When we began redesigning our website this year we were stuck on what to do about a pricing page. Would we be vague and simply say something like "competitive pricing" or something lame like "websites for less" or would be completely transparent and simply list out some prices. We decided to be mostly transparent and create a cost estimation tool for potential clients. We're still unsure if we did the right thing. There are pros and cons to both. Today we want to talk about why we chose to list prices and why our competitors don't.
It sounds expensive
The top reason we were hesitant to list our prices is because they sounded expensive. You simply cannot get a website worth anything for under a thousand dollars. If anyone charges you a better rate than that then they're either total amateurs or severely hurting their ability to feed their family. No matter how you slice it, with sub-thousand dollar prices somebody always loses and usually it's the client.
But how do you confidently say "yes, we charge at least $1,000 for a custom site and it only goes up from there" without the fear of people looking at you like you're nuts for selling them something that they believe takes a few clicks of a mouse to create? The answer is that you simply don't want the clients who are coming to you based solely on price alone. At Clever we actually do have an option for those clients whose top concern is cost but it took us a very long time to perfect a system that gave clients sub $500 prices without driving us out of business. Furthermore, that's really not our main focus.
We cater to clients who understand the value of a website and appreciate the amount of skill it takes to build one that works for them. It's a tough thing to do when you have rent or the mortgage to pay for at the end of the month but turning down a bad client so you can have time for the good ones will do more for your business than any sort of price competition.
If you're not afraid to lose a few prospects along the way then you'll be in a much better position to run a profitable web design company further down the road.
Clients need to be educated first
The number one reason we find that web design companies do not list their prices is that the clients they're attracting need an education on how the process works before they're ever shown a price.
You know those restaurants where there are no prices on the menu? That's kind of what a lot of web design companies do. By not listing the prices on the menu, the restaurant attracts the type of customer that knows they're going to pay a premium price for food but is okay with it because they know their steak will be one of the best they've ever eaten in their life. A no-prices menu encourages a business' customers to self-select. Rather than having to convince someone they want to eat at Fancy French Restaurant, the consumer already knows that they like food cooked by chefs with a passion for what they do and they're totally willing to pay at least $30 a plate for their meal.
With web design companies, it's rarely the case that a client already understands the value of good programming so we, as an industry, need to educate each prospect and let them know why web design costs what it does, what goes into a website that takes so much work, and why the competition who offer their products pretty much for free are not right for businesses like theirs.
We're competing against free
The final nail in the pricing coffin for web design companies is that we often need to compete against free. GoDaddy and just about every other web host and registrar out there have some sort of do it yourself website builder that they sell for a buck a month or something. So when a prospect sees how much you're charging they think they're being ripped off because hey, what's the difference? Your websites look a whole lot like the templates over at GoDaddy but theirs are cheaper. What gives?
When I speak to these types of clients I will often tell them to try the GoDaddy thing or some free website builder first and then give us a call if they need help later. Most of the time they don't call back but when I do hear back they immediately understand why professional web design costs what it does. And what about those that never call back? I try to follow up with them and what I typically find is that their websites are half complete and the business has abandoned it completely. Not surprising.
You can't compete with free if your clients prioritize price over value (big difference between price paid and value received by the way) but if you market to the right clients then you won't ever have to. One of the biggest pricing and differentiation mistakes new freelancers and web design companies make is trying to compete on price. You’ll never win that race to the bottom. Sooner or later you’ll have to start paying your clients instead of them paying you if you compete against free offerings.
Instead, know who your ideal client is and speak directly to them. Your ideal client is the one who will choose you for your skill and the value you bring to the table, not the one who wants the cheapest site possible. We all want a good deal, but when you sacrifice quality for price sooner or later you’ll end up coming around to the fairly priced solution and ditch free/freemium.
In the end, web design companies choose not to list their prices as a way to qualify their customers. Many people will say “I’ll never buy something without having a price listed”. Well to those people I say, “you’re obviously not the customer then”. The trend among web design companies seems to be not to list their prices. This isn’t the wrong way to do it, just a different way. We’ve gone the route of listing prices because we like to keep it real and be transparent with our clients. We may find that its the wrong way to attract clients but until then it’s an experiment we’re willing to see through to the end.
What do you think? Are you someone who appreciates seeing prices listed on a web design company’s site or do you think it’s a mistake? Are you a fellow developer? What is your opinion? Let us know by shooting us an email.