Newfangled works with independent agencies to create lead development web platforms for their clients.

Newfangled works with independent agencies to create lead development web platforms for their clients.

Ten Questions to Ask Before You Start a New Web Project



Building a new website is a big deal. It takes a lot of time and effort from many people. If you were expecting to simply place an order and be notified when your site is done, you should be prepared for disappointment. That is how basic templates are delivered, not how great websites are built.

If you've ever been involved in building a house, you probably have some insight into how building a website really works. Before any wood is cut, thousands of decisions are made, from choosing a plot of land to choosing the knobs on the kitchen cabinets. In between is a wide spectrum of issues that concern many players--the architects, developers, construction workers, interior designers, landscapers, and of course, the customer. With the cost of the design and construction of a house, you'd expect the project to require a lot of time and effort from many people. We need to have the same expectation of web projects.

It's the first month of the new year, and like most of us, new projects are probably on your mind. Now that I've generally set you up with more realistic expectations of scope, complexity and time, I'd like to recommend a few specific questions to consider in advance of any new web projects you undertake in the coming year.







Comments

Erik | January 6, 2010 12:00 AM
As a freelancer, I've gone through many different ways of dealing with pricing. I started out tending to price things based upon what seemed 'reasonable' - as in, sure, $1200 for a website sounds great. Then I figured out an hourly rate, which I felt squeamish about and probably seemed like an amateur anyway. Next I tried set prices for particualar jobs. I thought that was going to be a winner until I realized that no two clients are the same, so no two jobs are the same, so I ended up going back to just estimating and billing hourly. I probably lose clients that way but it's the only way to keep control.
Mark O'Brien | January 6, 2010 12:00 AM
Russ,

I hear where you're coming from. We do have the policy of talking about money early and often in our sales process, but often times I sense that the prospects I'm speaking with aren't comfortable with going first, so to speak. I almost always start talking about rough price ranges to get the conversation going and things usually progress well from there.

One way or another, we need to be honest with each other about what can be done for what cost.

Mark
Chris Butler | January 6, 2010 12:00 AM
@Russ, Your story is not at all unfamiliar; I've heard ones like it and generally assume that that kind of thing happens all the time. That said, your frustration is completely warranted. I think Mark's comment addresses our approach to this, though some history might help, too:

In 2008, we changed our new project pricing after having done an exhaustive utilization review of our firm over the course of a year. After having clearly worked through our standard process and looking at how much time and resources it requires, we realized our prices were significantly less than they should be. So, we raised them. In general, we didn't get a ton of pushback when delivering new proposals. We honored all outstanding proposals that came back to us with the old pricing. But, there were one or two instances in which we delivered new prices to companies that had received quotes from us before our pricing change. At least one of those companies asked about it, to which we responded with a very clear explanation of where the new price was coming from. Even if they weren't happy with the price jump, they understood why. Since then, we've made a point of being very transparent about our process and costs, and as I wrote, talking about money right away.

@Andrea, What you describe in giving two estimates is the kind of thing I'm talking about. You can only do that if you know the client's budget. But knowing their budget gives you the ability to provide even more honesty and advice to the client- what they can realistically do at their planned budget, and then what you would advise they do and the cost for that. Our experience has been that when we approach proposals this way, many clients opt to invest in our guidance, even if it means spending more than they planned to (amazing how money is found).

On the other hand, we often deliver quotes that are less than the client's planned budget- because what they want to do actually costs less than they've planned to spend.

In either case, our goal is to use budget knowledge to serve our clients well.
Andrea Fidel | January 6, 2010 12:00 AM
@Russ - That's a good point. I used to be a project manager for a marketing firm and we did a lot of company websites. While our company was one that did not inflate prices just because we could, I know there are many out there that do. It's like giving a time-sensitive task to someone; if he can do it easily in 1 hour, but you give him 3, he'll take all three hours to get the task done.

Something that we used to do in working with prospects during the proposal phase is ask what they were planning to spend. At the time, many people did not realize that web development could be so expensive so would give numbers like $1500 for a completely new design, copy writing, and other services. We would politely go over their needs and strategy and come up with 2 different numbers - one that was as close to their budget as possible and oftentimes a barebones site, and one that was a little more reasonable, but nothing to blow them out of the water, that would sufficiently suit their needs and meet their goals.

Other companies wouldn't give us straight numbers but simply ask what different price ranges vary for our customers with different types of sites and organize the ranges into low, mid-range, upper-range, and no budget. This helped us to review their needs and goals and present proposals that had some flexibility.

As a customer it also helps to tell your vendor that you are shopping around and want good value. If the proposal is going to be higher than others, you want to know what the value-added pieces are. And don't be afraid to ask for company references. Finding out how other customers felt in working with the company and what their product involved in what price range will help you even more.

Good lesson to remember. And on the flipside, it's important for service providers to remember that we are in business to make a profit, but customer satisfaction goes a long way. If a customer is pleased with the service, product, and price, they will happily share this information with others.
Chris Butler | January 6, 2010 12:00 AM
By the way, that's our very own Bettina Johnson holding up the whiteboard in the illustration. Thanks, Bettina!
Russ | January 6, 2010 12:00 AM
What is your budget? - I have a little story about this I would like to share... When I was working for a company, we were going through a redesign of our corporate site. We found a web design company we like to help us with designing front end templates and then handing them over. We told them our budget was open... They came in around $20K for design and deliverables. Suddenly the economy started to tank and all budgets and this project were frozen. 1 year passed.

We reopened the project but had other companies quote us as well. This time around, we told companies are budget is $60K, well wouldn't you know all 3 quotes were for 60K-70K. Even the company we decided on the first time around adjusted their number to hit the 60K range. And so I decided to dig up the first quote from this company and compare it to the recent quote. Word for Word identical, except the price.

I called them on it and asked why the huge differential if the quotes are identical. No real answer. I talked to the president of the company and told them this was inexusable and we dont want to partner with a company I can't trust. We ended up doint the design inhouse and were much better off.

My point is I am wary of telling anyone a concrete budget these days, because if I say its 100K, then I will get quotes for 100-120K. I would rather talk about what I am looking for and what is being delivered and price that out accordingly. Just my take.
Chris Butler | January 7, 2010 12:00 AM
I was intrigued by the discussion around budgets that was forming here, so I added a question to our LinkedIn group about how people tend to handle budgetary discussions in the sales process. You can follow that discussion here.
Chris Butler | January 8, 2010 12:00 AM
Russ,

I hear you. I was a freelancer for a while before I started at Newfangled and had all the same issues you mention. I encourage you to check out the LinkedIn group discussion I linked to in my comment above. There are many different perspectives there on pricing.

At the risk of bugging you, I do want to say that I think what you're saying about hourly pricing amounts to essentially subsidizing your clients' projects. You seem to be saying that you have an hourly rate, but in reality it's less because you take longer. If you're scared that you'll never be able to charge for what it actually takes to get the job done, things may end up looking bleak to you if you ever start to burn out.

Chris
Russ | January 8, 2010 12:00 AM
I wasn't so alarmed by the cost increase of the newer quote, but for the sales person to just dig up the old quote and double the price and keep the entire proposal verbatim - simply dumbfounded me. I mean c'mon...

You want to charge more, thats fine, but you need to justify it as well in writing in terms of value.

I have moved on now and am a web designer myself. The biggest problem I have is how to quote potential clients.

Hourly - I just dont feel comfortable with hourly because I usually take probably longer than normal with design and development - because of how specific and detailed I try to be...And I think this is a good thing for the client.

I currently charge by the project because it just seems easier to manage... but prices are all over the place. I looked at a model where a company charged $4000 for a 10 page website that was standards compliant, looked good and he targeted more cash flow businesses. I thought that was great and he definetly had clients, but I think this outprices many mom and pop shops such as a local landscaper of such...

I struggle with how to structure pricing... and its hard for me to market myself going forward if I cant get this straight...
Andrea Norman | January 23, 2010 1:22 PM
Great comments! We always offer two -three options when we price the site. Prices for good websites are all over the map, whether we know the budget or not. I find that more often than not we have underpriced our sites. However, depending upon your company's clientele, your experience, and your costs, you may be willing to underprice to build your portfolio, develop a relationship, get publicity, etc. We recently conducted a price study and found that the prices for a five-page website ranged from $5000-$30000! The range was astonishing. When clients do push back on pricing, often, I find that the client is not comparing apples to apples. They may get a quote from a vendor that doesn't include copywriting or SEO or project management. The conclusion I have reached is to base your prices on costs and profits and let the clients decide. Then, you are not pricing based on what you think the client can afford, an approach I think lacks integrity.
Chris Butler | February 3, 2010 11:39 AM
Andrea, That range makes a lot of sense to me and you're right that comparisons are often not between appropriate options. Did you check out the discussion on this topic that is on our LinkedIn group?
Jessica Wolbert | February 22, 2010 5:52 AM
@Russ @Chris @Andrea

We've done a lot of brainstorming as well regarding pricing. We are one of these companies that doesn't mind giving customers an open ended quote when they come to us, but experience some difficulties along the way.

Scenario 1:
ITH: What is your budget?
Customer: Not sure?
ITH Ok, let us know what you want....
If what they are requesting costs $2000, we'll charge $2000.

Scenario 2:
Customer: Our budget is $60,000.
ITH: Ok please describe to us what you need?

end result....what the customer describes only costs them $4000, so we charge $4000.

Scenario 3:
On the other hand, when it comes to open ended estimations, we've been burned too many times, by customers who told us what they wanted, we estimated, and then they said "that's way out of our budget". Time wasted.

Its sad that companies like the one Russ dealt with are pulling the integrity out of the business by not offering transparent billing. Makes it harder for the rest of us to build trust with the customer.

Open ended estimation carries the risk of wasting time and resources on low probability prospects.

Whats our best road? Scenario 1, 2 or 3? Suggestions on the 'open ended estimation' route?
Chris Butler | February 22, 2010 10:14 AM
Jessica, I think Scenarios 1 and 2 are pretty sound. Not every client is going to have an accurate sense for budget and may need your help to properly allocate one. That said, you don't want to do a bunch of work that helps them allocate a budget only to have them not spend some of it with you! That's where Scenario 3 gets tricky. I think you're right to be cautious with those situations. This is also where historical data can really help you. If you're sticking with your core disciplines, you should be able to look at past projects and estimate that projects like "___" for companies like "___" tend to cost "___." At least that's a more concrete starting place than giving a lot of time toward establishing an estimate that may be well beyond your prospect's means.
Ed | June 15, 2010 7:13 AM
I think the questions you pointed out are excellent to address before the project starts, but as you mentioned, often times folks get brought in and the ship is already set on course.

A couple of things that can result from not answering the questions at the beginning include:

1. Scope creep
2. Building something that works for what customers said they needed, as opposed to what will actually get used.
3. Missed market opportunities (focusing on the wrong demographics, the wrong value proposition, etc).

Do you have any advice on how to get the best possible result even after there is already momentum?
Chris Butler | August 7, 2010 2:05 PM
Ed,

If you don't have the luxury of backing up a bit and reframing the problem as it exists today with the time and resources available, then your best bet is "phase 2."

Many of our projects begin with pre-established limitations and schedules that are not always adequate for what the client desires or expects. While we can often effectively show that to be the case, it doesn't change the fact that in managing expectations, we're probably going to cause some disappointment. You don't want to downplay that at all. Disappointment can completely change the working dynamic between the parties involved, if not deflate the motivation and resulting working pace of your client. A demotivated client is guaranteed to result in a failed project. So, that's where "phase 2" comes in.

Phase 2 will include all of those additional elements of functionality that don't fit within the scope that your initial budget and timeline allow. You can plan the timing of it--specifically how long it might take and when makes the most sense to begin it after the initial site launch--as well as the budget. This gives the client a better sense of the long-term vision for the site and your relationship. Knowing that you have a long-term vision will encourage your present working relationship and make them feel more secure in the present work itself. This is also an opportunity to identify functionality that the client may want (and have even budgeted for) that makes more strategic sense to release later. For example, many times your client may become overly ambitious about their content strategy and desire newsletter, whitepaper, blog, video and audiocast functionality for first launch without having thought through who will create all this content, when they'll do it, and how often--particularly if only one person has been charged with the responsibility of maintaining the website. In this case, you can recommend that some of those items be saved for Phase 2, at which point everyone will have a better sense of what they can realistically achieve.

Hope that helps,

Chris
Bjarni Wark | February 22, 2012 5:06 PM
Nice article, regarding website costs/quotes, I ask the client to write a "shopping list" (detailed brief questionnaire I have for them to fill out) of what they think they need/want/purpose and ask the budget for the project at hand too, from that I can say what can and cant be done within budget.

For those who dont have a budget I briefly explain some of the cost factors, eg design (layout / graphics options), development, keyword research, copy writer, photography, mobile etc etc, when knowing what they are wanting from that things can be added or ticked off to form a rough costing which helps them to then see where the costs are coming from and if they have the budget for it in the first place, "quick and easy".

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