A True Story of Value vs. Hourly Rate tells the (true) story of a client who did the math. Enterprise Data & Analytics – charging more per hour – was delivering more value than an offshore team charging less than half our rate. Granted, the lady who did the math is a math major. But still.
To quote the sage wisdom of Foghorn Leghorn, “Figures don’t lie.”
“My name is Andy and I’m an engineer.” In case you’ve never spent time around an engineer or overheard one of us interacting with others, we have a reputation for being… direct. (Direct is the nicest word I could think of to describe many of us. Brash, harsh, rude… these terms all come to mind.)
Not all, but many engineers do not prioritize emotion. Many engineers are solution-focused to the exclusion of, well, many things that may actually improve the solution – things that would almost certainly reduce the time required to achieve said solution.
Meetings With Potential Clients
My engineer-y skills shine when meeting with potential clients. By “shine” I mean I often say things that are not at all helpful to Enterprise Data & Analytics‘ potential client and are most often not-helpful to closing the sale. One such saying is…
“Think of the money you saved!”
When do I say, “Think of the money you saved!”? Usually when the potential client is describing a previous solution that did not solve the problem they were trying to solve. If I had a nickel for every time I have heard someone describe the factors that led to the decision to hire someone to fix the problem and that cost (per hour) tipped the scales in the final decision, I would have a lot of nickels.
Hiring the least – or even a lesser – hourly rate firm is sometimes tragic… unless you’re hiring unskilled labor (and even that might be tragic).
My friend Nick is an executive corporate strategist. Nick is very good at his job. He has conversations with other executives to help them avoid this error. Nick’s logic? “You believe it’s a good idea to hire a cut-rate professional to engage on an enterprise technology project, but if your child needs a surgeon or you need a divorce lawyer, only the best will do?”
Nick has a point. When getting things done right the first time matters, we naturally hire the best available.
“Do ‘the Best’ Always Charge the Most?”
No. “The best” service providers do not always demand the highest rate. Sometimes the best salespeople demand the highest rate. They often get that rate because they excel at persuasion. That said, the market almost always bears a higher rate for professionals who are experienced and deliver value.
Why Do I Say, “Think of All the Money You Saved?”
My heart is breaking. I’m learning about a company who paid good money for a solution and got either nothing or not the solution they were looking for. The money they’ve already spent was either partially or completely wasted. Now they are willing to spend more to have the project fixed or done correctly, i.e. delivered. I’m being a little obvious and not very helpful by stating a lesson they’ve already learned…
The hard way.
Ok, I confess: I don’t actually say, “Think of all the money you saved.” At least not anymore. Why did I stop saying that? It’s not kind. It’s not empathetic. It doesn’t help. Saying that could cost us the gig, even. Nobody likes a jackhole.
I instead focus on helping. We can help most by delivering the solution. And we often deliver the solution for less money than they already spent – even though we charge more per hour.
The Pain Is Real
The tragedy is real, though. It happens. If you work through the math, it tracks with the old saying, “How come there’s never time to do things right but always time to do things over?”
Experience informs me there are situations when time is of the essence. Minimally-viable products (MVPs), for example, are extremely time-sensitive. Has Enterprise Data & Analytics delivered MVPs? Absolutely! We’ve even recommended – and delivered – minimally-viable products to clients as deliverables for the first sprint of major enterprise projects.
Please don’t be that company. Don’t hire a lower-rate firm if quality and time-to-market are factors in your enterprise deliverable. Hire the best, like you would if your child needed a surgeon. Why?
Deliver quality late, no one remembers.
Deliver junk on time, no one forgets.