Sell software, not hours: how to price custom apps for your clients
Short answer: price custom software on the value it creates for the client, not on the time it takes you to build it. Use a one-time setup fee anchored to what the client saves and gains in a year, plus a monthly retainer for hosting, support, and continuous improvements. When AI cuts your build time, hourly billing punishes you; value pricing rewards you.
Why hourly pricing breaks with AI
If a client app that used to take 200 developer hours now takes a few sessions on Alori, billing by the hour means your revenue drops as you get faster. The client doesn't pay for your hours. They pay for quotes that go out the same day, a schedule that doesn't double-book, and fewer missed appointments when follow-up lives in one app.
Step 1: calculate the value
Sit with the client and estimate, per year:
- Tools replaced: total of the subscriptions the new app replaces.
- Time saved: hours of double entry and admin removed × hourly cost.
- Revenue gained: more quotes followed up, fewer missed callbacks, more reviews, more renewals. Use conservative numbers the client agrees with.
Write the total down together. That number is your anchor.
Step 2: set the setup fee
A common approach is to price the setup at a fraction of the first-year value, so the client sees a clear return in the first year. Present it as an investment with a payback period, not a quote for hours.
Step 3: set the monthly retainer
The retainer covers:
- Hosting and infrastructure on Alori
- Support for the client's team
- A set amount of changes and improvements per month
- Monitoring and updates
Price it so it's comparable to, or lower than, the subscriptions the client is canceling. "You're replacing four tools and paying less per month" is an easy yes.
Step 4: price expansions
Every new screen or workflow on the client's shared data (portal views, maintenance tracking, reporting) is a new mini-project: small setup fee + retainer increase. Because the data is already there, these are fast to build and high margin.
Example structure (fill with your own numbers)
| Item | How to price |
|---|---|
| Discovery + demo | Free or credited against setup |
| Setup | Fraction of first-year value, fixed price |
| Monthly retainer | At or below the tools it replaces |
| Expansion app | Small setup + retainer increase |
| Extra changes beyond retainer | Fixed price per request, not hourly |
What to say in the proposal
- "This replaces [tools] that cost you [amount] a year."
- "It removes about [hours] of admin per week."
- "Their data stays in the hosted database for that client project; they can ask the Alori team if they need to move it."
- "We keep improving it every month as your business changes."
FAQ
Should I show my hours? No. Show the outcome, the value, and the payback period.
What if the client compares my price to a SaaS subscription? Compare the full picture: all the tools replaced, the time saved, and the fact that the software is built for their business.
How do I handle change requests? Include a monthly allowance in the retainer and price anything beyond it per request.