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Setting Fees For Web Design

This article provides some background about my experience with pricing web design.

Like a lot of web designers, my business started rather innocuously - a design for family or friends. I was taking a master's level course in Java programming and used the knowledge to transform my parent's site from a mess to a productive extension of their business. As the site got successful, it was inevitable that someone would ask if I could design a site for them.

The Problem:
How do you price web design?

Solution #1: Ala Cart

Ala Cart is also known as buffet style (although this option is very much menu style). With ala cart, you price everything you can do individually and let the consumer completely customize the services they want.

This was the way that I originally started my pricing, but it has lots and lots of problems. First, it is overwhelming, both for the consumer and the service provider. I had to decide things like "how much should I charge to..."

  • Optimize a picture
  • Add a web page
  • Change Text
  • Add a hit count
  • Frame a picture using photoshop
  • Create an email account
  • Add meta tags
  • Scan a picture
  • Create a favorite Icon
  • Add a form

Logically, you would want to break each item down by time and then multiply by a fair wage. At that point, you actually run into another problem -- what is a fair wage for my services? Well, let me put it this way: I am getting my Ph.D. in instructional technology and I often see postings for recent master's level graduates in instructional design (ID). The skills required by an ID professional are very similar (and in fact much more complex) than those required by a basic web page designer (who does HTML and a little bit of scripting). The starting pay for most of those jobs is $10 - $12 an hour. So, how much should a web page designer get? My thinking is that $15 an hour is probably right (although maybe even too high). Now, I am not talking about someone who provides comprehensive marketing services and is conducting expert programming - those people certainly can command a higher wage - but most of the web pages I am talking about are static brochures which does not take too much expertise to design.

 

UUShoe - Double Shoe Ranch

 
So, let's say you think the quality of your work is going to be $15 an hour. How long will it take you to create a hit count? Well, if you already have the script written (or steal it off someone else's site), it will take a few minutes (let's say 5 minutes), so a hit count is worth $1.25. How long does it take to write meta tags? If you really sit down and think about it, it could be 30 minutes for the first page (to determine the main keywords and write the other tags) and then an additional 10 minutes per page. So for a 5 page web site, it will take 70 minutes, which is $17.50. How long does it take to scan a picture? How about if you have to scan 5 pictures (does it take 5 times as long, or can it be done quicker if you are doing a batch)? So, how do you price it?

When I started, I set up somewhat arbitrary marks for my prices (some were just based on whether or not I wanted to do something. For instance, I did not want to scan pictures (it takes too much time), so I priced them at $2.99 per picture (high enough that I figured it would discourage people). I also didn't like hit counts that were visible counters on web pages, so even though I had the code (and could easily place them), I charge $14.99 for a hit count - and got no takers. On the other end, I knew that some people would want more than 5 pages, so I had to come up with a price for adding a new page. This was one that I wanted to be able to sell, but I didn't want to over commit myself making too many pages (particularly since the navigation I did on my earlier sites were through images, and very hard to change quickly. I have since changed my stance on this (because I recognize that creating a new page does not take very much work - just the click of a button in dreamweaver, and I am moving toward more text based navigation which is easier to change). But, I felt that $8.99 per new page was adequate (not too expensive, but not something that people would request on a whim).

Solution #2: Hourly

Some people get around all of this by just putting their hourly fee out there and then sending a bill based on the amount of time they worked on each entity.

There are some economic problems with that. For instance, although it only takes me 5 minutes to add a hit counter - and therefore only worth $1.25, I know people would pay $5 for it. The demand for the item dictates higher pricing that is not adequately covered by the time. In another example, I have been working on database generated pages for the sales portion of a web site (a dynamic catalog that is set in a way that the site owner can make changes through a web form). It took me hours and hours to refine and work out all of the bugs. Now, I am getting to the point where adding the capability to a new site takes less than 15 minutes, but the service is worth much more than $3.75 - so, charging by the hour is really not adequate. In this case, a licensing fee is probably appropriate.

But all of this exchange of money leads me to the part I hate.

"I Hate Billing"

Ultimately, the problem became billing. I hate billing customers. I know that they expect bills and know they have to pay for the services (and I know that the services are probably undervalued), but I hate having to bill someone. I wish it could be cold and automated (where your credit card was billed automatically), but I don't have the volume to support adding that service. I have adjusted my billing model to request just one payment per year because of this.

Of course, the problem with that is that if I had ala cart changes and updates, I would have to log those changes (which takes time), and would have to send a bill justifying each of the expenses.

The additional downside to this is that a customer is more likely to not add a component to his web site afterwards because he does not want to get a bill either. It is like buying a car. When you buy a car, you would rather pay for cd player if it were already installed in the car (as opposed to going to a sound store post-purchase and adding a cd player). Perhaps you would like better tires on your car, you would much rather those better tires be added in at the beginning of the purchase than having to go back to the dealer and get them added later.

I think web design has similar problems. People want a web site, and they want all of the components necessary to get their business on the web, and while they might be OK with paying up front, they do not want to get slapped with monthly charges for work.

 
 

Muddy Bottoms Boer Goats

Additionally, I like making changes to web sites when I come up with something new -- and I don't want to have to ask my clients if they want this particular component added and then have to bill them for the improvements. For instance, over the New Years, while everyone was recovering from a night of partying, I was going through and changing copyright dates on the web sites I have designed. It took me about 5 minutes per site (and I actually went ahead and wrote a script so I wouldn't have to do it for future years). So, how does a businessman reconcile this time? First off, only one of my clients told me they wanted a copyright (the rest I just added myself as a measure of protection). So, should each of them pay me for the time? How would you like to get a bill from your designer that is for $1.25 for work that is "nice to have" but you didn't request it?

It is very problematic.

Additionally, one of the sites sent me about 15 pictures. When I got them, I realized that I had to make some major changes to the page layout to accompany the pictures. Those changes ended up taking a lot longer than I thought they would. So, whereas it normally takes me 5 minutes to process each picture (download, optimize, resize, place in the page, and upload), it took me 3 hours to get through this process (instead of 1 hour and 15 minutes based on my normal timeframe). So, how to I reconcile this time? Do I charge my client $45 (3 hrs * $15 / hr) - which accounts for my time - or do I charge $18.75 (75 minutes worth of work)?

I don't like either of those solutions - mainly because I really want my customers to have top notch service. I don't want a situation where a customer is holding back on getting an update because they don't want to pay an extra $25 or so.

The Choices

It turns out that people were overwhelmed with all of the choices. What most people wanted was a website (with all of the website stuff). They did not want to have to worry about whether they were getting enough pages. They did not want to have to investigate web hosts. They did not know how to get a domain name. They did not know if it was worth $10 to add a links page. But the bottom line is that they did not want to get over billed on little things (some of which add up quickly)

To that end, I have adjusted my business model to be a package deal.

Solution #3: A Package

Although I still break down some of the prices, for the most part, I am working on a complete package web site. I will get the domain name for you. I will get reliable web hosting. I will set everything up. I will setup your email. I will make sure everything is compatible. If you want to add something to your site, I will add it. Now, I do have some exceptions and some limits, but for the most part, my limits are well outside the scope of the requests of my clients.

 

Dorper Mex

 
It turns out that most of my clients get more than their money's worth. First of all, they are getting a highly qualified web designer (overly educated, anyway), and they are getting someone who understands the business. They are also getting someone with integrity and honesty (and someone who is not relying on the money as a sole source of income).

Since the deal is in a package format, I find that when I contact someone and ask them if they want to make any updates to their site (which I do if I don't hear anything for 2 months), they do not see me as a money-hungry salesman who is only asking because I want to get more money. In this case, they have already paid for it, so my reminders show that I am interested in their site succeeding. From a customer service point of view, I think the distinction is very important.

So, what does it cost?

Ultimately, I have streamlined the 5 page site into the following costs:

Initial Design fee for the first 5 pages $99.99
Website Package: Domain Name, Annual Web Site Hosting, Annual Maintenance, Search Engine Optimization, Admin Area $399.99
First Year Total (includes design and the package ) $598.99
Each year thereafter (the package minus design fees) $499.98

The maintenance is done at a minimum of twice a month (although often more frequently), and I don't quibble about how many pages, pictures and text I have to add. I want the customer to know that I am their personal web designer and I will do whatever it takes to display their products.

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