Art=Work

Creative meanderings from Nathan C. Ford.

Pricing Prestidigitation

Prada, Marfa, TX. Sculpture by Michael Elmgreen and Ingar Dragse. Photo by John Hicks.

“Money demands that you sell, not your weakness to men’s stupidity, but your talent to their reason.”— Ayn Rand

How much should a website cost? Any given web professional can produce an array of pricing models based on the complexity of a project. The amount of time estimated, multiplied by the hourly rates of those involved would probably be the most common approach, and for good reason. Costs should be a trade on efforts, and thus an hourly rate, based upon the quantifiable measurement of the professional’s abilities is the most rational approach.

Basic economics dictate this outcome: in a free market, clients will pay what they believe the efforts to be worth. Those web professionals that overestimate the value of their efforts should eventually be forced to adjust their prices according to the demand of their services. Unfortunately, in the case of web projects, clients can be ignorant to the elements of a quality web product, and what “should” be charged has been callously misrepresented by agencies and designers. It is these various slight-of-hand tactics that make an honest assessment of rates difficult for honest businesses, and invariably devalues the worth of our profession as a whole.

The Paths of Looting

The professional web design community is unfortunately no stranger to looting, and while clients are increasingly aware of how the web can help them, they can still be hazy on the best ways to implement such solutions. This fog of understanding can lead an uninformed, yet otherwise intelligent client down multiple paths to an all out route of their hard-fought budgets.

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Some projects can grow like a sponge to absorb every last dime, constantly testing the boundaries of the client’s budget, and expanding in any direction where there is give. Ultimately, the client is left with a solution that delivers well beyond their needs (careful: this is not a benefit), with a set of features that they will never use, for a price tag that will take years of careful planning to recoup. Another project can have a very attractive price tag, but ultimately delivers a solution that falls short of the client’s need, causing a second (or possibly third, etc.) investment of time and money to start the whole process over again.

An even worse possibility encompasses the most contemptible of the other two, eating years’ worth of budgets, dragging along extraneous time lines, and finally birthing an retardation of the original intent. The destination of any of these damnable routes is a product that is inappropriate, yet must be accepted until the budgets can be replenished for another try.

Check Your Premises

Undervaluing and overvaluing both destroy the true value of creative efforts, prolonging the struggle for honest web professionals to be able to ask a fair rate. Low-cost opportunists have clients believing that simple solutions come with proportionately tiny price tags, while the large interactive agencies have clients believing that true quality and return on investment can only be made through a hefty price tag, and a fully-staffed “team” of professional go-betweens. The result is a bewildered group of businesses in need of a web product, but with absolutely no idea where their project fits within these absolutes.

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Clients can protect themselves through diligent research, and having a firm grasp of what it is that their web project should entail. What kind of client/server-side technologies are appropriate? What kind of return have others seen on similar projects? They should realize through this process that their particular project does not need to fit in to one of the two aforementioned pricing structures. Also, any honest agency or designer should clear away this confusion upfront, by fully explaining their rates and offering an itemized, detailed estimate of their creative efforts at the beginning of a project. This should ensure a fair appraisal of creative efforts that meets the needs of both the client and creative professionals.

This post should not be confused for some rant in favor of regulation: I firmly believe in capitalism, and in asking for the highest reasonable price for any product. A price that is based on anything other than an honest appraisal of efforts, though, and extorted from the uninformed by means of shady, smoke-and-mirrors tactics, should not be misconstrued as mere capitalistic gains. By all definitions, that’s thievery.

Written Contributions Appreciated

Comments

Unit Interactive :: Blog :: Is the Pricing Right? — Friday, October 3, 2008 7:00 am

[...] week our own Nathan Ford published a cutting essay on website design pricing approach, and how some agencies’ pricing amounts to little more than looting. Among other things, Nathan [...]

Jeff — Tuesday, October 7, 2008 1:27 am

And what do you suggest would be a fair rate? And please don’t say something as stupid as, “Whatever you would need to comfortably complete the project blah blah blah etc.”

I’ve had clients come to us and say such ridiculous bullshit such as, “You should never pay more than $10 and hour for web design and development!” Yet they seem to want to make millions of dollars a week with their website.

I swear to fucking god, this is the only mother fucking industry where the people in it are constantly trying to devalue themselves and offer more and more ways to cut themselves out of the equation and be paid less and less. “Oh, how can we make things cheaper for our beloved customer? How will they make millions off the sweat of our brows? We web designers are not worthy to even receive so much as a chance to save for retirement!”

Fucking dipshits! You’ll never hear people in the auto industry saying shit like this! Or any other industry for that matter. Fucking pathetic artists! Go live in the gutter and starve!

I agree undervaluing is a problem, but some of the sites I have worked on have earned their owners over seven figures a month. Clearly there is value in that!

Again, you will never hear lawyers, surgeons or ANYONE FROM ANY OTHER PROFESSION besides this one say something this stupid.

Hey, Nathan, whatever you’re earning, it’s too much! Time to cut your costs. That is what will be the final outcome of all of this sort of talk. Go to business school, it may do you some good…

Nathan C. Ford — Tuesday, October 7, 2008 8:49 am

Wow, Jeff… I am not sure that you realized it in the frenzy of your tantrum, but I am actually on your side. In the last paragraph, I specifically state that I believe in “asking for the highest reasonable price for any product”. My point here is to say that those that take clients for all they are worth, and those that dangerously undercut our fair rates, both do their part to destroy any chance of honest web designers to ask a fair rate. And to answer your first question, I believe a fair rate is whatever you feel you can ask, based on your skill and level of experience. If you ask too much, a free market should force you to adjust your rates, although in a burgeoning and oft misunderstood industry like ours, certain looters can take advantage of another’s ignorance to make money not off their own efforts, which is fair, but from people’s lack of education. I may not have a business degree, but I can see how that is damaging to all of our profits.

Jeff — Tuesday, October 7, 2008 10:28 am

Nathan,

Sorry about my tantrum, but it seems that all I’m hearing from those in the web crowd now-a-days are things like, “Wow, these prices are way too high. How can we convince clients to pay us less?”

Yes, I know you agree with me about the undervaluing, but my frustration stems from the fact that you will NEVER in a million years hear a plastic surgeon say something like, “Wow! I can’t believe how much some of these surgeons are charging. They are really taking their clients for a ride! Hey everyone, be sure to check around for cheaper prices!! You may be getting taken for a ride!”

Now, I realize that you work for Unit. Unit does some damn good work for some big clients. Not everyone in this field is so lucky. There are medium sized companies with 6-figure budgets for web design and many of them are saying that they would never spend more than $1000 on design. When asked why, they sometimes send me a link to articles such as these, written by professionals such as yourself. You may be familiar with an article by Chris Pearson (sp?) that contains many comments on how design should not be priced too high, in some cases not over $1000. That is how many clients will interpret this article. The though is not WHAT PRICE is too much for a particular job, because you don’t actually list any real world examples of price gouging, but that THE PRICE is too high and needs to be lowered.

There should be more articles about how design is NOT art, how design increases ROI and how design creates value. Sadly, most of these types of articles are too abstract for most clients to grasp.

Oh and by the way, I’m NOT a designer. I’m a programmer who earns over $200 per hour, and works with designers who earn about $15 and hour. I’m just fed up with designers being made to look like little more than monkeys with pencils, when I see everyday what good design can bring in terms of ROI.

I guess that more than anything, it’s the undervaluing that drives me crazy. Clients who read articles such as these are more willing to shop around for lower priced work, no matter how shoddy, simply because they think that design is something that can be skimped on, like the broccoli tray at a redneck wedding reception.

Speak more about value and ROI, and in an understandable, concrete way, and we wouldn’t see crap like 99designs popping up everywhere.

Sorry about my temper tantrum, but like I said, I’m not hearing anything like this from professionals in other fields.

There is a reason for the phrase “Starving Artist”. You never hear about a starving Wall Street Executive.

Nathan C. Ford — Tuesday, October 7, 2008 11:13 am

Starving Wall Street Executives… hmmm, you may hear about more of those soon.

Admittedly, this article was aimed only at other web professionals, as a bit of a tantrum of my own. I feel that as long as there are gougers out there that will deliver a shoddy site for six figures, it’s gonna be tough for us designers that do strive to bring value [read ROI, not artsy emotional explorations on the client’s dime] to our work. When a client invests a ton of money in to a site that winds up looking straight out of ’98, there will be always be a reactionary devaluing of design.

It would be unfortunate if someone were to try to utilize this article as rationalization for cheaper design. If anything, I want to justify the worth of well-considered design. I am actually working on more articles that should further explain my position on the value of design. Please check back in when you can, as I would like to see what you think.

Jeff — Tuesday, October 7, 2008 12:10 pm

Excellent! I will be awaiting those articles!

“It would be unfortunate if someone were to try to utilize this article as rationalization for cheaper design”

Yes, well some clients will use ANYTHING as a justification for cheaper pricing.

As for those Wall Street Execs, they will always find a way to push the cost on to someone else. That’s just how it goes…

Osku — Tuesday, October 14, 2008 9:27 am

I kind of agree with both of you here. Pricing our work is difficult, at least it is for me, and I feel some clients just don’t want to pay (a reasonable price) or don’t appreciate the effort.

Anyway, I agree with Jeff in that these too-vague-and-abstract articles don’t really help the situation. So how should we price ourselves? How should a client know if the price is just?

I go about underpricing myself just a bit (I think so at least..), increasing the price tag as I get confidence and exprerience. But then again I don’t really know what other freelancers around here charge for the service.. I guess it depends a lot on the type of project at hand also.

Oh well.. also I will be checking back here for the future articles.

Nathan C. Ford — Tuesday, October 14, 2008 11:24 am

Hey Oska, thanks for contributing!

If you are interested, here are a couple of resources that get a bit more granular as to pricing:

Graphic Artists Guild Handbook: Pricing & Ethical Guidelines — This resource is always a good rough estimate of where to start gauging your hourly rates. Just adjust according to how exceptional you know your work to be.

Calculating Hours – the Client Factors — This article by Andy Rutledge is also very useful at how to appropriate your hours.

Hope this helps!

jeremy — Wednesday, October 15, 2008 12:09 am

I like to itemize the functions and design costs up front and allow the client to choose either an hourly rate or a project rate with a time cap. That way the client can choose what functionality they need from a list as well as how much they are willing to pay.

The benefit of this is that everyone has a checklist containing the services expected along with a clear understanding of what leeway the client has with design changes.

As long as the scope is defined, you are getting paid what you feel you are worth and the client (after being informed to the best of your ability) understands what they are getting, things work out.

I even undercharge at times to garner repeat work (which makes much more money than a one-time price gouging) and gain referrals.

I find that the best way to “prove” your worth is to show before and after screen shots. That way the potential client can see what your impact was on a previous company and drives the point home that you are well worth the money to get it right the first time and walk away with a professional, scalable, cross-browser ans SEO friendly website.

Web Design Rates — Wednesday, February 11, 2009 12:03 pm

Setting the prices is a usual question for my company. That’s why we prefer to have an individual approach to every client and give a quote according to their requirements.

Nan Patience — Thursday, July 16, 2009 8:20 pm

I know this article was written a while ago, but now I found it, and I have to say that anything web-related is largely undervalued, including design and writing and everything else, despite the fact that it has proven so lucrative for some clients and advertisers. There are those who just don’t understand, or at least pretend not to understand, the value of the internet and creativity, and they probably never will. Among web providers, there has been a race to the bottom for all but the best and brightest. The rest of us are just so damn glad to be working from home in our pajamas that we seem to be willing to get by on bread and water. I for one am fed up and wish we could all get our act together.