Up-charge aka Price Gouging

For those of you that know me, you know that I believe in being very open and honest with people, in both my personal life and in business. I am also not afraid to speak my mind, especially when it comes to something I am very passionate about.

The same belief is carried over to my business. Delaware 302 is built on both honesty, and offering affordable solutions to our clients. We set our prices lower than the competition because our business is about helping businesses grow, not how much money we can make. We also never charge our clients something they don’t need. Not every technology company has these same beliefs though.

What many people don’t know, is that my company is also the development arm for numerous technology companies here in Delaware. To date, we have 4 that we work with on a fairly regular basis to build web sites and applications, host, and create graphic designs for. This is actually a fairly common practice when a technology company doesn’t have the staff or resources to handle the work.

This has led to numerous challenges that we have had to address, the primary of which is maintaining the illusion of being the technology company that the contract was signed under. The other one, which is the focus of this post, is pricing.

As I said in my opening, not every technology company has the same beliefs as we do. We have watched in disbelief as companies we did business with in the past took our project scopes and quotes, and up-charged the work as much as 115%. I will point out I did say DID work with. We no longer do business with these companies because of their practices, and insane price gouging to make as much money as they can from each bid.

It is the client that ultimately suffers from this practice that has no rules or regulations in place to stop it. Web site solutions, and the prices charged, seem to be at the complete whim of the company quoting the build. The type of client, and the perceived revenue stream they have also comes into play. Many technology companies charge more if the potential client is a well know store, law firm, or financial company, compared to a local mom and pop shop or a start up.

To drive my point home on this, I will share with you a recent project we quoted for another technology company. The client is a fairly well known company with locations in both Delaware and Maryland, and they wanted a new web site. I was invited to attend the meeting with the client’s marketing person, and she came to the meeting prepared with research she had done on their competitor’s web sites, and a wish list for the new site based upon this.

Armed with her research and wish list, we scoped out the project, calculated in the needed custom development, and wrote up a quote. We then sent the quote over to the technology company we were working with, so they could work it into their proposal. About 2 weeks later the owner of the technology company called and said the client had some sticker shock, and asked if we could cut our prices on the project. I came to find out shortly after that call, that they tacked on almost $11,000 to my quote.

I was in shock when I found this out. Who in their right mind would up-charge 115% on a site build when they are doing absolutely nothing, except generating a contract. Then have the brass ones to call me and ask me to cut my prices on top of it.

No wonder companies have such a bad taste left in their mouth when dealing with technology companies like this.

At Delaware 302, we strive to be different. We charge the same for our solutions no matter who the client is, without any up-charges. We also offer the same level of exceptional service to all of our clients.

If you are ready for a change, contact us and let us help you build a solution that works for you.

Let’s build the future together.

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The Business Whirlwind

After an action packed week of meetings, finalizing a new application module for our system, and the general day to day operation of the business, I decided to take a moment to reflect on the whirlwind of activity that goes hand in hand with owning your own business. As most business owners will tell you, there are times when it seems like it can be never ending, and makes for very long days.

Of course there are the inevitable questions that people almost always seem to ask. The big one I get asked the most is: “Is it all worth it?” The answer is always “Yes, because I am doing what I love to do, and the feeling of accomplishment is very rewarding.”

That is one of the major keys when you own your own business, you have to love what you are doing. It drives your passion to keep moving forward, and infuses everything you do. It is the same with any profession. Take a chef for example. Many times they work 12 or 14 hour days at the restaurant. Most people would say that is crazy, and they could never do it. For the chef though, it is their love and passion for cooking that gives them that extra energy to work those long shifts. They thrive on the accomplishment of serving a perfect dish for each and every customer.

Another major key is balance. The ability to separate yourself from your business, and spend quality time doing other things. This is very important to any business owner, and even as an employee, because you can become consumed with the “business only” aspect of your life, and run the risk of getting burnt out. When that happens, your drive and passion suffer, and you start to lose your love for what you are doing. I know this from personal experience, because I have been there. I was the lead development manager for a large consulting company, and our clients were some of the top names in the financial industry. At times I felt like I lived my life in the financial district of New York City, and never had any time to do anything else. After 9 long years, I had nothing left to give.

It took me taking a risk and starting my own business to re-ignite my passion and love for what I do. I turned my focus towards helping small businesses with their solutions, and helping them grow through the use of technology. Armed with the motto of “Fortune 500 solutions do not need to come with a Fortune 500 price tag” my company, Delaware 302, was born.

Are things still a whirlwind? Most definitely. Am I loving every minute of it? That is a resounding YES.

Provider Nightmares

Today I wanted to relay to you a conversation I had recently with a potential client. Sadly the story they told is one that I have heard time and time again, and each time I hear of the nightmares they have gone through, it leaves me wondering how these solution providers can treat their clients this way, and still stay in business.

This company’s story goes like this:

About 2 years ago we were in need of a new web site, so we contacted one of the local development companies that seemed to do most of the web sites in the area. We sat down in an initial meeting with them and told them exactly what we needed. They said they would draft up a quote and send it over. Shortly after that started a back and forth process that quite frankly took a lot longer than we expected, and each time we were talking to someone new over there. Finally, almost 5 weeks after the first meeting, they came back with a $15,000 quote for our site. At this point we were already behind schedule, since the new site was a key element to our marketing, so we signed, and cut them a check to start work.

A few days later, their graphics designer called us, and said he would have a proof for us within 2 weeks for review and approval. About 2 months later, after calling them repeatedly on a weekly basis, we received the proof, and came to find out the designer that contacted us initially, was no longer at the company. We were promised at that point that once the design was approved, our site would be ready in less than 3 weeks. 6 weeks later they sent us a development link to look at. At this point we were hard pressed for time, and said go with it.

Finally, almost 5 months after our first meeting with them, our new site was launched, and then the nightmare really began.

Over the next 9 months we experienced constant email outages, with one stretch being a week. Our site kept going down due to server issues. Every little request we made for a change to the site was followed with a $120/hr invoice, even it it was something very simple. Never being able to get someone to respond to our calls or emails. It was finally capped off with the owner of the company telling us point blank, after our 20th some odd complaint, “We have no contract. If you have problems, and don’t like the way I run my business, leave.”

So we gathered around in a meeting at the office, and decided to take our site and go. Unfortunately we found out that we were locked into his system, and leaving was no simple task. So we did the only thing we could think of at the time, since we couldn’t afford to do this all over again, get as much of the site as we could, and created a new one ourselves.

Needless to say, the experience they had has left them wary of any technology company. The only reason they were even willing to talk to me, was because of my reputation as being straightforward and honest. I assured them that my company was different, and was willing to do whatever it took to prove it to them.

Is your business going through similar issues? Are you tired of your solutions provider treating you like you don’t matter? Are you frustrated of being overcharged for everything?

At Delaware 302 we treat our clients the same way we would want to be treated, with respect and honesty. Drop us a line and find out how we can help your business grow.

Let’s build the future together.

Buzz Word Overkill

Recently I was asked by an organization to do an independent review of a proposal that was submitted to them by the PR firm that they have been working with, as a lead up to their contract renewal. This is something that I have done time and time again over the years for clients, so I was more than happy to help them out. What I read left me scratching my head, and quite frankly angered. This proposal was literally a blatant attempt to take advantage of the client, disguised behind that WOW factor of buzz words.

The proposal was broken down into 2 sections, Branding/Marketing and Social Media/Web, each with a price attached to it.

I read through the branding/marketing section, and while some (emphasis on some) of the general marketing aspects made sense, there was very little substance to it to substantiate the price tag they attached to it. The item that glared out at me larger than life though, was the fact there was no breakdown on pricing. That is a huge first sign indicator that you are about to get taken to the cleaners. Without line item prices, you can’t completely evaluate exactly what you are getting. It would be like going to the grocery store, and having the person at the register look at your cart and give you a price. I don’t know many people that would shop that way.

The second part of the proposal, Social Media/Web, is what really got me. It was crammed with so many buzz words that my head was spinning. Things like: seed your social media, ongoing SEO performance enhancements, engage your audience, and campaign saturation monitoring with targeted site modifications. Again I looked at the price tag (this one was an exorbitant monthly charge), with no breakdown of what cost what, not even listing the Social Media platforms to be utilized. Knowing that this was a contract renewal, and now being very suspicious, I decided to do some research and digging. This PR firm had no idea how deep they just stepped in it.

I decided to start with the web site and social media, since these are the core of my business, and where many businesses and organizations get taken advantage of. Here is what I found:

  • The FaceBook page and the Twitter account for this organization were both active, and currently maintained, including an active engagement with their audience. This raised a red flag as to why the PR wanted to charge for the “engage your audience” in the proposal.
  • The web site was being hosted by a small media company in Maryland (Red Flag raised high). Upon further digging, I found the server domain name was also registered to this company, and I would be willing to bet the server is located in their back room, given the IP look-up location ping back.
  • There was NO SEO done at all to the site. The only reason it came up in the search engine is because of the organic content and the site name. If this is ongoing SEO, it should have been there to start with.
  • The website was built on WordPress, which isn’t a bad thing, except that there didn’t appear to be any tags.
  • The PR firm was in charge of building and hosting the web site, and the maintenance.

There is more, though hopefully you get the picture.

So what lessons can we take away from this experience I just shared with you? The answer is: you need to be fully aware of what you are paying for, and if you have any doubts, ask questions. If the company is honest, and values you as a client, they will answer your questions.

At Delaware 302, we take pride in being transparent with our clients, and building trust. Our solutions are geared to be affordable, and we don’t believe in a one size fits all approach. We also will never charge our clients for something they don’t need.

Contact us today to learn how we can help your business grow.

Let’s build the future together.

Outsourcing Our Future

Today I want to touch on a subject that may raise some eyebrows.  Maybe you’ll consider me a fanatic.  I’m talking about the issue of outsourcing.  The truth is that I am not fanatical at all, I am passionate. Passionate about being an American, passionate about living in the greatest country in the world, and passionate about taking pride in what we can accomplish as a state and a nation.

I have watched over the last 2 decades as our economy has continued an almost total shift away from things made here.  I’ve watched the labels on merchandise continue to change rapidly from “Made in America” to “Made in China” or any one of a few dozen other countries, to the point that you would be hard pressed to find anything made here in our country, without going to a custom niche store. I’ve watched as factories close, and people find themselves on the unemployment line. It saddens me as an American, and leaves that looming question: Why?

The answer is simple: Money. Companies can get their goods produced cheaper elsewhere, thus increasing their bottom line. Now I know that will raise all types of debates like: ‘we still export goods to have the products manufactured’, and ‘it is about building a global marketplace’, and ‘there is more to the story’. Try explaining that to the factory worker that has to go home to his family and tell them he is out of work, and they might lose their home.

We have altered not only our future; we have also altered the future of our children, and their children to come. We have created a precarious balance that impacts our economy, and with how hard we were hit recently, widens that recovery time, and leaves the rest of the world holding their breath, since over 20% of their economy is dependent on us.

Outsourcing goes well beyond manufacturing; it has also had a significant impact on the technology industry.

In the nearly 16 years I have been building solutions, leading development teams, and being a design architect for many projects across numerous Fortune 500 companies, I have been on the front line and watched this shift happen. The bulk of the work has shifted from local US based development companies to India. It became a reality, and one that showed me the final writing on the wall when I was doing work at Citi Group. I was a sub-contractor for IBM at the time, and happened to be the only US staff member on the team. The rest of my 26 person team was on-shored (the term they use when they bring in employees from other countries) from India. We also had another team stationed at Citi’s facility in India.

Let me set the record straight and say that I am not opposed to working with programmers and systems people from other countries. In fact, I have worked with people from all over the world, and many of them have been some of the brightest and most intelligent technology people I have met. What I am opposed to is the mentality that I have heard time and time again with regards to sending work over to India: “They work cheap, and we can get 2 or 3 programmers for the price of one here.” I have had first-hand experience with managing this “cheap labor”, and have the battle scars from the headaches and nightmares that ensued, that are proof of the saying: “You get what you pay for.”

The other thing I have seen occur in the technology industry is formation of shell companies. These are companies that set up base here in the US, register as a business, and start plugging for work and contracts. While this is great, and they build the illusion that you are now dealing and working with a local US company, the truth of the matter is that it is all a front. Except for 1 or 2 employees here to manage the business, all of the work goes overseas, and in most cases to India.

There is a company right here in Delaware that is a prime example of this. In an open discussion, the owner of the company stated point blank, that he sends all of the work over to India. They have worked on numerous projects for multiple State agencies, and I am willing to bet very few of the Department heads know who is really doing the work. The illusion that has been presented is that this is a local Delaware company that is doing the work, and that they are putting Delawareans to work. Sadly, this is not the case at all.

At Delaware 302, all of our products are produced, and all of our work and services are done, right here in the U.S. and more importantly, right here in the First State.  We believe that the future of our economy relies on making “Made in America” mean what it used to: Taking pride in our hard work, attention to detail, and working together as a team.

Contact us today to learn how we can put “Delaware pride” to work for and use our solutions to help your business grow.

Let’s build the future together.

The Art of Illusion

Have any of you ever watched a magic show, and sat there in awe as the magician preforms all of these great magical feats? The magician slowly builds up the anticipation, until the grand finale, when the entire audience is at the edge of their seats watching. Then the show is over and the lights come up. People start to leave, and the air is buzzing with conversation about what they witnessed. These people will swear that this is the greatest magician they have ever seen.

Many web development companies do the same type of magic act with their clients. They bring the client in, show them the best examples of their work, and build the excitement and hype. The client gets drawn in, and starts to believe that no other company can do the same thing for them. Once the development company has them hooked, they know that they can get the full allotted budget the company has.

The truth is, that what you are getting sold is pretty much all an illusion.

On one side, you have the development companies that aside from the design of your site, use free one size fits all platforms to put it on. All of the “special features” that are charged for, are no more than widgets that they have gotten for free, or paid a nominal fee to use. The justification is that you are paying for the “development expertise”. Don’t be fooled by that smoke and mirrors trick either. Many of these companies hire kids out of college, because they work cheap.

On the other side, you have the companies that sell the products and services of another development company, and make it sound like it is theirs. They build the illusion that you the customer are getting one total solution company, when in fact it is multiple companies that are doing the work. The customer usually pays more too, since there is always a markup.

So how is it that the businesses get sucked into this great magic act, and don’t see the mirrors or wires? The answer is simple. Building a web site is probably one of the most grueling processes a business can go through. I had a client of ours tell me: “It is like writing a business plan.”

So what makes my business different from the rest you might be asking? The answer to that comes in two parts, and is easy to answer.

First our core beliefs are different. At Delaware 302 we work with our clients to build a complete solution that works with their business. We believe in total transparency, and in offering our solutions at an affordable rate. We will never sell you something you don’t need.

The second part to this answer, is our technology. Our core system, the 302 engine, is a module based system that has been designed to grow with the business. It was built by us using the latest in technology, and for each build, we customize the system to meet the needs of our clients, without forcing them to use something “as is”.

Contact us today, and let’s build the future together.

When Free Doesn’t Mean Free

Today I wanted to relay a story to you of a recent interaction I had with the owner of a young and growing business. He asked me to come in and do a discovery session with him, to find out how he could better utilize social media for his business, and to look at his site to see how it could be optimized better for the search engines.

Now as you all probably know, these are 2 separate pieces to doing business, and usually fall at the opposite ends of the discussion board. I was up for the challenge though, since it showed that he had isolated these areas as “needs” for his business. Yes, I referred to it as a challenge, since it can be difficult at times to keep these specific topics separated, and blocked into their own discussion. I have found from years of experience, that most business owners have been told by other companies that SEO and Social Media are almost the same.

The truth of the matter is that they work hand in hand, yet only to a point. Your social media outlets are the extension of your reach to your intended audience (customers) that would find your products and services beneficial to their needs. SEO is the optimization of your web site to “qualify” and “validate” it with the search engines, and there are necessary steps that need to be taken with regards to this. I will be posting on both of these topics in-depth in the very near future.

So, back to our business owner. I sat down with him and one of the ladies from his staff, and told him I had a few questions to ask up front to get a better understanding of his business, the day to day processes, his audience, and where he saw his business evolving and going. I will tell you right now, that if you are a business without a business plan, some of these questions are probably some of the hardest ones to answer.

About 30 minutes into our discussion one thing became very evident and clear. This business was struggling with a time management problem, and was spending an enormous amount of time on their web site. So, I stopped the discussion, and said I wanted to switch gears for a few minutes. He was very agreeable, so I asked him to walk me through their web site updating process. What ensued was a mesmerizing experience as I watched him click on all of these favorite tabs at the top of his browser, and log into site after site. After about 5 minutes he was logged into 7 different sites and sitting on the control panel pages of these site.

So I asked the obvious question: What are all of these?

The response was: This is a free tool that does this for our site. This one is a free tool that manages this part of our site. This is a free platform that we got for our web site. This went on for all 7 sites: “This is a free…”.

So I asked the next question that came to mind: Do you log into these every day to manage all of your site processes, and how long do you spend?

His response made it hard for me not to let loose a low whistle. He said “Yes, we log into these every day and spend anywhere from 30 minutes to 2 hours depending on how much we need to do. Probably about 6 to 7 hours a week.”

As you can probably guess the next question that came was: Why not purchase a bundled solution that does all of this for you from 1 interface?

He told me: “Why pay for something that I can get free?”

What I told him next is a lesson that I learned through trial and error over the years, and something all business owners need to consider when it comes to doing business. The lesson is the valuation of your time. If you are spending hours of your time each week managing an aspect of your business that could be done fairly quickly and easily with the right tools and solutions, then these are hours that you are not dedicating to your customers, building your brand, or dedicating to helping your business grow. Your time as a business owner has a price tag attached to it, and it is not free.

We here at Delaware 302 understand this, and are here to help our clients not only with our technology and social media solutions, but also with helping them better understand and use the tools available to them, thus saving them time that can be used to build their business.

How much is your time worth?