Why are our web site costs what they are?

I understand that pricing is positioning. I also understand that marketing is what you do in order to ensure that you have the ability to choose only the best prospects to work for. That being said, it still pains me when I come across a client who has a real need for our services and respects our expertise but just can’t afford us.

What is interesting, though, is what I’ve learned about the public’s perception of our pricing. Yesterday, a potential client who fit the mold described above told me that he knew we were going to charge a premium based solely on the excellent content on our site. He visited our site, did quite a bit of reading up on our newsletters and blogs, watched a video or two, and was convinced that we were the people with whom he should speak about his web project. He was also convinced that our web site cost would be comparatively high simply because we knew a lot. This was quite surprising to me, but I realize that I make that same assumption about brands all the time.

The reality of the situation is actually quite different from what this man thought. It is true that our prices have gone up quite a bit over the years. From the outsider’s perspective, it would seem that we just jacked up our prices as we became more well known as a web development firm. While those two things are true independently, they aren’t directly related.

What happened was this: as our experience grew, we realized that to consistently build and support great websites required quite a bit more time and more people than we had originally guessed.

As recently as five years ago, we were a six person firm and would charge about 10k for a web development project. Today we are 18 people and charge 35k for a similar sort of project (One major caveat I have on this point is that what people consider a
“standard” website has changed dramatically over the past five years). We didn’t choose to triple our size because we had twelve friends who needed jobs. We needed to be this size in order to execute new projects perfectly, while simultaneously supporting all the sites we have already built. These additions increased our web site cost, but it also greatly increased our service, punctuality, quality and consistency.

It used to be that we had one or two people handling the entire project from the sale to the prototyping, project management, programming, possible design, training, testing, and support. Today, we have seven different people who have various roles within any given project. We have more people uniquely involved in every single project today than we had in the entire company five years ago. Again, this isn’t because we were eager to bloat our staff and our web site cost. This is a direct reaction to our increased understanding of what it takes to build a website perfectly time and time again. Getting a job done right once is easy. Getting almost every job done right the first time takes a whole lot more. I won’t go into what all that entails here since we already have plenty pf articles on these topics, which I have linked to below.

So, yes, our prices are high (although they are still a lot lower than a lot of other firms out there), but they are high because that is what it takes us to get the job done right the first time. Fortunately, companies recognize the value in that, and, even in this economy, are keeping us very busy building great sites every day.

Related articles on Newfangled.com:
The Cost of Good Service
Website Development Pricing
How Much (work) is a Website? A lot!
Announcing Newfangled’s Project Anatomy