Posting prices - more thoughts
My web firm added a pricing page in November of 2007. It has invaluably helped us advertise to our target audience. We feel our time can be better spent doing something productive rather than spending two hours with a potential client to find out their cost expectations were way off.
Compare that to Yani's comment:
Posting prices does more harm than good. Many clients will disqualify you the moment they see your fees.
Which seems to be the prevalent belief. My question is:
Why is this Bad?
Why is it bad that a client might disqualify you if they see your prices? I suppose if you have no emergency fund and only have one or two clients that only give you 50% or less work, this feeling might be understandable. But let's think logically.
- You don't post your prices: Time you spend: 0 minutes
- So clients have to call or email you just to find out what you charge. Time you spend: 0 minutes
- Assuming you don't have a standardized price list, you'll then need to spend some time with them on the phone or via email getting a description of their needs. Time you spend: 30 minutes to 1 hour.
- You'll send them a bid, and unless you bid something ridiculously low, they are desperate, or they had some other reason to want to use you, they'll come back with a counter. Time you spend: 15 minutes reading their counter.
- Unless you put in a huge amount of pad, or you really want the client, you'll try to explain why their counter isn't realistic. Time you spend: 30 minutes to an hour.
- If they're cheap, they'll say "thanks but no thanks". If they're not, they'll probably argue with you more. Time you spend: 5-15 more minutes.
Result: No client, and you've spent at least 1 hour and 20 minutes negotiating with them. And you could have spent even more time. Using Tony's pricing page, that's $167 you can't get back.
And say they do decide to accept your proposal after step 5, you've spent 1 hour and 20 minutes negotiating, and you can't get that time or the opportunity costs associated with it back. So that reduces your overall hourly rate for that project.
Contrast that to a client that reads your price list and decides to go with you. Since they already know your prices, all you have to do is write up the specific proposal for them. You'll have to go through all the same steps, but you know that unless you can't or won't do something they want you will have a job at the end of that process. At least, they won't be scared off when you quote the price.
Prices are listed on all types of things we buy, both products and services. Making your clients ask for the prices might not scare them away, but can you afford to deal with the cheapskates who really should be scared away?
Well, yes – I agree with the point made in this post. I would say why not put a price list (in case you put one) on the site with:
$__ per template, $__ per template page, $__ per non-template page, $__ for a login system, $__ per feed, $__ per flash animation, $__ per separate PHP script, etc. (these are just examples)
Instead of a solid price, and put a calculator up to make the math for the customer and tell them what their request will cost total. And put beside that some example packages up (maybe with discounts) with their full prices, and descriptions to clarify. I wonder if there is a flaw (and where it is) in this logic…
Hmmm… interesting point. However, it doesn’t mention conversion rate. By not including the price list, you immediately get an opportunity to discuss the clients’ expectations and budget (asking about budget is usually teh second thing I ask once I have get a basic handle on what they are hoping to have for thier money). It’s also fair to say that most people, when talking about budgets will find a little more than they initially start negotiating with.
I recently worked with a company who supply IT asset management systems for medium to large enterprises (yeh, I know, a slightly different market to freelance web design!
) whose sales force have a 97% success rate once they are able to secure an appointment, so the whole purpose of the site was to genereate leads for that team.
I think the same purpose is valid for freelance / small scale web design compaies. You are (usually) your own best advocate, you know your business & skills better than anyone, so if not putting prices on your site means that you turn down a couple of clients who turn out to be ‘red flag’ having spent a short (no more than 30 minutes) then that’s the speculation. I would suggest if it takes 2 hours to identify a red flag you need to revise your pitch / client assessment agenda.
Having said all that, if you’re offering something that is a fixed price for all clients, such as hosting related services, there’s no reason not to publish them, but for design, development or consultation work I think that it can be harmful and lose more clients than in gains.
I struggle with this one. I think it is important to give some idea of price (to pre-qualify leads) with pinning yourself down in an industry where every project will be different. Perhaps a “custom sites starting at…” and “ecommerce sites starting at…”.
If any of you figure out the perfect solution, please post it.
After reading Tony Chester’s ‘How much will it cost?’ [That's a total of 200 hours spread over a two-month period. At our standard $125/hour, you're looking at roughly $25,000 for a simple redesign and a content management system.], I understand (beyond any doubt) they post the price in their webpage.
Jennifer, I would like to know if there in the States (I’m Spanish, ¡encantado de conocerte!) 25.000 per project is standard in some way. It is obvious that they (onWired) are really great on what they do, but what about the average Web-Designer-Joe?
SB:
Well, I don’t know what the average project would be across the US, but $125 per hour isn’t out of the range of possibilities for hiring a Web design firm to do a redesign or other work. I would say that the average designer, especially one that is working on his or her own probably charges more in the line of $75 per hour, but it depends upon your needs.
I *strongly* recommend that you base your hourly rate on what your costs are and not what some perceived “average” rate is out there. That way, if the average rate goes down, you aren’t suddenly underwater because you’re trying to pay your bills on half as much money.
How to Decide on a Fair Hourly Rate for Web Design Work – http://webdesign.about.com/od/pricing/a/hourly_rate_for.htm
Well, this may be a variant view, but I have to respectfully disagree with Jennifer. With the internet, things have changed drastically and I think most freelancers haven’t changed with it.
Granted, most things we buy have a predetermined price, but that doesn’t prove this is the best approach. Professional chemistry is everything. Fact is, most potential clients don’t know what they want specifically, they only have a general idea. Likewise, they don’t know exactly what they should pay, only a general idea.
When you post prices, you are an employee, this is what you will make and not a dime more. When you post quality samples and talk about price, you are an entrepreneur able to win a client not for one project, but for life.
Yani
I read this blog: http://freelancemoney.wordpress.com
$25,000 for a content management system? Holy cow! His designs are nice but I think that’s insane.
My clients get a Joomla CMS and really good instructions for between $500 – $4,500.
Also I don’t believe in pricing by cost in the web or programming business. Charge what the market will bear.
Having said that, I’m going to clone allgoodweb.com to really-expensive-websites.com. I’ll change the price to $25,000 per site. … I’ll let you know what happens.
Excellent site webdesign.about.com and I am really pleased to see you have what I am actually looking for here and this this post is exactly what I am interested in. It’s taken me literally 3 hours and 27 minutes of searching the web to find you (just kidding!) so I shall be pleased to become a regular visitor
Just saying hello to you all .. Still a bit confused about the goings on here, but I guess I’ll keep poking around.
At the end of the day, if a customer is looking for a web solution that does not perform then post a standard price. In my experience there are a massive number of factors to take into account when costing a website. Especially when clients expect SEO to be included. A number of clients have come to me with nothing and therefore the initial task was to try and understand there business…
I certainly think that if you take your role seriously it is impossible to post prices unless you have a good framework and terms and conditions of development nailed down tight.
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thanks a lot for this