer, and considering your example states this guy sold 55,000 themes would suggest he is decent. we are looking at what $100 an hour? you do the math now... that theme is in labor alone costing $300,000+ a year. Add some partners in there and then what? 3M is NOTHING The guy is making house payments and the like and hasn't had a vacation in the last 5 years.

So how do I know this? I have 4 silly little plugins that take up a good 4 hours a day of my time. 2 of the damn things are free, and do nothing but cost me money. It is truly amazing how someone can screw up the simplest of things, and the recent wordpress and woocommerce updates kicked me in the teeth basically.

Have you noticed that the number of themes and plugins has dropped in the last few months? its simply because it was not worth it for developers to make the changes. This is the same reason Woo Themes back stepped on their life time support earlier this year. It is down right time consuming and expensive, to not just develop a product, but to support a product.

So back to this guys business. As the OP stated they have placed them selves in a position that is allowing the clients to bally strong arm them into the customization. They obviously don't have any type of automation in place. I am going to bet the have a pool of programmers and they hand each project off to 1 programmer from start to finish. In the model they have that will NOT work. They have no standardization. And that in itself is probably their #1 issue.

I have recently stepped into the lower market a bit offering WordPress sites. I only have 4 themes I use. I have templates and the CSS to make those at the ready. All I have to do is change some colors add a logo and its 50% done in a matter of less than an hour. I personally don't have 50+ hours in a wordpress site, I have 10 maybe. BUT, I have a system, I have standardized my process.

My system would be very scalable, and that is my not so long term goal. Developing WordPress plugins and Themes...NOT scalable at all!

Originally Posted by ronrule

Sure, if you have an endless supply of cheap labor or automation to support it. But that isn't the case here... this is someone doing custom work, spending real hours, and paying other people to spend real hours. Time isn't infinite or free, even when labor is cheap.

There's a guy who's made over $3 million on ThemeForest selling $55 Wordpress themes; but he did it by selling 55,000 copies of his theme, not by making 55,000 themes.

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ronrule

10 years ago

Originally Posted by savidge4

Ron,

That's kind of a narrow view on the reality of the scenario. The guy that sold 55,000 copies of a theme probably has somewhere in the neighborhood of 1000 hours in development. He has probably on average of 200 hours a year in upgrades and fixes. Especially this year with the MAJOR WordPress upgrades the hours may be greater!

With a $3 million take, that 200 hours per year works out to about $15,000 per hour. Still a better gig than making sites.

And those numbers are just to keep the theme running. Now lets look at the support aspect. This guys time is worth the same regardless if he is sitting there programming fixes, or offering support. On the support side he is probably working 10 hours a day 7 days a week. that puts him in the 3600 hours a year area for support alone. then add the 200 hours in fixes and upgrades... Its not so scalable anymore now is it?

Sure it is ... even at 4,000 hours spread out over a year still works out to $750 per hour. That's almost twice what the most advanced SAP developers charge, and they rarely have full time employment at those rates. And WAY more than any web designer charges.

A decent designer, and considering your example states this guy sold 55,000 themes would suggest he is decent. we are looking at what $100 an hour? you do the math now... that theme is in labor alone costing $300,000+ a year. Add some partners in there and then what? 3M is NOTHING The guy is making house payments and the like and hasn't had a vacation in the last 5 years.

You're making a lot of assumptions here... it's one guy who made a really good theme and sold a lot of copies. It's still selling new copies every month, and he updates once a month or so to compensate for Wordpress updates and add new features. He isn't working 10 hours a day or skipping vacations, he's pretty pleased with the outcome.

So how do I know this? I have 4 silly little plugins that take up a good 4 hours a day of my time. 2 of the damn things are free, and do nothing but cost me money. It is truly amazing how someone can screw up the simplest of things, and the recent wordpress and woocommerce updates kicked me in the teeth basically.

Have you noticed that the number of themes and plugins has dropped in the last few months? its simply because it was not worth it for developers to make the changes. This is the same reason Woo Themes back stepped on their life time support earlier this year. It is down right time consuming and expensive, to not just develop a product, but to support a product.

This I agree with to some extent, but it comes down to the size of the client base. If you sold 100 or 1,000 copies of a plugin and you're working like a dog to maintain it, it's a bad deal. Sell 50,000 and it's not such a bad deal. Companies like Microsoft have millions of man-hours in updates and fixes that they aren't getting paid for, and still manage to be profitable. Sure, Wordpress is going to throw you a lot of Curveballs and if your plugin is an extension of another plugin (WooCommerce in your case) you're taking on double the risk because there are TWO third parties that can mess your crap up. But if the size of your client base supports it, it's worth the long term investment.

So back to this guys business. As the OP stated they have placed them selves in a position that is allowing the clients to bally strong arm them into the customization. They obviously don't have any type of automation in place. I am going to bet the have a pool of programmers and they hand each project off to 1 programmer from start to finish. In the model they have that will NOT work. They have no standardization. And that in itself is probably their #1 issue.

I have recently stepped into the lower market a bit offering WordPress sites. I only have 4 themes I use. I have templates and the CSS to make those at the ready. All I have to do is change some colors add a logo and its 50% done in a matter of less than an hour. I personally don't have 50+ hours in a wordpress site, I have 10 maybe. BUT, I have a system, I have standardized my process.

My system would be very scalable, and that is my not so long term goal.

What you're describing is a different business model than what the OP described. You've got it down ... you're selling templates with minimal customization and sticking to your policies. He's selling custom work, not sticking to any policies, and jumping through hoops to satisfy the customer. If he wants to do it your way, sure, he can win. But if he wants to do it the way he's doing it, he needs to charge more. Your model is a potential solution to his problem, but it requires a change in the way he conducts business. The rest of our suggestions (raising the price) require no change to the way he does business, and will weed out the low paying customers. He could apply either strategy and come out ahead, but he needs to pick one - not ride the fence with aspects of both.

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savidge4

10 years ago

Originally Posted by ronrule

What you're describing is a different business model than what the OP described. You've got it down ... you're selling templates with minimal customization and sticking to your policies. He's selling custom work, not sticking to any policies, and jumping through hoops to satisfy the customer. If he wants to do it your way, sure, he can win. But if he wants to do it the way he's doing it, he needs to charge more. Your model is a potential solution to his problem, but it requires a change in the way he conducts business. The rest of our suggestions (raising the price) require no change to the way he does business, and will weed out the low paying customers. He could apply either strategy and come out ahead, but he needs to pick one - not ride the fence with aspects of both.

That's is the thing, I think we have the same business model. I just have control over mine, I have a system, I have standardization, and he doesn't. I believe he wants what I have, but doesn't understand the dynamics of getting it. The only reason he is customizing, is because the clients have him over the tree limb. If he doesn't do it, they will dispute. Its one of those situation where you have to ask... how many times do I have to do it this way and expect a different result? well the different result is not coming to him, but he keeps on doing. Its insanity really!

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Dhira

10 years ago

CHarge $50 per request/ change after 5 free changes.
That usually stops it real quick...

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Affiliatebuddy

10 years ago

So are we reaching on some kind of resolution.. What should be answer to this problem.

Here are few things to achieve

1. Getting bulk orders.
2. Doing standard websites ( not custom). However client dont understand difference.
3. Smooth Delivery.
4. Recurring Business.

Do you guys think that it is possible to scale it to 100s of orders a day and still delivering smooth?

Regards
AB

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ronrule

10 years ago

Originally Posted by Affiliatebuddy

So are we reaching on some kind of resolution.. What should be answer to this problem.

Here are few things to achieve

1. Getting bulk orders.
2. Doing standard websites ( not custom). However client dont understand difference.
3. Smooth Delivery.
4. Recurring Business.

Do you guys think that it is possible to scale it to 100s of orders a day and still delivering smooth?

Regards
AB

Yes, but you need to be highly automated. Build out a handful of templates for layouts, and then only customize the graphical elements within those layouts so you can deliver in a timely manner. Anything beyond that is custom work and should be billed separately.

As for recurring... if you're targeting mom & pop businesses who want cheap websites, I'm not sure how much room there is for recurring business other than hosting fees.

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savidge4

10 years ago

Getting bulk orders: you stated you have 100 jobs in que. sounds like you already have that.

Doing standard websites ( not custom): In the customers eyes each site IS custom, on your end, they are standardized. As an example I use the wordpress Mystile theme quite a bit. I have 4 standardized layouts with this 1 theme. The one thing I am doing now is I have created a private forum. on this forum I have it broken down by theme and layout. in each category I have "custom" pieces of code that can be referenced and inserted. I don't have say 10 different programmers programming the same "custom" code over and over. it is right there. if its not there, then it goes off to a specialized programmer that works that out. ( and there is a charge for that ) The more of this you do, the larger your database becomes, and the more "Custom" your work becomes, but again you are only working this out once ( and charging ) after that it is drag and drop!

Smooth Delivery: I have a person that does JUST THAT. Client gives a final ok while the project is on my server. Final payment is made, and then it is moved to their server.

Recurring Business: Nice to have, but in my years the % of this is small. you are basically in a turn and burn industry.

Can this be done 100's of times in a day? if you have the man power and the system behind it to make it happen then YES. Me and 4 other people are up to about 12 a week right now. And that's really not even pushing it, there is without question room for more.

Originally Posted by Affiliatebuddy

So are we reaching on some kind of resolution.. What should be answer to this problem.

Here are few things to achieve

1. Getting bulk orders.
2. Doing standard websites ( not custom). However client dont understand difference.
3. Smooth Delivery.
4. Recurring Business.

Do you guys think that it is possible to scale it to 100s of orders a day and still delivering smooth?

Regards
AB

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Affiliatebuddy

10 years ago

for now. .i am doing it wrong i believe.. selling them whatever they ask..

Do you think we need to show design before selling or after selling?

What kind of information we should let them know before they buy.

What should be ideal price so it can be scaled.

What about those clients who does not understand custom/programming/development words after they buy it?

Regards
AB

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