vendredi 19 juillet 2013

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How I Earned A Lot More on Projects by Changing My Pricing Strategy
Jul 19th 2013, 10:00, by Jacob Gube

Before co-founding FreshBooks, I ran a small design agency. I felt like I was on a treadmill, billing by the hour, and not earning as much as I thought I was worth.

So I rethought everything.

The result was powerful: In 2004, I only worked 19 days, and made over $200,000.

The strategy change I’m about to talk about gave me the funds and the time to work on my startup. That startup would later become FreshBooks, which we were able to grow to over 5 million users.

So, how did I do this?

I wrote a book about how I did it (you can get the book for free) but essentially, I moved from billing by the hour, to billing based on the value I delivered to my customers.

Sounds like a simple enough change, right?

The truth is that value-based pricing did not mean slapping a bigger price tag on the services I delivered.

It meant thinking about my design business in a whole new way, and changing the way I worked with my clients.

Here are five ways I changed my thinking and the way I worked.

Don’t Present Price Up Front

Most clients want to know what your prices are up front, and a lot of service providers feel obliged to give an answer.

But I found that starting the conversation with the price leads you down a bad road.

Why? It puts my needs ahead of the client’s. It emphasizes what I want out of the relationship, not what they want.

Not a great way to build trust.

Presenting the price of your services at the start also means you aren’t able to really get to know the client and what they need help with most.

So, instead of spitting out my rates at the start, I would tell the client that I first needed to understand what they wanted.

Doing that earned their trust because it showed them that I was interested in understanding their unique problems and crafting them customized solutions based on what I learned about them and their needs, rather than trying to hawk them cookie-cutter solutions that I sold to all clients.

Find Out What the Client Really Wants

With the question of pricing off the table for the time being, the client and I would begin to explore what they wanted.

I’d probe for opportunities to improve their business with my help — specifically their biggest pain points because those would be the things they’d be most motivated to solve.

I’d try to get at their serious challenges. Are their sales trending downward? Are they facing new competitors?

My objective was to make sure we were both clear about what results they’d like to achieve.

A lot of the time, we would end up talking about a project that was more involved than what the client first had in mind.

For example, I would often redefine a project from simply a paint job for their website to transforming their site into a marketing and selling engine that could help them hit revenue targets. If we had talked about price up front, we probably wouldn’t have gotten there.

When clients have your fees at the top of their mind, they’re not likely to be as open, boundless, and creative with their thinking and vision for the project.

Position the Price as an Investment, Not an Expense

If you start the conversation by throwing out a price, you’re just an expense.

Nobody likes expenses, so clients — typically entrepreneurs and businesspeople — try to keep them as low as possible.

By following my process, I was able to position my fees as an investment rather than as an expense.

That’s because the price would be directly connected to something the client wanted to achieve — it would be a means to help them get results.

When you position your price this way, the client merely wants to know that the investment is a sound one.

As an example, if I was proposing to build a website capable of creating an additional $100,000 of profit annually, I would ask the client to make an investment of $40,000 in their website.

Essentially I based the price on the expected value to my client, not on how long it would take me to do the work.

That’s a great deal when you think about what a new site is going to deliver for the next several years, for most businesses.

You might be wondering now what you can do if the value of the project can’t be measured in dollars.

When that’s the case, try to connect the price to a tangible, measurable benefit.

You’ll probably get some helpful information if you ask questions like What does success look like to you? and How are you going to know you’ve achieved what you want?

I often used the question How much is a new customer worth to you? This question made sense because SEO was often part of my design services, and frequently, the value they gave was more than the cost of my services.

So if I could help the business get even one more new customer, it was a good investment to hire me.

But sometimes the client didn’t know how much a new customer was worth to their business. That then opened the door to a project to help them analyze their marketing channels and get some key metrics to measure performance in place, which in turn created more value for them. Yes, this would cost more, but it was also a fantastic investment for the business.

Present Several Options

If you give a client a single price, you’re asking them to accept or not accept your price. The discussion becomes a simple "yes/no" ordeal. Instead of just giving my client these two options, I’d present my project proposal like a menu or a pricing table — with multiple components that had distinct prices.

Some components were optional, but some were required because they were fundamental to the project.

Together, all choices would address the business needs and goals they shared with me during our initial conversations, and I’d offer different solutions at various depths.

I wouldn’t haggle on price. If a client wanted to pay less, they had to choose to have less value delivered.

That put the clients in the driver’s seat where they could make an informed decision — one where they were clear about the trade-offs.

Create a Virtuous Cycle

Following these news ways of working and thinking had a number of positively profound effects on me and my design agency.

For one, in order to help my clients solve their big issues, I would often have to learn new things and develop new skills, which increased my value in the marketplace.

For another, I was no longer competing with other service providers on price. My clients stopped seeing me as a commodity, someone with an hourly rate that they could compare to somebody else’s.

Instead, I was competing based on distinction; on the unique, customized ways I could help my clients reach their goals.

I should add that you have to be careful not to get in way over your head by over-promising and under-delivering.

If I felt my agency couldn’t deliver the full solution, I saw that as an opportunity to partner with another service provider. I would pay them for the work, developing a lasting business partnership along the way. And in the process, I’d learn about their area of expertise to get better at both selling and delivering it to my clients.

I also learned that it was okay to say no to clients who don’t see the value I presented. Clients who want to grind you down on price only lead you to other low-quality clients. It’s a vicious cycle that lots of web professionals get trapped in.

One way out is by focusing on clients who are willing to pay for the value you deliver, because they’ll lead you to other clients who have other exciting projects, thus creating a virtuous cycle for your design business that will take you upmarket.

Parting Words

The five key concepts I discussed helped me earn more as a designer, and ultimately they enabled me to focus on FreshBooks and get it off the ground.

If you’re interested in learning more about value-based pricing, the book I mentioned earlier is called Breaking the Time Barrier: How to Unlock Your True Earning Potential, which saw 87,031 downloads in the first month.

You can read the book for free here.

Related Content

About the Author

Mike McDerment is the co-founder and CEO of FreshBooks, a simple-to-use, cloud-based accounting solution designed exclusively for small business owners. Since launching in May 2004 from his parents’ basement, FreshBooks has helped more than 5 million people send and receive, print and pay invoices.

The post How I Earned A Lot More on Projects by Changing My Pricing Strategy appeared first on Six Revisions.

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mercredi 17 juillet 2013

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Your Clients Don't Have to Like Your Work
Jul 17th 2013, 10:00, by Jacob Gube

Your Clients Don't Have to Like Your Work

Whenever I meet with a new client for the first time, I always tell them this: It’s not important that you like the design I’m going to make for you.

It’s always humorous to see the client’s reaction to this statement. Most look inquisitive, others look downright baffled.

I then expound on my initial statement: "It’s a bonus if you like it, but the main objectives are that your business needs are met and that your customers like it."

In almost all cases, they go along with this logic.

A few clients, however, will still have a personal need to like the finished product for themselves. But the smartest and most awesome types of clients get the concept, and I prefer to work with them. Why? Because they approach the design project with their business foot forward rather than let their personal tastes and biases control the process.

Personally, I approach each design project by looking at the needs of the users and the client first — so it only makes sense that I would expect the same from my clients.

The key difference between clients that need to love your work themselves versus those that go about the process in a much less personal manner all depends on who is paying the bills.

Where’s The Project Money Coming From?

Nine times out of ten, when a client is paying you out of pocket, they’re going to be much more hands-on throughout the process. Examples of clients that may be in this situation are startup entrepreneurs bootstrapping their company, who may have a powerful and very personal attachment to their business. It’s only human nature. They’re paying for it — or more specifically, they’re paying you for it — so they may want very fine control over the outcome. They may make the process too personal, because by the very nature of the situation, it is very personal.

I absolutely understand that situation. But the problem I see is this: The more a client takes the project personally, the less objective they become, and the more they tend to exert their own personal tastes towards dictating the direction the project takes.

On the flipside, clients who are merely overseeing the project on behalf of a large company aren’t paying for it themselves.

They will also have a compelling desire for the project to turn out successfully, but they tend to make it much less personal, and much more about what is good for their company.

Of course, those are all vast generalizations, but in my experience they tend to be true for the most part.

Making Your Clients Understand the Concept

Whether your client is a big multinational company or a fledging startup business, it’s your duty to make them see the forest rather than the trees when they are caught up in their own personal preferences.

If you’re designing a new website for a client — and you have done your due diligence at the beginning — you have probably asked many questions relating to their customer base and business needs, and are producing the website accordingly.

So what happens when you have done your job correctly and have created the perfect website that will connect with and engage their target market, but your client still doesn’t like it?

Ask Why

Ask them to point out specific parts of the design they don’t like. Then ask the client why they don’t like those parts of the design.

Then, ask the client if the parts they don’t like fail to fulfill the objectives of the project or if it helps achieve the objectives.

Often if you can get them to admit that although they might not like something, that it still matches with the objectives of the project, you will have a much easier time convincing them to go your way.

Ask for Examples

If you can get your client to point to examples of solutions that they like better, one of two things can happen. Maybe their solution is actually a better one. If not, collect your thoughts and explain why your solution is better for the job.

Point to Facts

If your client is adamant about adding an audio loop or splash screen on their homepage, send them references and resources that show why those are horrible ideas. Point to facts that show how these things affect user experience and usability.

If they want an overly complex logo, show them examples of successful logos in their industry, and point out what commonalities they all share (typically, good logos are simple and created using vector illustration software).

And if you can’t point to facts, then consider the alternative that the point of contention is debatable.

Know When to Give In

Having said all of that, there will come a time when it’s best to just give the client what they want.

Many designers will have a different point of view on that statement I’ve just made.

But in my experience, if I have a client that is firmly digging in their heels on an issue, I state my case, and leave the ball in their court.

As the saying goes, you have to pick your battles. Good design is definitely worth fighting for; and as for the rest, they don’t matter in the broader scheme of things.

Final Thoughts

While most of my clients have hired me for my years of experience and my body of work, some of them trust in these credentials more than others.

I always prefer to work with business people rather than people paying out-of-pocket, because they understand the end game in a much purer way.

While I love the situation where my clients love the finished product, it’s never my goal. If the project doesn’t hit home with their customers and business objectives, I can’t chalk it down as a success.

Related Content

Lead image source: "Workers at computers at the Huichon Machine Tool Factory in Huichon, Chagang Province"

About the Author

Wes McDowell is the Principal and Creative Director for The Deep End, a web design firm in Los Angeles. In addition to client work, he’s authored several books for freelance designers and co-hosts a popular graphic design podcast called "The Deeply Graphic DesignCast." Follow Wes on Google+.

The post Your Clients Don’t Have to Like Your Work appeared first on Six Revisions.

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lundi 15 juillet 2013

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How to Make Data Visualization Better with Gestalt Laws
Jul 15th 2013, 10:00, by Jacob Gube

How to Make Data Visualization Better with Gestalt Laws

People love order. We love to make sense of the world around us.

The human mind’s affinity for making sense of the objects it sees can be explained in a theory called Gestalt psychology. Gestalt psychology, also referred to gestaltism, is a set of laws that accounts for how we perceive or intuit patterns and conclusions from the things we see.

These laws can help designers produce better designs. For instance:

In this guide, we will talk about how to apply the principles of Gestalt to create better charts, graphs, and data visualization graphics.

For broader implementation tips of Gestalt laws, please read Gestalt Principles Applied in Design.

Introduction

Gestalt laws originate from the field of psychology. Today, however, this set of laws finds relevance in a multitude of disciplines and industries like design, linguistics, musicology, architecture, visual communication, and more.

These laws provide us a framework for explaining how human perception works.

Understanding and applying these laws within the scope of charting and data visualization can help our users identify patterns that matter, quickly and efficiently.

None of the Gestalt laws work in isolation, and in any given scenario, you can find the interplay of two or more of these laws.

Let us cover some of the Gestalt laws that are relevant to enhancing data visualization graphics.

Gestalt Law of Prägnanz

The law of Prägnanz is the central law of Gestalt.

Prägnanz is a German word that means "pithiness." Pithiness is the act of being concise and full of meaning/substance.

The law of Prägnanz states that the human brain loves simplicity and it tends to process simple patterns — patterns that are regular, even, and orderly — faster than patterns that are more complex.

Let’s say you want to identify the top performer of the quarter from a "Sales by Salesperson" chart. Look below to see which of the two charts is easier to use: The one in which the data is disorganized (left) or the chart which has ordered the data from highest sales to lowest (right):

Lesson: Arrange data logically and systematically at every opportunity.

Gestalt Law of Continuity

The law of continuity states that our eyes instinctively group things that are aligned with each other.

Let’s go back to our "Sales by Salesperson" chart example.

In the left chart below, there are abrupt directional changes.

In the chart on the right below, the eyes follow a continuous path; it makes the whole chart more readable because of the continuous downward direction.

Lesson: Align elements linearly to facilitate comparison of different items that are in a related grouping.

Gestalt Law of Similarity

This Gestalt law theorizes that objects with similar characteristics — similar colors, similar shapes, similar sizes, similar orientation, etc. — are perceived as a group.

Let’s see how we can apply this to our "Sales by Salesperson" chart example.

We can find the top performer using the first chart easily because we used the laws of Prägnanz and Continuity.

However, we can improve the design a bit more by using the Gestalt law of Similarity.

In the chart on the right, we have made the bar graphs all the same color — they are all the same light blue color.

Giving them the same color removes the additional cognitive load imposed by the disruptive use of varying colors in the chart on the left, and makes it much easier for us to compare and find points of interest.

Notice how the multi-level pie chart below uses color to group related entities and differentiate them from other groupings:

Lesson: Use similar characteristics and attributes (color, size, shape, etc.) to establish relationships between objects and to reinforce groupings.

Gestalt Law of Focal Point

What’s the inverse of the law of Similarity? The law of Focal Point. The law of Focal Point states that in a visual presentation, distinctive objects create a focal point.

The focal point stands apart from other objects, draws the user’s attention, and persuades him to delve further into the presentation with the focal point as the starting point of the exploration.

Let’s again go back to our "Sales by Salesperson" chart example. (You are probably bored of this chart by now!)

Say that, for some reason, you want James (a salesperson represented in our chart) to be highlighted.

Perhaps you want to highlight James’s performance because he is the subject of conversation in your staff meeting. Or because, compared to the other salespeople in our chart, he’s doing incredibly well because he just started a month ago and he’s already our top 3 performer. (Good job James!)

By changing James’s bar graph color, see how your eyes are drawn to his bar graph immediately, even though there are two other top-performers prior to his bar graph:

In the chart on the right, the bar graph for James stands out due to its distinctive color — it makes James’s bar graph the focal point of the chart.

Lesson: Use the art of distinction to highlight and create a focal point in your graphs and charts.

Gestalt Law of Proximity

This law states that objects placed close to one another are perceived as a group. We easily tend to make comparisons and look for similarities in such groups. Objects that are further apart are seen as unrelated or less related.

Let us look at the law of Proximity in action. In the following chart, the sales of "North", "South", "East", and "West" regions form 4 distinct groups: "Quarter 1", "Quarter 2", "Quarter 3", and "Quarter 4".

It is quite easy to compare the sales of each region within a quarter (which is our grouping according to the law of Proximity) due to their proximity with one another.

But try comparing the sales of the "North" region (blue bar graphs) across the 4 quarters. Difficult isn’t it?

Let’s revise our chart by employing the law of Proximity:

Now try to find and compare the sales of the "North" region (and other regions) across the quarters using the revised chart. It should now be easier.

Lesson: Know what your chart wants to focus on. Keep those data points close to each other by grouping them according to your established information priority.

Gestalt Law of Isomorphic Correspondence

This law states that people interpret and respond to images based on their past experiences. This law, for instance, explains why sticking to well-established user interface conventions, like blue-and-underlined hyperlinks in web pages, is effective.

One application of this law in the realm of data visualization is in the selection of colors for your charts.

For example, many cultures and nations associate the color of red with "danger" or "stop", and green with "growth" or "nature".

When creating charts that have positive/negative connotations (e.g. profit/loss charts and revenue charts), you can color code your chart accordingly — green for positive and red for negative. (This is a popular charting convention in the business world that people are accustomed to.)

In the "Total Revenue" graph below notice how — due to the colors used for the bar graphs — the user quickly gets the idea that the revenues were below the target revenue for two months with minimal inspection of the graph.

Lesson: Keep in mind your users and their preconceived notions and past experiences; stick to popular conventions and best practices if possible.

Gestalt Law of Figure/Ground

This law states that objects of a graphic either are perceived as figures (distinct elements of focus) or as ground (the background on which the figures rest).

Foreground objects are important. Background objects are less important. Web designers should already be familiar with the concept of the Figure/Ground law.

The more the contrast between the figure and the ground, the easier it will be to distinguish between the two types of objects.

Below, which chart do you find more readable?

Due to the low contrast between the figure and background in the chart on the left, there is an additional cognitive load. Increasing the contrast (as in the chart on the right), improves readability.

Lesson: Ensure there is enough contrast between your figures and ground.

Gestalt Law of Common Fate

This law states that when lines or shapes move together in the same direction, they create a sense of unity and indicate a relationship. They share a common fate.

On the other hand, when lines or shapes move in different directions, they are perceived as unrelated or less related.

Below, in the chart on the left, the data plot for "Product A" and "Product B" appear to move together and facilitate a grouping. In the chart on the right, the plot for "Product C" is moving in a different direction so "Product C" is thus perceived as different and unrelated.

Lesson: Use direction and/or movement to establish or negate relationships.

Summary

To sum up the lessons we can derive from these Gestalt laws:

  1. Law of Prägnanz: Keep it simple. Arrange data logically wherever possible.
  2. Law of Continuity: Arrange objects in a line to facilitate grouping and comparison.
  3. Law of Similarity: Use similar characteristics (color, size, shape, etc.) to establish relationships and to encourage groupings of objects.
  4. Law of Focal Point: Use distinctive characteristics (like a different color or a different shape) to highlight and create focal points.
  5. Law of Proximity: Know what your chart’s information priority is, and then create groupings through proximity to support that priority.
  6. Law of Isomorphic Correspondence: Keep in mind your user and their preconceived notions and experiences. Stick to well-established conventions and best practices.
  7. Law of Figure/Ground: Ensure there is enough contrast between your foreground and background so that charts and graphs are more legible.
  8. Law of Common Fate: Use direction and/or movement to establish or negate relationships.

Learn More about Applying Gestalt to Design

Note: Charts and graphs in this guide were created using FusionCharts Suite XT.

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About the Authors

Udhaya Kumar Padmanabhan heads the UX and Communications initiatives at FusionCharts. He is an invited member of The Society of Industry Leaders (SIL), founding member of ACMSIGRAPH Bangalore and Local Ambassador of UXNet, a global network of UX pros. Connect with him on LinkedIn.

Shilpi Choudhury is a writer, blogger, design enthusiast, and an amateur actor. She writes for FusionCharts. Get in touch with her through LinkedIn.

The post How to Make Data Visualization Better with Gestalt Laws appeared first on Six Revisions.

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