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The most recent example is a 5-page website. All HTML, a few graphics, no bells and whistles. The cost: $5000. I couldn't believe it. Clearly the designer is taking advantage of the client's ignorance. I will feel no remorse for outbidding him by at least 75%.
I think that there are a lot of designers (mostly freelance), who are fleecing their clients with outrageously bloated prices. In most cases the client has little to no knowledge about websites; they just want to have one. No doubt are they being fed a bunch of impressive web design jargon. In the end they have no clue what's involved, but think it's a highly complex operation, so $5000 for 5 pages sounds reasonable.
What are your thoughts on this? How can we effectively educate potential clients -- who are currently being overcharged -- about this?
I see the other side of the fence more frequently. As a freelance provider, I use many resources that involve a worldwide marketplace, competing against sometimes anonymous entities in countries where $50 USD will feed their family for a week. In these scenarios, people are b****ing to high heaven about clients who pay pennies for what they value as quality work.
I survive by submitting proposals that address the client's problems best, instead of saying how great I am and "pick me pick me." I set my pricing on what it takes me to dedicate the time to that task, and ignore everyone else, high or low priced. In some cases, the proposal says "here is why you can't have it for that price, and here is why I'm asking three times that."
The largest problem I face, though, is not competition with a world economy, it's exactly what you describe - clients who have been put through the wringer by designers/developers with heads the size of Michigan and skills the depths of a glass of water. They've already been shafted with little or zero results, and are extremely gun shy by the time I get to them. My largest hurdle is convincing them that I can truly help them without having them donate an important body part.
All this, of course, without actually saying they've been robbed or that the previous designer is a hobbyist.
Five grand for five pages, sheesh it must be for Amazon or something . . . either that or I'm doing everything wrong . . .
With the amount of "spec creep" that is inevitable with any project an hourly rate has been my approach.
My method is to spec out their project, come up with what I call "core" functionality. (what minimum feature set that the site can launch with).. Then I come up with a "wish list" these are features the client thinks would be "neat" to have but aren't required for launch.
I then estimate how long each task will take in hours, then I give an hourly rate.
This way they can get the website launched for pretty much exactly what you told them, then I prioritize the "wish list" and add items to the site as they can afford them and as they want them.
Any new features requested after the project has been spec'd and estimated (spec creep) goes into the "wish list" unless they have to have it, then I make it clear that this will add to the cost of launching.
Since doing this I haven't ever had a client complain over a bill they didn't expect nor have I had a project go past the launch date because of spec creep.
Don't base your prices on what others would have charged, base your price on what your time is worth.
The problem with change of scope is that a project will get off on tangents and take more time than allotted. This makes it extremely difficult to schedule in other projects, and keep everything to deadlines. This becomes extremely relevant when you're juggling several projects at once.
The other problem is in the client vision versus reality. When they see their vision materialized, they may begin thinking "it would be better if we did it this way" or "now that I see it, it's worthless without this or that functionality." So now we're off on what is basically a sub-project, further complicating scheduling.
I resolve this by clearly defining scope, and when the second issues come up, say "be glad to - but as a new project after this one is closed." The exception is if the project takes an entire new direction, in which case we close the project as is, re-submit new proposal.
With respect to "client vision versus reality". The way I resolved this issue was to move to a Front Ahead Design when coming up with the core functionality, that way before 1 line of code is written all the screens are designed and the client can "walk" through them and we catch the bulk of "mis-aligned visions" problems.
We couple "FAD" with "Extreme programming" which has a basic mantra that can be summed up as such:
Step 1) Make it work
Step 2) Make it work well
Step 3) Make it work fast
If you only ever finish step 1, you still have something that works.
I wrote a couple articles on my blog about how to have a website for free - Google Sites, other free or low cost methods. Then I wrote another couple of blogs on basic SEO and link getting strategies (lots of links to WebmasterWorld of course). Then I wrote a "menu" of web features with prices. A 5 page Wordpress template site starts at $300 and can go to $10,000 depending on all the features that they might want. Extra features might include setting up Google Apps to handle their webmail and internal documents, a customer management system, shopping cart (ok, I guess it is more than 5 pages at this point) When the client is interviewed we select which items on the menu that they want.
It gets rid of the time wasters and the tight wads. Once they have made their free site and it doesn't do what they want, then they come back to pay. Also by explaining the work that can go into a site, they are better prepared to pay for whatever it is that they want to end up with.
To a large extent this service is consultancy work and will depend on reputation. The better your reputation the higher you can charge. As a business owner , i have often found " cheap " has got me into trouble , and " expensive " has got me into debt. It then comes back to " knowing " the issues inside out, which is what I'd rather pay for.
It can often pay to have someone independently set the specifications and objectively recommend. Sometimes it is not unreasonable to offer this as a service as part of the build , should the client wish to take it elsewhere.
Trust built through this process could be helpful and you stand a good chance of winning the business.
I think that there are a lot of designers (mostly freelance), who are fleecing their clients with outrageously bloated prices.
Let's not throw all freelancers under the bus. I am a freelancer, but I feel my pricing is fair, note I didn't say cheap. Price in this arena is tough to nail down. If you provide copywriting, photography, SEO and marketing consulting on top of the 5 page site you cite above it could very well run into 5K and possibly more. You didn't say if this site included any of those items or was just for the site without anything extra. The bottom line is you offer value and attach a price to that, if the client is willing to pay it and they feel they received the value you expressed then I am not sure where the problem is at. I don't think it is fair to simply say if you can find someone else who will do it cheaper you are somehow fleecing the customer because anyone who has been in this business more than a day knows there is always someone who will do it cheaper, call it race to the bottom, but the value and quality may not be there.
Consider this, I know some top direct response copywriters out there that will charge you 20K to write a single landing page web site. Such a "site" would be one page with possibly a few lame graphics, no navigation, no functionality, etc. However if this single site produced 200K in new orders and business did the client get a deal or get ripped off?
Further, I will add that before becoming a freelancer I worked for two established web development companies in my area. One of them refused to do any eCommerce sites for less than 100K and the other routinely charged 180K to 300K for web sites. Granted the second company built great functionality, but it wasn't worth that price in my opinion. I will also cite a case by my local city government that asked for bids on a new city web site. I was one of the bidders and I was 12 times cheaper than the next highest bid and I lost because I wasn't expensive enough! Go figure.
there is another that wants you to recreate Amazon.com for the same price.
Ran into a few of these in my day as well. They knew the cost of everything and the value of nothing.