What’s In A Price: The Guidelines For Pricing Web Designs
By Thursday Bram Pricing a website design can seem impossible. A good website design can cost anywhere between thousands of dollars and under fifty dollars, depending on the type of site, how you build it and a hundred other numbers. Those numbers can make it difficult to decide where the right price point for your own work is: how do you know what your work is worth when other designers' prices are all over the place? All prices are not created equal: while it may seem to the lay person that all websites are similar, differences like the framework the site is built upon and the process the website designer uses can require drastically different prices. A website design that doesn't require you to do much more than design a new theme for WordPress probably shouldn't be priced the same way that an e-commerce site that expects to see plenty of traffic should be. It comes down to the question of what's in your price. In this article, we'll look at how four web designers set their prices — and how you can learn from their experiences. Source
The Basics of PricingAt the most basic, your prices must cover your expenses with hopefully a little extra left over, unless you have another source of income. The standard advice for determining your prices is to calculate what you need to live for a month — and then break that down to what you need to earn per hour. There are some nuances: it's rare for a web designer to have 40 hours of paying work every week. It's not impossible for a freelancer to have only 20 billable hours a week, especially when he's just starting out. The rest of the week may be spent marketing to new clients, handling paperwork and other necessary tasks. There's also the danger of underestimating your expenses when you decide on your rates. It's easy to miss one or two expenses, like health insurance, and wind up with prices that just won't work. It's important to build in a buffer when estimating the money that you need to bring in: your income needs to be able to cover savings, emergencies and even price hikes on your standard expenses. These factors mean that the price range you find by estimating what you need to cover your expenses should actually be the bottom end of where you set your prices. Your own expenses are only a small part of what goes into the price you charge for a website design.
1. Deciding Between Per Project and Per HourOne of the biggest decisions you have to make as a web designer is whether you'll charge per hour or per project. Most website designers think in terms of how many hours a project will take them to complete, which translates easily to charging by the hour. There are some other benefits, as well: an hourly rate makes it easy to revise an estimate if a client suddenly changes a project or needs an extra round of revisions.
Should I Charge Per Hour?
"We only quote per hour. Very very occasionally we will get a ballpark complete project cost, but rarely... We find that project bids very rarely end up in our favor. It’s too difficult to adjust for design dilemmas or changes in direction or lack of organization from a client. We make up for not giving whole project bids by only charging updates with a base rate of a quarter of an hour."The type of client Main usually works with is a big factor in her decision to work on an hourly basis. She prefers clients that need a web designer for the long haul — they need the web designer to handle updates, maintenance and any adjustments the site needs. Because Main charges an hourly rate, she can comfortably handle those updates, while still making enough money to cover her needs. Charging per hour makes sense if: Project requirements may change after you've already started working, It's hard to tell exactly how long a project will take, You're handling lots of small tasks or projects as they come up, Your client wants something beyond what you ordinarily offer.
Should I Charge Per Project?
"While we have a per hour rate, we prefer to quote per project rather than per hour. After 8 years of doing this, we're quite good at knowing, approximately, how long a project is going to take us, so giving a client a 'flat fee' lets them feel more comfortable with the process."Pricing per project has had other benefits for Green, as well. He's found that clients are less likely to add on to the original project if they know that they'll have to pay an hourly rate for any changes. Charging per project makes sense if: You do this type of project often enough that you know how long it should take, Your client has a budget that doesn't allow for an open-ended number of hours, You want to offer a package deal, such as a website and hosting for a certain price, The project is relatively short and specific.
Price Per Project And Per HourThere is one other option, which Dixie Vogel, a web designer with more than 10 years of experience, uses. You can use per hour pricing in some situations and per project in others:
"For larger projects, I price by project (after figuring out a time estimate to multiply against my base rate). I dislike time tracking and the feeling of rushing through work to keep my clients from being overcharged. I'm also frequently interrupted, which made tracking difficult. For small, limited scope projects, I do bill hourly as I tend to underestimate the time on simpler tasks and ended up undercharging. Either way, however, I give my clients a range at the outset and stick very close to that."
How Low Should I Go?It can be tempting to price yourself below your competition, especially if you can bring in enough income to cover your expenses even at those lower prices. It seems like a lower price would get you more work and more clients. But it's a temptation you should avoid: not all clients assume that a low price means that a particular web designer is offering a deal. Instead, many prospective clients will think that there is a reason your prices are below other web designers with similar portfolios and skills. Maybe there's something wrong with your work or maybe you're a particularly slow worker — a low price could be more easily explained by a problem than by a web designer trying to set a price lower than his or her competition.
Charging For All The Time You SpendThere's a more subtle version of this problem that can appear depending on just what you charge for. Many new web designers charge only for the time the spend actually creating and implementing a website. When Main first started designing websites, about nine years ago, she fell into this trap. Now, her prices cover a lot more: We used to have entire email exchanges and design processes that went uncharged, we now log all of that time and charge for it accordingly. Beyond the actual time you spend on designing a website, you can and should bill your clients for the following: Revisions: It's rare for a client to like a design exactly the way you come up with it, but you can bill them for the time you spend revising your designs. Education: With some clients, you can spend hours going back and forth, educating them on what a website design actually includes. That is time you've spent on your project and it's time you can bill to your client. Set up: Some designers take care of setting up hosting, if not providing it entirely. The time it takes to get everything ready on the hosting end of things is an expense your client can cover.
Explaining Your PricesThere may be a client or two who questions your prices. It seems to happen more with clients that aren't familiar with the work necessary to create a website, but it can happen with a wide variety of client types. As long as you can explain your prices — and you remain firm on them — clients are typically willing to work with you. Green has had clients try bargain and barter with him on his rates:
We didn't budge, so they chose someone else...the client who left because we wouldn't go down in price ended up coming back to us after the company they DID go with didn't deliver what they'd promised.When a prospective client wants to argue prices with you, it can be hard to stand firm, if only because you want the project even if it means dropping your rates a little. But there are a lot of reasons that a web designer can ask for high prices and get them: You can complete a project significantly faster than an amateur. It's cheaper to pay your hourly rate and get a good design quickly than to let a non-designer drag out the process for weeks or even months. You do more than just design — you manage the project as a whole, from creating a design to coordinating content. You're a professional. Your clients wouldn't ask a vendor to drop their prices. It can be hard for a new web designer to price a project high enough, simply because of a lack of confidence. As you build your skills and gain confidence, it becomes easier to quote higher prices to clients without worrying that the price is too high. Stephanie Hobbs, a web designer based in South Carolina, has increased her prices along with her confidence:
When I started in 2003, my first paying website was $450 for 5 pages. Once I figured out a reasonable time estimate, I offered a four page site for $600. As my skill level has increased and I've raised my hourly rate, that number has gone to $800, $1000, and now $1200. My hourly rate started at $40 (I think, it might have been $50) and is now at $75. But I've raised my rates because I was very low to begin with because I didn't have confidence in myself.
When Should I Increase My Prices?What you charge today isn't necessarily what you should be charging for it a year from now. As you add to your skills, as well as your reputation, you'll not only be more valuable to your clients but you'll be able to demonstrate your worth with a larger portfolio of completed projects. You'll be able to increase your prices — and you should. Vogel started freelancing at $25 per hour. She actually considers clients not complaining about prices a bad sign: "If no potential client complains, you're not charging enough." As she raised her prices, Vogel would start quoting new projects at her higher rates, as well as informing her existing clients. For any rate increases, I've always sent out notices to my clients explaining what I was doing beforehand and giving them all plenty of opportunity to opt out. I've never lost a single client raising my rates.
Timing A Price IncreaseTiming when you're going to announce your rate increase can be tricky, especially when you have existing clients or you've already offered an estimate for a new project. New clients are much easier to deal with: it's just a matter of quoting your new rate as you talk about new projects. With existing clients, however, you may find that they've gotten used to your old rates and aren't prepared to budget more for your services. There are a couple of times that it can be easier to announce those new rates: The New Year: With the end of the year approaching, you can simply send out a notice that your rates will be going up on the first of the year. The same approaches works with the beginning of a new month if you aren't prepared to wait until the end of the year. New Projects: If your client brings you a new project, it can be an ideal time to make the switchover. You can explain that for future projects, you've increased your rates, which provides you and your client a chance to talk about the matter. Contracts: If you have a contract with your client to provide certain services, like maintenance, on a continuing basis, that contract should have an ending date. That date gives you an opportunity to renegotiate your rates. Increasing your prices may not always be just a matter of making more money. If you want to be able to offer a discount on your work, as Hobbs does, having higher rates is necessary:
I do offer a 20% discount for people in my networking group, and a 30% discount to nonprofits (which is part of why I raised my rates from $1000... I'm actually making closer to what I intended to make, since many of my clients are from my networking organization).