AND WHY DO COMPANIES CHARGE SUCH DIFFERENT PRICES?
Most potential clients we speak with have received quotes from other web companies. We’re often met with: “Why are you so expensive compared to XYZ Company? Why are you so much less expensive than ABC Company?”
I can’t really explain why prices are so wildly different in the web design industry, but I think it has something to do with the nature of our industry itself. Even though we’re in a time where EVERYONE uses the web to do daily things: banking, booking appointments, etc., there seems to be this cloud of confusion hovering over the industry and I think it has to do with some web companies’ lack of transparency.
I suppose it works a lot like consulting. On the low-end, you have people that, frankly, have no idea what they’re doing and simply throw a number at you without REALLY considering your needs. This person often “knows somebody” that used to work in web or “built themselves a website back in college.” There are many tools for people to learn web design and development online and there are plenty of capable people out there, but those are the people that are going to charge a lower rate.
On the high-end, you have ad agencies creating digital divisions and agencies that charge simply because they think they can. Traditional ad agencies are beginning to realize that they can no longer rely solely on traditional media. I read an article in Ad Age recently where they say that people are dropping the term “digital marketing” and saying just “marketing.” Digital is no longer a “nice-to-have” in your marketing mix. It’s a requirement. Large-scale, prestigious ad agencies now have a digital division and charge an arm and a leg for a website. Some agencies charge more simply because of their client base (“we’ve worked with companies like Cosmopolitan and can charge this much”). That’s a poor example, but you get the idea.
I had a call recently with a prospect who received a quote for 2 websites and the final cost was $X00,000. After learning more about the requirements of those websites, I told her I was quite shocked. We are not the least expensive web company out there, but to charge $X0,000 for one website that doesn’t require any fancy functionality was just mind-blowing to me. She thought, too, that the price was too high and that this company is simply taking advantage because they’re in a newly lucrative industry and reached out to us for another quote.
And then you have 24 Design Company. I consider us a medium to high-end firm and we establish our pricing based on the amount of work we think it will take. That’s it. We need to ensure that we account for our own overhead, make sure our team is taken care of, etc., but the final cost is the amount of time we think it will take multiplied by our hourly rate. We aim to be as transparent as possible to ensure there are no surprises along the way.
To summarize this, the bottom line is that much like in any other professional service area, web design and development is an industry where you get what you pay for.