Is Selling Cheap Services a Bad Idea?

Does selling cheap template sites cheapen a firm's image?

[danieljean]

A friend wants to offer clients a cheap, basic site. Clients would choose from several templates and colour schemes, and have a WISYWIG interface to update their (up to) 5 page site. I come in to the equation doing a simple CMS / admin section (merely adapting an older project).

There are a lot of people offering similar service, and his price tag won't be extremely competitive, although enough to cover sales costs. But I wonder, does he not risk cannibalizing his business? His main livelihood is selling custom websites for 10 times that amount. You have to sell an awful lot of cheapo websites before you make up for 1 client that decided to go cheap instead of getting a custom site. On one level, I think the practice is wrong... and then I see even the large telco's here are offering similar service ($300 off website when you buy hosting for a year).

Any thoughts on this? I'd like to hear some feedback on that idea, but this dynamic of offering cheaper services potentially cannibalizing your client-base is not specific to just that domain... have any of you been faced with this? How do you handle it?

[stuntdubl]

I think it often depends on the situation. If you can afford to turn down the less pricey clients than you probably SHOULD. Taking on less expensive clients DOES cheapen your services, and others start to expect the lower rates.

Speaking from personal experience, the "cheap" clients are often the ones who take up the most time and the most energy. The clients who are willing to pay the extra bucks for experience and professionalism are usually much more trusting and willing to let you "take the reigns" on a project.

There was a very good post recently here:
Message #10 Very good post [webmasterworld.com]

You can have it faster, better, or for less cost. Pick two.

I tend to lean toward the long-term strategy and qualitive goals, but it really depends on your model. There is no RIGHT way, there is only different ways. Just pick a model and stick with it, and adapt when necessary.

If you can afford NOT to take on the cheap clients, and produce good quality work, you will get the title of being the "high-end" designer hich can be a good thing. Then spend any downtime designing aff sites that you don't tell anyone about;) There is A LOT of "cheap" competition out there...if you want to go that route, you had better have a few good unique selling points.

[anallawalla]

It is OK if your friend creates an "independent" site that shows no links to the "expensive" site. After some time he can decide which end of the market is worth chasing.