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Need help avoiding price wars with Web Design...

Discussion in 'Marketing mastery' started by Daniel82, Mar 21, 2011.

  1. Daniel82

    Daniel82 Member

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    Hi guys,

    A bit of background info - I am graphic designer and web designer, based in Perth.

    Ok, here's my problem. I am finding that a lot of people do not value web design services correctly. I am being asked to "price match" other quotes from web designers, not taking into consideration the quality of the work and the time spent achieving a final product that actually works well for the client.

    I just had a potential client ask me to half my quote, because they came across someone doing "the same thing" for half price. The problem is, it's NOT the same thing. Websites are not laptop computers - you can't just compare the specs and find the cheapest retailer. Experience, marketing knowledge, attention to detail etc seems to be worth absolutely nothing in today's market.

    I am after some advice from anyone out there who has dealt with similar problems in their industry. How do I explain to people that you well and truly get what you pay for? How do I sell the value of a website that (in my experience) I am 100% convinced will work well for their business? Any ideas? Why is it only larger corporations who seem to value high quality work? Why aren't new or small businesses willing to INVEST in a website that will put them in a better position, rather than settle for a DIY website or getting someone's cousin to throw one together in 2 hours?

    That's my daily rant. Seriously though - if anyone out there has any tips that will allow me to communicate and sell quality instead of engaging in a price war, let me know. Thanks.
  2. OneArmedGraphics

    OneArmedGraphics Active Member

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    Hey Daniel, I think most will say that if a short & sweet "you get what you pay for" doesn't work then, they're probably not worth the trouble.
    Daniel82 likes this.
  3. Daniel82

    Daniel82 Member

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    I agree.. thanks.

    I just don't understand how business owners can be so reluctant to invest in their own business - when all the evidence says it's a good idea to have a decent website. Next time somebody asks me to price match I will take it as a warning sign.

    I had the same issues when I was doing more logo designs, if price is the first thing they mention, you can almost guarantee by the end of the job you'll regret taking it on. For example, they might love their logo concepts, but because Fred Smith offers 100 concepts for $99, they will ask me to do the same - even though I spent 10x the amount of time on their job already.
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  4. Past-Member

    Past-Member Renowned Member

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    Hi Daniel - I feel your pain. Unfortunately we are all up against the same thing, myself included. You can spend hours on a quote - then they go elsewhere based on price and you have nothing and no income to show for the time you have spent. It's a challenge to so many of us.
    Andy Cohn and Daniel82 like this.
  5. SuzsSpace

    SuzsSpace Active Member

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    I wonder how much of this is because we don't understand what you do and how much work you put into it. I certainly have no idea how many hours you'd put into designing a new logo, I'm starting to understand about a website but it's taken me a long time to get there.
  6. Daniel82

    Daniel82 Member

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    Yep there's definitely some of that involved. Educating the clients is absolutely necessary. I am more talking about those who run around getting quotes and have no interest in anything aside from the list of features offered by each company. If it were my website, and my business, I would be more concerned with the qualifications, experience and portfolio of each company rather than just "cheapest quote wins". Recently i had someone go one step further and create a fictitious quote from another company, then try to get me to beat the price. They were happy with my portfolio and the service I was proposing, but wanted to get me to do it much cheaper (not realising that time is money?). That sort of thing is quite disheartening.

    I would give anything to have clients who are willing to be educated. The way I see it is they bring the knowledge of their company and industry, I bring the design, marketing and technical skills. I need them as much as they need me, so it doesn't matter if they aren't up to date in the latest web design trends, as long as they are willing to let me make suggestions and ultimately do my job.
  7. AgentMail

    AgentMail Renowned Member

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    Hi Daniel,

    Let me as you a question - If you asked me to print some business cards for you on 400gsm board, and I was going to charge you $155 per 1,000, but the guy down the road was going to offer 'the same' at $125 - you would have to consider it wouldn't you :)

    Now what about if the guy down the road was offering those business cards at $125, but you came to me and I said - How about I do you a new business package, which includes 1,000 business cards, 500 letterheads, some free flyers, promotional pens and some other fuzzy stuff, and you can have all that for $400, plus I'll give you a $100 off voucher for a web or logo package from such and such a design company?

    The value proposition of this package means I can keep my price of $155, and upsell to some other goodies, and I can refer a client to you, and all it'll cost you if they go ahead is $100.

    This isn't me trying to pitch to you, but think about the value proposition. Think about the total chain of events that is happening when someone requires a website - what value can you add that your competitors can't or wont.

    Just some food for thought
  8. PerfectNotes-Kathy

    PerfectNotes-Kathy Active Member

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    Hi Daniel,

    All of us in a service business face the same issue sooner or later... And yes, the answers are pretty much as above - if they are only interested in the money, that is going to be their focus - for the entire process - so they are probably not clients that you want... And the way to change the clients that approach you is the education process - ensure that your website includes all information on the background and experience that you bring to the process - have testimonials from clients that show how you went the extra mile for them to turn out a quality design, not just a quick and dirty 'one size fits all' website... and wait for the right clients to find you! Also, ensure that any marketing you're doing includes that info too.

    Good luck!

    Kathy
    Daniel82 likes this.
  9. nominal

    nominal Active Member

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    You're confusing me :)

    It will be very hard to convince someone that your 'value' is better than someone else's based on a quick quote and no real evidence.

    I understand a website design is not a commodity and sure hell can see BIG differences in quality, but a prospect has not much to go on when they want to compare so they will use the feature list as a basis for comparison - makes sense.

    I can tell you from my experience as the customer that the first impression on a web designer own website has the greatest impact, if you can portray excellence, coolnesses, professionalism in a way that will outweigh the price difference - you're going to win the deal otherwise the tightly budgeted small business owner will go for the cheaper option (especially if that's their first website)
    Daniel82 likes this.
  10. Daniel82

    Daniel82 Member

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    Thanks Kathy. Good to hear I am not alone with this issue.

    One thing I have noticed is that if you don't meet the clients in person (if you work remotely) they tend to treat you like a machine, and have very limited patience. I am now trying to establish myself more locally, having meetings in person to discuss their website. So much easier and a good relationship is establish, along with a lot more trust by both parties.

    It is pretty common for web designers to never meet their clients in person, but it certainly makes the whole thing more difficult in some respects.
    Canex Graphic Designs likes this.
  11. Craig_Longmuir

    Craig_Longmuir Active Member

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    i wouldnt bother with haggling over price. as everyone has said they are likely to be the sort of clients wo turn out to be more trouble than they are worth.

    potentially offer a discount if you really like the project and see it as something valuable to your portfolio
    Daniel82 likes this.
  12. Stuart B

    Stuart B Well-Known Member

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    It's all about educating them. They need to have a clear understanding of why the cheapies are not going to be valuable for them, and why it's a mistake to go down that road.

    Talk about return on investment, proven examples, strategies that will actaully benefit their business etc.

    At the end of the day if you do all those things and they're still focused on price then you don't want to work for them anyway.

    There are plenty of SMB's that do recognise the value of quality before price, but obviously they're not as common so they're harder to find.

    Don't lose heart, just focus on the type of people you want to work with, and if they don't fit that category just give them the boot and move on to the next one.
    bridiej and Daniel82 like this.
  13. JaneB

    JaneB Active Member

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    It's a bit worrying to read that if a potential client talks about price then they aren't worth taking on as a client.

    We all have budgets - and a website it just one part of a whole business package.

    We would all love to have the absolute maserati of a website with the most sophisticated logo, but have to make the website pay for itself within the context of our micro-businesses.

    If we've allocated a certain $$ amount for a website, a certain amount for tools and equipment, a certain amount for legal advice, a certain amount for accounting etc etc - by the time the list goes on the amount that each category is limited. It's not just a matter of priorities - it's a matter of each category having enough to make the business viable as a whole.

    I'd be very worried if the website designer I chose to contact dismissed me as soon as I ask about price.

    Perhaps the solution would be to give some kind of indication of price and what you get for that on the website. Website designers often talk of educating the public, and heaven knows that ignoramuses like me need to be educated, but the public would also like to be educated on the expenses involved.

    Some time ago I bookmarked a web designer's site which came up on Flying Solo - and the reason was not because s/he was a whizz bang designer (although their own website was great so I did make that assumption) but because on the site itself was a price guide and I knew that I didn't have to be embarrassed to contact the designer. I knew in advance that their fees were in my budget.

    Cheers
    Jane
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  14. Daniel82

    Daniel82 Member

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    Yep - absolutely nothing wrong with discussing pricing and budgets. Everyone has a budget to work with - but what I don't appreciate is basing that budget on the cheapest price that can be found on the net, and questioning anything higher than that - as though the el cheapo websites are the new standard.

    Sorry for making it seem like I hate it when people ask about price, that's not an issue at all :) I have considered having price guides on my website, but it's difficult because every site is different (the price guide would be 20 pages long if it had to include every possibility). Hard to give an indication without seeing the requirements.
  15. Stuart B

    Stuart B Well-Known Member

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    No i don't think anybody is trying to say that a client who asks about price is not worth taking on. Just the clients who clearly are only interested in getting the absolute lowest price possible regardless of the impact that will have on the project.

    There's nothing wrong with people wanting to get a good deal, but it's a good move to avoid clients who are only interested in comparing the lowest possible price, and not comparing anything else.

    Somebody on this forum a while ago said something about there always being people with Champagne tastes, and beer budgets. Those are the ones to avoid and never feel guilty about it, they want everything, and don't want to pay for it.
    bridiej likes this.
  16. Gordon Akman

    Gordon Akman Member

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    Firstly, you are in probably one of the most competitive industries in the world so that's always going to be tough. Here is my advice:

    1. Be clear about what services you want to provide and at what price point.
    2. Don't try and 'educate' prospects. It won't work and all it will do is waste your time and annoy you.
    3. Communicate your message as clearly and succinctly as possible on your website.
    4. Constantly analyse the market and market segment you are targeting. Constantly review your offering and strategies to ensure you are either 'best in class' or at least close to being so.

    If your business model is a winner and you are good at your job (maybe read some top rated Sales books to read about what elite Sales people have to say) you will find a way to be successful.

    A couple of examples of companies operating in the same industry but selling at very different price points:

    1. Hyundai is a very successful company and so is Mercedes Benz.
    2. In Myer and David Jones you can buy shirts for $20 and $200. There are very successful companies selling at both price points.
    3. My solicitor charges $300 an hour. Some legal councils (like QCs) charge $5000 a day.
    4. Some computer systems engineers are on $60k a year and some are on $200k a year.

    and on and on it goes.
  17. Astrid

    Astrid Active Member

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    Daniel, you are absolutely not the only one dealing with these kind of problems. You've already got some good tips here, especially from Gordon and LemonChip.

    'Education' or better 'constant information' is a necessary thing, be it through a blog, a newsletter or articles.
    Not all prospective clients know about how much work goes into a job like a website or a professional logo design. I have seen people being really surprised when you tell them that you want to sit down (or skype) for an hour or so to talk about their business and their objectives before you start working on the logo.

    I presume that if someone is that interested and contacts you, then you realise that the budget is small but the client is keen to get a good result and is willing to cooperate, you will be happy to offer him or her a good deal.
    In designing their website you're not just a technician or an artist who puts things together - you're often an extension to their marketing department.

    After a while you can pretty much tell who is just shopping around or trying to get your prices down (never heard about that thing with the faked quote, what a waste of time from their side!) or who is really interested in getting the best for his or her business.

    I just expect from my clients that they take their business as serious as they expect their suppliers to take theirs. If they don't, then they aren't the right clients. Then they can go and buy off the shelf. Because I want my clients to take my services serious as well.

    The others will recommend you. It might take a while before you get the ball rolling, but it's worth it.

    And I know that there is still a need here for professional (non-intimidating) webdesigner.


    Cheers to Perth :)
    Astrid
  18. Gordon Akman

    Gordon Akman Member

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    Astrid makes some very good points here. An important Sales skill is 'getting control of your customer'. That is in no way a negative or disrespectful thing to do. One way to do this is by being a pleasant likable person and good at your job (like Astrid seems to be from what I have heard said about her). When you are like this the 'prospect' will pick up on this and be open to doing a deal. By slowing your prospect down a bit and using some well developed Sales techniques you will be able to close more profitable deals. The problem with this approach is it is obviously more time consuming so it won't suit all business i.e. more suited to larger business deals.

    From what I understand of your business you need to use a combination of techniques to get the best results. First of all, many of your prospects are going to search several companies online who provide similar services to your own. That is why having a really compelling website designed to quickly provide all relevant information and compelling reasons to buy from you will be very important. Things like a free call number, easy contact options etc help. Then when a prospect contacts you use your Sales skills to 'qualify' them and put an appropriate amount of time and effort into doing a deal with them. As you get better at this you will develop very valuable skills that will enable you to quickly close the higher quality prospects and not waste time with the lower quality ones (people asking you to perform your services for half the price you quoted I would suggest fall into this latter category).

    As Astrid also mentioned, repeat business and referrals is a great reward for better performing businesses in the marketplace.
  19. Craig_Longmuir

    Craig_Longmuir Active Member

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    It is certainly a case of 'you get what you pay for' as with anything, but as mentioned by a few others many people may not know why one website should be more expensive than another 'cheap' one.

    I currently don't have a "the process" page/section on my portfolio site, but thinking it might be a good piece of info to give a brief overview of whats really involved with creating a website. I assume whilst being generally informative for a potential client it may also give some indication as to the level of work that will go into the site and a better understanding of why a site might cost what it does.
  20. JohnSheppard

    JohnSheppard Active Member

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    Have you ever tried teaching an 8 year old how fibonacci numbers work? Why not?

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