The Pricing Problem | November 15, 2003
Working out a price for a website can be an extremely stressful exercise. If my experiences are anything to go by, most people will email you (and 100 other web designers) asking for a quote with very little or no information to go on.
Usually they simply ask...
"How much do you charge for a 20 page website."
Which is about as helpful as somebody walking into a car dealership and asking, "how much do you charge for a car with 4 doors". If you are lucky they may also throw in a few titbits like...
"We'd like something like xyx.com"
Where xyz.com is either the worlds worst website, or something so huge and expensive you just know they don't have the funds.
"It has to have a flash intro/news ticker/frame based navigation"
However you're a professional so you struggle on. You'll try to open a dialogue to extract a few more nuggets of info until you have enough to go on. Then you work up some prices and put together a proposal which can take anything from a few hours to a couple of days. You spend the time because you're a professional and because you want to let your potential client know as much about the web design process and what you do as possible.
You'll wait weeks and then if you're lucky you'll get an email back saying...
"Thank you for the proposal. Unfortunately we have found another designer who will do the job for x"
Where x is 5-10% of what you quoted. In fact it's about what you'd have charged for the time you spend putting together the prices and the proposal in the first place.
If you're unlucky you'll wait for weeks expecting an email and eventually, when one doesn't arrive, the memory of this proposal will fade into all the others.
These situations are really down-heartening. You've put a good deal of time, energy and creativity into your proposal and at the end of the day all your time was wasted. If you'd have known the potential client was speaking to lot's of other designers and that all they wanted was the cheapest price, you wouldn't have spent as much time on the proposal. Next time somebody approaches you for an estimate you'll be much more cautious and at the end of the day it's your potential clients who will suffer.
This seems to be an increasingly common event. There are so many web designers trying to eek out a living, many designers are willing to work for peanuts. It reminds me of the famous "will code for change" photo that was kicking around when the dot com bubble burst. Also there are so many web designers entering the industry who have never worked in a creative/IT sector before and have no idea how to set rates. I'm amazed by the number of freelancers who email me asking how much they should charge.
Combine this with clients ever increasing demands for cheaper over better websites and the ability for them to contact an ever wider number of designers, and you've got big problems brewing for the industry.
In Kevin Potts's excellent "The Pricing Woormhole" article, he points out these, and many more pricing related problems facing the web design industry. He agues that educating clients about the value of design is extremely important. This is something I've been arguing for some time.
However we work in a large and complicated marketplace and it's just not feasible to educate every client who comes through the door. In fact trying too hard to educate clients can actually backfire on you. People come to web designers for a website, not a market awareness course.
Kevin also points out that globalisation and the nature of the web is starting to have a big influence on our industry as well. I regulaly get emails from outsorcing companies from India and Russia selling low cost IT skills. Companies are starting to move their IT support departments off shore. How long before web design services follow the same suite?
The future of our industry is in the hands of it's practitioners. We need to develop sensible pricing policies and then stick to our guns. We also need to learn from other sectors and hone our business skills as well as our design and coding skills. We need to meet our clients needs more efficiently, but we also need to know when to walk away.
Fundamentally we need to distance ourselves from the image of the bedroom web designer/frontpage cowboy and brand ourselves firmly as professionals. You wouldn't choose you're doctor or lawyer based on the cheapest quote, why choose your web designer this way? What we need to do is make sure people use the same critical judgement the use when selecting our services as they do when selecting any professional service. How we manage this is another question.
Posted at November 15, 2003 7:55 PM