At a crossroads

[bruto]

Hey fellas,

First time poster, long time lurker here. I've worked as a freelance web developer for the past 6 years, and, although things have not always been easy, I've been able to sustain a steady and decent income until recently. I specialize in CMS-powered and e-commerce websites and, in general, most of my clients are SMBs. So, what's the problem? Well, it's simple, lately I'm finding it incredibly hard to get businesses to accept my proposals. Granted, it's not an overnight thing, it's not that last year they were all happy with my fees and now they aren't, but I suppose over the last two years or so, there's been a downward trend as far as fees go. 

Now, I have an idea why this is happening. In the country where I operate, the average fee for a simple, static website is in the region of €300-350, and for a CMS website not that much more really. E-commerce websites normally command a higher price tag, but we're talking sub €1,000. My fees are significantly higher than these, and, honestly, no matter what I tell prospective clients, they just plain refuse to listen to my arguments. 

They simply don't care. They don't care whether their websites are all based on poorly coded templates downloaded from the Internet, they don't care if hundreds of other websites look exactly like theirs, most of them don't care if their website loads fast or slow as hell. In fact, they don't even care about security, as long as it's "secure enough".

I suppose all of this is to say that I'm no longer competitive in this crap-as-hell-and-cheap market. My high quality, specialized services are no longer valued, or even needed. This has put me in a very awkward position, to the point where I need to radically change my strategy or simply close up shop.

Honestly, the only alternative I see is to basically follow suit, stop creating handcoded, unique websites and just sell template-based ones for the average going fee, significantly lowering my standards along the way. I could do that, but every single cell in my body shivers at the mere thought of it. It's just sad, I got into this business because I like to solve problems, and I've always thought that people pay me precisely for that, to solve their problems.

So, here I am now, asking for your opinion and advice. What would you guys do? Have you found yourself in a similar situation? Should I close shop? Should I become a template monkey?

Thank you all.

[pwired]

Thanks for sharing this with us.

What you are saying I recognize happening the last 5 years in my own customer field,
even similar prices you mentioned 300 - 350 - 1000 €. Not only in websites but in general also.
I see more and more china shops popup and more people buying cheap china stuff. They care
less for the quality shops. So I guess it's also part of a bad going economy.

It's not something you can solve just by trying to find "better" clients, or telling them that if they
want a cheap solution, they have to go to another website builder.

On top of that there is a lot of competition in building websites. The bigger clients/companies
won't ask for your services because they already know an established coder/designer. Other
competition is a growing number of handy wordpress guys who quickly plug and play copy and paste
something with a theme. Another problem is that some clients are impressed by how it looks on
the outside and don't care much about what is going on in the back end. Hence the growing popularity
of cheap trick wordpress. I think the old "divide and rule" will help something. Just add out of the box
(templated) websites to your services. Tell the client if he goes for a cheap out of the box website,
you can always add more needed functionality to it afterwards, payed of course. Just tell this very
clearly in the beginning to your client, so there will be no "yes but . . . ." afterwards. Further you can
use the experience and knowledge you already have not only for building websites for others but also
for building and exploiting your own on-line shop.

[Joss]

There seems to me to be a growing misunderstanding of what a website actually is.

Leaving aside ecommerce, which is a very specific and obvious function, I think many companies look at a website as basically another advert.

My background is in above the line media, especially TV and Radio, and I have spent a huge number of years creating adverts that bring a customer to a clients door. Once they are there, it is the client's responsibility to make sure the customer buys something, gets some sort of satisfaction or service and wants to come back. 

It is a very simple, linear process.

When website designs first started, there intent was a little more blurry - they were not quite an advert, nor a brochure, could contain a huge amount of information and could be as stuffed full of words as you wanted. A lot of companies seem to work on the principle that if people found your website, you should give them lots of value in the form of information so they would then want to hit the contact button and consolidate some sort of relationship.

Then along came the SEO position developers.

They threw out the idea of value relationships and instead turned websites into instant ads. The entire idea was to drag people to the website at any cost and with any luck, get them to contact you.

The perfect SEO website is formulaic, basic, fast, uncluttered to the point of utilitarian and offers no customer value at all - that is not what it is there for. It is back to my radio and TV ads where all we tried to do is get the customer to the clients place of business; to their door.

The problem is that a website is not the clients place of business. There is a very good chance with an SME that it is impossible to monitor it, have live chat or anything else that a customer would get if they actually turned up at the place of business. The site is just another ad - so all that has happened is that you spend possibly a lot of money on SEO and online advertising just to persuade people to go to a web address to simply see another advert .... probably a not very well designed one at that.

But that is where we are at. Companies that make their lively hood online are spending money on their websites because those really ARE their businesses. But companies that are using the web simply to tell people about themselves are being persuaded by cheap, SEO orientated marketing companies to produce low value, template based, formulaic adverts that address no brand considerations what so ever. Indeed, my very little experience with these companies trying to sell ME a website for my music company has shown that they never ask a single question relating to my brand, brand values, product targeting or the million and one other facts that are kind of basic for any serious advertising campaign.

I can write copy that will make a company dance and sing - I really am very good at it. I can make cute things dimple like a Disney princess, make serious services like lawyers sound like sage advice from your favourite grandpa, or make your garage service sound like the best thing since sliced Model T Ford. 

But that does not fit with the formula. Copy and design like that needs research, time spent with the client and that thing that scares people most of all -  imagination. And none of that is cheap.

The hard part is persuading the client that the monthly standing order he is paying for the seo driven, same-as-everyone-elses template site might be getting him a handful of orders, but in the long term could seriously undermine his brand. 

I have no idea how to do that as I find more and more that when I deal with people and talk about the importance of brand, of good customer relations and of building something of value, that they look at me as if I am talking a foreign language.

I am beginning to feel a little old!

[Beluga]

€1 000 for an ecommerce site is simply exploitation. I did some research a while ago on average cost of websites - can't find the same results right now (there was a nice survey), but found some others.

From executionists.com:

Client Two: Ecommerce Website

This mid-sized business needs a marketing website and ecommerce for their product line. They have an offline brand/logo and some design ideas. They will provide the content for their website which consists of text, headshots, logo, product photos and PDF downloads. They provide a short list of websites they like during a meeting that our Project Manager, Art Director and Tech Director have with them in our/their offices. They have a merchant account.

Estimate is as follows:
Interface Design: 24 hours – will include some Flash design
Programming: 60 hours – HTML, PHP and CSS plus integration and customization of Php-based cart for online shopping.
Project Management: 30 hours
You can expect to pay a little more for the hosting and an SSL certificate
Total: 114 hours = $10,260

http://www.howmuchdoesawebsitecost.com/averageweb-design-pricing/

The "Web Design Calculator" of webpagefx.com gave $3 000 as the minimum price for a basic ecommerce site with nothing else, even styling. With moderate styling, standard CMS features and advanced level ecommerce the price range went to $10-21k.

[totoff]

Hi bruto,

this is all very sad and discouraging to hear. Are you in the south of Europe? We all know that economy is very low there and there is very little you can do as an individual to improve the situation.

However, I'm a believer in marketing strategy and if my rates would go as low as yours I would first ask myself whether I want to stay in business or not (as you did of course). Second I would ask myself about my unique selling proposition: Is there something unique in my work that sets me apart from the competition? Do I communicate my USP clear enough (read: do people understand what sets me apart)? And - last but not least - is my USP relevant to my customers?

Finding your USP is not an easy thing but - if it matches a customer demand - the only thing that can move your business forward and raise your rates. In my personal opinion the best way to create uniqueness in the field of web development is via a unique design language. I've never come across a customer who was able to value - or even understand - the technique behind his website. Processwire? Wordpress? Easy to maintain? Future orientated, secure, lean and fast? They simply don't care. But if it looks "nice" and outstanding, they feel emotional involved and "touched".

Hope that helps a bit.

[Joss]

There is another issue here, one that applies to CMSs in particular.

I think it is really important for small companies (5 people or less, perhaps) to be able to update their website themselves - for many small companies, a monthly fee is not realistic for the amount of value they are going to get from the site.

However, I have been stunned by the number of company owners who simply cannot put together two words in any meaningful way, or even in a grammatical way. 

We seem to be in a situation that being able to use Facebook or some communication app is seen as more important than actually being able to write; it is as if the software will somehow make you a great communicator without you having to try.

I just don't get this. Thanks to the way the internet works by default (text on screen), people read more than ever, even if it is just a chat message. And yet, their communication skills, the ability to use words clearly and nicely, seems to be getting worse and worse.

And then businesses wonder why they don't get work?

All a bit sad, really.

[yellowled]

I've never come across a customer who was able to value - or even understand - the technique behind his website. Processwire? Wordpress? Easy to maintain? Future orientated, secure, lean and fast? They simply don't care. But if it looks "nice" and outstanding, they feel emotional involved and "touched".

Granted, there's a lot of truth in that statement. However, there is another perspective that small businesses can value in a CMS – the way it can make maintaining their web site easier, saving them time, effort and, well, nerves. Everyone who has worked with PW will agree that it makes it very easy to customize the backend to a specific user's needs and ability.

Now, that is something most people understand very well since they have usually at some point in the past tried to build and maintain the web site themselves using, let's say, not-so-great tools like your typical “1-click web site construction kit” provided by their (cheap) web hoster. Those clients usually can be pretty impressed by how a customized backend can be way less frustrating for them and help them actally fulfill their day-to-day tasks (let's face it, for most small business clients it's more like month-to-month tasks).

I have never considered myself to be an artist or something, in fact I even have my difficulties with “designer” (especially since I don't have a formal education, much less a degree in that field). I consider myself to be a craftsman. However, with small business client's, I often find that it's necessary to also act as a consultant or even advisor. As you stated, most of these clients don't know much about our craft or the tools we use – moreover, a lot of them don't even know much about the internet and marketing in it. If they do, their knowledge is outdated.

I guess what I'm trying to say is what can also help is to communicate to small business clients is that what you (in addition to your craft) provide is help. (In fact, one of my clients literally refers to me as his “web site helper”.) They won't get much help and advice from any cheap chop shop selling them a generic rip-off design, and it's something some of them might be able to relate to.

[bruto]

Hey all,

Tell the client if he goes for a cheap out of the box website,

you can always add more needed functionality to it afterwards, payed of course. Just tell this very
clearly in the beginning to your client, so there will be no "yes but . . . ." afterwards.

This is a hard pill to swallow for many of the businesses I deal with. To give you a concrete example, there's a particular company in my area that is able to provide e-commerce websites, with unlimited products, PayPal and EPoS integration, multilingual setups, etc., for just €399 (no, it's not a typo). This is a very popular company in my area, as you can imagine, and some prospective clients are quick to mention them when I tell them about my fees. What's even worse, clients seem to think this comapny is actually good, and so they just don't understand how they can charge 10 times less than me. Then I explain to them why this is the case and all of that. The bottom line? It's extremely hard to compete with companies like this one, with plenty of resourses and very aggressive pricing strategies.

There seems to me to be a growing misunderstanding of what a website actually is.

You're absolutely right!

The problem is that a website is not the clients place of business. 

Again, I couldn't agree more. I've found that, in general, businesses see their website as a nice thing to have, but at the end of the day, they just don't put any value on it. What's worse, once they have their website, they simply forget about it. It's there, sure, but just as a stationary thing that no one pays attention to. This is precisely one of my selling points, I don't just build your website, I also guide you through using it in an appropriate and effective manner to achieve your goals. On hearing this, they are excited. On hearing it comes at a cost, they just say, well, don't worry, I think we can manage, so can you lower your fees now, please?

 

Joss, I hear you when you say you're stunned by the number of company owners who can't put two words together. I've been there. This really emphasizes what I was saying before, that they don't see their website as something valuable. If they did, they wouldn't fill it with typos and gross grammatical errors.

 

I still haven't made up my mind as to what to do, but the more I think about it, the more I think I should leave this field and do something else. To be fair, it might be the case that I'm in this situation due to my own incompetence to sell my services and to convince people that I'm valuable and worth their while. I also know that I cannot compete with companies like the one I mentioned before. I don't know how they do it, but I can't create an e-commerce website for €399, I just can't. And, for as long as they are in business, and they seem to be doing quite well for themselves, clients will increasingly turn down my proposals and go with theirs. Sure, they're getting a crappy website,  but they don't care. All they seem to care about is the frigging price tag and, as long as that's low enough, they're willing to put up with crap.

 

Maybe I'm seeing things that aren't there, but I clearly see a trend, not just in web design, but in just about any field. I'm seeing a society that puts less and less value on quality, authenticity, craft, beauty, a society that only seems to care about going with the lowest denominator, with the cheapest price. To see this, we just need to have a look at the things we buy on an everyday basis, mostly crappy stuff "made in China", which is something pwired mentioned above. I'm as guilty as the next person, all I'm saying is that perhaps one day we'll wake up to realize we are surrounded by pieces of shit and that no one seems to remember how to create high quality stuff anymore. Just sayin'.

[teppo]

To give you a concrete example, there's a particular company in my area that is able to provide e-commerce websites, with unlimited products, PayPal and EPoS integration, multilingual setups, etc., for just €399 (no, it's not a typo).

I get that this is just a small part of a much larger issue, but as a concrete suggestion to a concrete example, there are couple of ways to achieve this: a) they've got a very sophisticated platform of their own, b) they're using one from elsewhere (such as Shopify) or c) for that price they install an out-of-the-box e-commerce solution, do minimal work on it and that's it.

Not trying to be depressing here, but if an out-of-the-box solution really what the client wants and needs, that's what they should get. If you want to compete with companies like that and offer your services for clients with such needs, I'd suggest looking into existing solutions -- preferably ones provided as hosted services.

If a client wants something entirely customised to their needs, I can assure you that no one can provide it for 399€. Not unless they're counting on making profit from the monthly fees in a long run, in which case the price of the project itself can be much lower than what it costs for them to build. I still very much doubt that anyone would do a >10K€ project for <500€, that's just too much of a stretch.

The key here is that uniqueness, authenticity, adhering to specific requirements -- and generally speaking any work that requires involvement of a real person with real ideas -- cost. You can't get all that for couple of hundred euros. For the clients that appreciate this, a bulk product just isn't going to cut it. For those who don't, it's probably pointless to even try to sell it.

Out of all the great posts on this thread already, I really liked what @yellowled said about "saving them time, effort and nerves". That's one heck of USP (as explained by @totoff) if you do (and communicate) it right. As another concrete example, we've been involved in projects that have literally cut a weeks worth of manual work to an hour or so of waiting for a background task to run. It'd be pretty hard for a client to not value that.

I'm sorry that things are difficult for you and really think you're right when you say that people don't appreciate craftsmanship much these days. It's a sad thing, but all I can say is that you'll have to either find a way to provide good quality with minimal effort (out-of-the-box services) or find a way to attract clients that do appreciate this. I know that neither is really an easy way out, though..

(For the record, I work for a company that provides web-based solutions ranging from the most basic self-service platforms for small companies and individuals to entirely custom-built ones for large corporations, cities/municipalities etc. For some clients we handle everything from content to marketing and some prefer to do these things themselves. There are clients for all of our products and none of them is perfect match for all of our clients.)

[totoff]

a) they've got a very sophisticated platform of their own, b) they're using one from elsewhere (such as Shopify) or c) for that price they install an out-of-the-box e-commerce solution, do minimal work on it and that's it.

d, they sell after-sale-services and the total cost of operation/ownership during the lifecycle is not transparent to the client at the time the contract is signed. the core product is just a trojan horse, a strategic offer (as it is for many hosting companies, just to name an example).

[Joss]

Totoff, yes, I have seen this where the initial WP site is perhaps three hundred pounds but then there is a monthly management fee of 200 over a three year contract.

[totoff]

there is a monthly management fee of 200 over a three year contract.

nice. wouldn't say no if one of my clients would ask for such a service 

[bruto]

Hey all,

[…] all I can say is that you'll have to either find a way to provide good quality with minimal effort (out-of-the-box services) or find a way to attract clients that do appreciate this. I know that neither is really an easy way out, though..

(For the record, I work for a company that provides web-based solutions ranging from the most basic self-service platforms for small companies and individuals to entirely custom-built ones for large corporations, cities/municipalities etc. For some clients we handle everything from content to marketing and some prefer to do these things themselves. There are clients for all of our products and none of them is perfect match for all of our clients.)

Thanks for this, Teppo. This is something I've known all along, but sometimes one needs to hear it from another person.

I've slowly come to realize that I've always seen this web design business as a black and white thing, you either provide hand-crafted, high quality stuff, or you provide templated, and often crappy, bulk items. But, in fact, this isn't necessarily true. I think there's a balance to be struck here, a middle ground to be found between the two extremes. 

 

I admit I have a passion for beautifully coded and designed websites, and a visceral dislike for careless code and ugly crap. This has blindsided me. In a failing economy like the one we have in my country, not many SMBs are prepared to pay €10,000+ for a website. It's not even that they don't value quality when they see it, it's just that they're struggling to make ends meet, so shelling out such an amount of money for a website is simply not an option.

 

Now, there's not much we can do, as individuals, to change the fate of our economy, but what we can do is choose how to conduct our businesses within the constraints of that economy. I think diversity is key. If people want sub €500 websites, let's figure out a way to give them that and still make a profit. As quality is not really what they're after, our time and effort to create these websites can be kept to a minimum. This can be done by using turn-key solutions like SquareSpace, WordPress and the such like. Granted, these websites are not going to end up on display in our portfolios, but they help us sustain our business while we go after the bigger fish.

 

To be fair, I've never wanted any part on this turn-key, out-of-the-box business, but one has to pay the bills and the time has come to be a pragmatist.

[dazzyweb]

I've been thinking about a few of the points mentioned here recently.

A lot of people seem to have the opinion that a website should be for free and seem to resent the fact that they have to pay much or anything at all.

Sometimes I think it is because of the nature of what websites are. It is not something that can be touched or held in the hand, not a physical object.

Also I think that many don't have an appreciation of the thought and time that can go into developing a site. A lot of the blame for this can be put down to free and cheap templates out there that can look quite impressive at first glance. It can be tough convincing someone to part with a lot more cash for a bespoke design especially if they are on a tight budget with so many nice looking free and cheap wordpr**s templates around. 

Here is an interesting article I found regarding what's wrong with cheap websites.

http://joelhughes.com/2014/02/28/whats-wrong-with-a-cheap-website/

I think it makes some good points.

[Joss]

Interesting link that.

I have made similar points with main stream advertising. For instance with music: if an advertiser has a piece of music created by someone who has no artistry, then even if all the messaging is perfect, the advert will completely undermine the brand.

The biggest mistake any company can make is to underestimate their audience. It is not uncommon for a company to think they can throw any rubbish at potential customers because "what do they know?"
 

What is forgotton is that every listener to adverts or users of the web use thousands of websites and most of those will be by huge companies like Google; what ever you think of them, these companies will have websites that work perfectly for what they are doing.

The result is that even if the customers cannot appreciate what the technical or design differences between a good or bad site, or a good or badly produced piece of music, never the less, they will sense that it is cheap and nasty, and that is how they will judge the company.

If you want to completely undermine a brand, even a well established one, commission something that people will view as being "amateurish."

Always remember the lesson of Gerald Ratner. During a conference, he remarked, "People say, "How can you sell this for such a low price?", I say, "because it's total crap."

Although customers knew his stores sold low quality goods, at least they had been treated like good customers. His statement completely undermined the brand and the customers simply stayed away. It knocked £500 million off the market value of the company.

An imaginative, or clean, clear and well written website does not need to cost more money that a crap one - but the damage that can be done by a site that is badly made, poorly written and pays no attention to the brand could cost a client a fortune. Maybe their entire business.

[totoff]

Hi,

as Joss is mentioning ads several times: one aspect that drives me mad is, that clients bargaining for every Euro for their website at the same time spent much money on ads that do exactly nothing for them. Recently a client of mine gave > 2000,- Euro for an ad (one small single ad in a zillion years - no one will remember it tomorrow) while we had several rounds on negotiations about his website which was not that much higher in price. Crazy isn't it?

[Pete]

d, they sell after-sale-services and the total cost of operation/ownership during the lifecycle is not transparent to the client at the time the contract is signed. the core product is just a trojan horse, a strategic offer (as it is for many hosting companies, just to name an example).

e) they're outsourcing to a country with a lot cheaper workforce. My money is on this.

[Pete]

bruto and others - is paying a company to pass you leads not an option?

I've never looked into it myself, but one web company I worked at did this and obviously gave the lead generation company certain criteria so they were only passed businesses of a certain size etc.

I've no idea of the costs of these sort of things, but I do know that that company only tended to work with companies that could afford the services, plus only being given leads that had been filtered in some way meant there were less time-wasters.

"Time-wasters" may sound harsh, but we've all been there along with bruto - putting together a detailed proposal over hours (or days) only to have it knocked back because somewhere else can do it for a tenth the price even though it'll be crap.

Anyway, I've no idea what such companies charge (usually it's per lead though) or whether there's one in your area, just that I remember working somewhere that got their customers this way. Well, there was obviously then a phone call and a meeting to spec it out and deciding whether you wanted to work with the customer, but it basically meant they could focus their efforts on customers who were serious and had more reasonable budgets with the bonus of not having to spend tonnes of time on marketing - though they may have spent tonnes of money, but it was profitable as they're still in business now.

[dazzyweb]

I just read a nice article which I feel is related to this topic: How we use feature based development to give better quotes.

https://offroadcode.com/blog/1519/how-we-use-feature-based-development-to-give-better-quotes/

There are many points there regarding pricing and dealing with clients that can help.

I like the idea of breaking needs, wants , wishes and targets into different parts.

I think this can really help with the process and building for the client what he can actually afford while at the same time not overworking your original quote or doing more than what you are paid for.

[Pierre-Luc]

There are multiple strategies you can use. A lot of times, the problem with clients is cash flow on their side. They will see this 4000$ bill and tell themselves "there's no way we can pay this right now". If at all possible, look at payment options. 

Do you specialize in a specific market? This could help word of mouth referencing and you can develop ready-made modules and templates you can start with, instead of starting from scratch every time. This could help you reduce development time while keeping the same salary (you're selling value, more than time!). It might be interesting to offer both time- and non-time-based contracts. You might have 6-7 websites to do in a month, all requiring tops 2-3 days of work but still have enough cash flow to pay bills and luxuries. If one ever takes a bit more, the loss you're making there will be compensated by the others.

I don't know how you manage your projects, but scope limiting can also help you gather contracts (the ones who pay less could cut on features). The problem is that you then have more contracts but sometimes they're too small to be worthwhile.. Try looking at having a few retainers. Bigger customers are more encline to have retainers and are typically those who'd have more money too for tailored websites. This is a plus, but retainers are harder and harder to find it seems.

Or you might be interested to join a startup and create larger size projects. There's a few options out there, I'm sure there's more..