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  • #1031159
    Chris Bates
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    Erik, real estate and web design are largely different industries. I still think it’s poor to recommend people compete on price. Today it’s about value, not price.

    While you were undercutting by 50% on average, for us to compete on price we’d be undercutting our worth by some 80%. We don’t compete on price, because any backyard Uni student or crowd sourcing can do a website for $300 or less.

    Imagine if there was no regulations/licensing on the real estate industry, and every man and his dog offered to sell your house for $1000 or less. Would you then still compete on price?

    You argue that it’s because you’re cheaper that you’ve carved your niche. I argue that by charging less you’ve created massive value. Two sides of the same coin, either way you’ve done well from it.

    However lowering your prices to create value, as I said, is a very old mindset. One that may work still in some industries, but not all.

    As I mentioned earlier in the thread, Fiona’s tactic here (as I see it) is to bridge a common mentality we find in our type of client. It gives her a chance to start building value with the prospect, rather then just hoping some ‘averaged price point’ appeals to them.

    #1031160
    YoungNomad
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    “It’s poor to recommend people compete on price” – this is a very, very broad sweeping statement, and I completely disagree.

    In the current global financial environment, I think price 100% comes into the equation.

    Which is why I keep saying “charge less, but provide a higher level of service” – it’s an unbeatable formula.

    Obviously, if you’ve got a crummy wordpress website esteeming your skills at building quality websites, you’re in trouble (ie the uni students doing it on the cheap).

    I firmly believe in creating a phenominal brand (which obviously costs $$$), backed by a brilliant website, and then further cemented by a lower price than your competitors.

    How can this be old school? This is the essence of being an entrepreneur – finding a niche, and then hitting it hard. IMO if you price yourself out of the market in your infancy, you’ll never have the opportunity to hit home runs and build a brilliant brand and business.

    The MOST progressive real estate agency in London (Foxtons), would offer completely free service for the first 3 months – it built their brand, showed how good they are, and they were then market leaders.

    This theory applies across most industries. By all means, you can try and prove that you are worth the high fees from the outset, but this takes alot of time, and IMO more risk.

    But then again, each to their own – as you’re so firm behind your opinions, I’ll assume you are highly successful in your chosen field, and have obviously hit some good runs.

    #1031161
    YoungNomad
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    Chris – was just looking through your website. There are some grammatical errors on your About Us section;

    “This interest lead him to complete a degree in Software Engineering, before start his own computer business. “When I start my first business, I discovered my true life’s passion” says Chris, “That is helping other businesses leverage the Internet to grow their business.”

    start should be starting

    start should be started

    So the above should read

    This interest lead him to complete a degree in Software Engineering, before starting his own computer business. “When I started my first business, I discovered my true life’s passion” says Chris, “That is helping other businesses leverage the Internet to grow their business.”

    #1031162
    Samot
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    I generally just build a prototype for my clients before sending in a $$ proposal. The prototype is generally spot on and lets the customer know I’m the man for their job which lets me charge above a competitive rate usually.

    The only problem is you waste time building a prototype. I think only one client this year has declined a prototype from me. Sometimes I build the prototype even before the meetings to show that I have a understanding of their market.

    Erik, website design is not an industry you want to compete on price in.

    In website design we sell different products a crappy 100$ uni student web page is one of them and if you sell that then compete with them.

    As a web designer you pick and choose what products you want to sell

    #1031163
    Chris Bates
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    I agree, it was a broad statement. I hate broad statements, so for that I apologise, haha. But it’s the statement following it that counts; it’s all about value.

    I’m not saying competing on price never works, just not in this industry. But again, by LOWERING your price, you RAISE your value. Even in the GFC, would you spend $10 on a widget that lasted 1 year, or $20 on a widget that lasted 3 years? Value, value, value.

    If you’ve managed to make a widget that you can sell for $10 feasibly that lasts for 3 years as well, even better! I say sell it for $15 and you’ll be laughing ;)

    You are correct about niching, but I still fail to see how ‘being the cheapest’ is ‘hitting it hard’. ‘Offering the best value’ is ‘hitting it hard’.

    A business in its infancy is different, they will often loss lead (like Foxtons) as a way to prove themselves. You see it all the time here. What do they have at the end of it? A way to demonstrate their value.

    As for WordPress, I’m not sure why you discredit it? It’s a market leader in CMS technology, and is widely used by a lot of design firms. Our very own website is built upon WordPress, as are most of our client websites.

    Thanks for the proofread of the website, that page is actually on our agenda to re-write – we’ve just not had any spare time to work on it! You have assumed correctly, since opening our doors two months ago we’ve hit a lot of big runs that has kept us well and truly busy. I’ll let you guess our secret for selling so many solutions ;) haha *hint, it’s a 5 letter word and starts with ‘v’*

    #1031164
    Samot
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    I agree wordpress is a brilliant piece of software and use it any chance i get for clients.

    #1031165
    JohnSheppard
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    The issue with competing on price in web design is that most value is hidden and not easily seen unless you already know what you are doing.

    People can see a crack in the wall of a house where as they can’t see that a particular website won’t support their growth, be cross browser compliant or badly architectured for scale…(unless they know what they are doing)..

    From a customer’s perspective, a $1000 website LOOKS just the same as a $2000 website half the time….

    The issue web developers face is that clients DO make decisions on price….which is a very unfortunate aspect of the industry. Personally, I don’t think that Fiona’s method here is a good way to circumvent it. As for how….my opinion is to leave the low end well alone. It is the way it is.

    #1031166
    FionaFell
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    WOW, this conversations certainly got a few people talking.

    Chris – I do charge what I’m worth (As you can see on the ‘services‘ pages of my site, and they just recently went up a little bit more with the last set of testimonials and portfolio samples that I published)

    Re: $1000 websites looking just like $2000 websites. That may be true to the un-educated buyer, just like a $49 garden blower does the same job as $350 garden blower. (But I often see ‘value’ in durability, fit for purpose and reliability over the years, and I’m sure that are many people who also feel the same way.)

    It a new tactic and I’ll see how it goes.

    #1031167
    FionaFell
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    natJ: I invoice my ‘pay what its worth’ clients 100% upfront to be sure that they are as committed to the project as I am. (It helps speed up the time it takes some ‘slower’ clients to get required content to me – descriptions, product shots, logos)

    I have invoiced in various version 50/50, 40/30/30 in the past but that has mainly been for projects that were to last multiple months and were required to cross multiple budget ‘quarters’ for the client.

    You can see my work throughout my website on the portfolio and testimonial pages to get a feel for how I work and the effort and expertise that is put into each site I create.

    And of course I often chat with clients a few times before we start work to make sure we are both looking in the same direction.

    #1031168
    JohnSheppard
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    FionaFell, post: 37838 wrote:
    Re: $1000 websites looking just like $2000 websites. That may be true to the un-educated buyer, just like a $49 garden blower does the same job as $350 garden blower. (But I often see ‘value’ in durability, fit for purpose and reliability over the years, and I’m sure that are many people who also feel the same way.)

    There are….but they are those who have been burned before by buying the $49 garden blower…or those who have a general different attitude instilled by their parents…or in general just have more sense :)

    My observation with low end web dev market is that this is not the attitude that prevails. They are still making decisions based on price, because they haven’t learned yet. Perhaps I am wrong though.

    Regardless, that is just an adlib/explanation of why competing on price is a foolish thing to do in web design…..ie…dropping your price to match the $49 garden blower means you have to drop your value too.

    #1031169
    Chris Bates
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    You are spot on John!

    I lose a fair number of ‘startup’ prospects to cheaper mobs – a failure on my behalf to educate them well enough. I never worry too much though, because I know they’ll be back for my $350 blower after their $49 fails to even move the leaves !

    You can’t appeal to everyone though. The $49 blower buyers will learn through the pocket. The people who buy the $350 blower straight up are the ones that can appreciate value and quality.

    #1031170
    Jexley
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    Hey Fi (can I call you “Fi”?),
    I’ve had a look over it and find you to be of the Awesome Variety. Well done.

    I’ve been touting for YEARS that this industry needs to help educate clients, build some trust in them and deliver value for the dollar and it’s so awesome to see you doing exactly that, and through your website no less. Seriously, the aforementioned usually has to happen through the cultivation of a relationship, yet you’ve put up a flowchart and are rocking on it.

    I am seriously impressed.

    I’ve been away from the forums for a while so every post now is a freakin’ novel, so I’ll leave it at that, but I’m PMing you some ideas too.

    Rock.

    #1031171
    FionaFell
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    Jex,

    You can call me Fe (my preferred spelling, if we get to specifics)

    Thanks for the vote of confidence. I’ll go check out your PM.

    I love building a long time relationship with clients, but sometimes some people get scared asking for my help because they dont quite need ALL that I offer in the fixed price options.

    All about capturing leads and getting people to talk. Starting conversations leads to growth for my client and myself.

    I’ll ROCK OUT THE FLOWCHART for as long as I can use it to differentiate myself from the rest of the market. (Off to devise a huge marketing campaign to shout it from the roof tops)

    #1031172
    huwebdev
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    Sounds like an interesting idea and I’d be keen to hear the results.

    I find the best way to overcome asking the client what they’ve budgeted is to just give them a few options at different price points and to clearly list the features of each option.
    This straight away determines the client’s budget and the direction they wish to take the project in.

    At the beginning of the project I’ll ask for a 50% deposit and explain to the client that this is to allow me to make myself available and to show their commitment.

    Finally on lowering prices to beat your competitors. I’ve actually just done the opposite and started to charge more but as a result my client’s are receiving a much improved product and great service. Customer service is the key.

    #1031173
    Arnold Shields
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    Hi Fiona,

    Fantastic idea and the flow chart is great way of explaining the process.

    Have you tried split testing it?

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