Offliners, do you really know what the market price is for website dev?

I have my own ways of selling offline and that is why I got so many clients in a few month's I rather have 5 / week then 1 /month since I can sell them a lot of service for example I offer instagram as a new service and I am the only one atm

there's suggestion to give them in bundling price, like $399 or $999... but, unfortunately i don't try it yet for my services in design graphic... what's a pity me?

Surely pricing will depend upon the type of customer (target audience), the project and elements contained within the project.

Wait to see how many reply and actually get the hidden point Michael is trying to make here. hehe

Pricing is really all about POSITIONING. I have done $500 deals before, as well as $5,000 web design projects. I'm working on closing a $10K deal right now, the average time it will take to close the deal and deliver... 200 hours give or take... so that's averaging $40 - $50/hour. Though I don't get to do any more work after closing other than managing the project with a few phone calls and maybe holding a few day long meetings with the guys who actually do the grunt work, I would likely end up with just about $80 - $100 or so per hour on this deal.

Bottom line is I wouldn't be in that position if I didn't position myself for it I would be only able to charge $10/hour with small deals as I have done in the past.

With fresh positioning, that amount has been multiplied by 10, so the answer to getting paid higher is to actually POSITION/PACKAGE yourself/company for the kinds of deals you really want.

How do you do the latter? That's a subject for another post.

Just like my partner says "Making the big bucks is on purpose"

Cheers,

Kunle

There's a BIG difference between the "internet savvy" professional compared to,
the mom and pop's who thought their $40 "amateur hour" web page was sufficient.
Those are the people who think $500 for a website is unreasonable.

Selling mom n pop businesses on any kind of marketing service is a totally different game.

Their marketing budgets come out of their own pockets, not out of a corporate marketing account. That's a big reason a larger corporation can make quick decisions on spending huge amounts of money when a small biz owner might seriously have to seriously think about spending even a couple thousand because it's their own personal money.

Anyone who is out there in the field pitching mom n pop shops knows how difficult it is to get what you want out of them, especially if you don't have much credibility or experience like many marketers on this forum.

I'd venture to guess that nearly all of us who are catering to the mom n pop market don't get paid on anywhere close to what we're worth.

I like the OP and I know he's very good at what he does, but I do think that he's a little disillusioned with what most of the marketers on this subforum are dealing with.

Correct me if I'm wrong but he also says cold calling is dead or on its way out?

For web design, the higher I raise my prices the easier the sales get. Strange but true.

Ugh. It's all about QUALIFYING your prospect.

So there are lots of people who don't want to spend $1000s on web design. Fine. Qualify them Out. Fast. Find the people who are willing and able to spend the money you know you deserve.

Yes, there will be fewer of them around. So what? You'll have to serve fewer clients because you're earning more $/client. So you'll have more time to look for the right people to serve.

There are people selling websites for $99 (foolish), $999, $9,999 and yes even $99,999 (and more--think Lowe's or Walmart's sites, with tons of items to track and e-shopping and lots of other things to manage). Who you choose to work with and what level of involvement you have are UP TO YOU.

If you're worried "I'm only a 1-man band", stop worrying. Big businesses bring on individuals all the time for their expertise. The problem here is that you haven't figured out what it is you know and how to differentiate yourself.

Think copywriting. Same thing. Did people bring Gary Halbert on board because he had a huge team of copywriters behind him? Nope. They hired him as an individual at very high prices because he got results and they knew about him.

The moment you realize that you DON'T want most people as clients is the moment you'll start becoming powerful.

Exactly Jason. Narrow your focus of the profile of who you're serving. The problem with a lot of folks stems from the fact that in order to get into business, they take all comers. They don't say no because they're trying to survive. But then, as their business grows, they stay in the take all comers mode - or worse, they don't survive because they're busy giving $15,000 worth of work and time to a $500 customer.

Is that really the point of OP's message? The advice is to stop selling websites for a few thousand dollars and pick out the ones who want to spend mega tons of money?

How is that going to help 99% of the people in here? I'm pretty sure the majority of people in this subforum are looking to sell basic wordpress themes and simple SEO/Mobile/Social Media services. The $500-$2,500 range is what their market is whether they like it or not.

If these people are struggling so hard to sell a $500 website, they shouldn't have to decrypt hidden messages that I can't even get, and give insight on how to find clients willing to pay an inexperienced newbie $10,000 - $30,000 routinely.

Both points are valid. The reality is most of us are starting out or have young businesses so we are taking what work we can get and our prices are too low. But it is important for us to understand that there are massive budgets out there for the kind of work we do. But I would also guess, like Ken said, most of use would not want to deal with the corporate environment (it's icky... and I speak from experience).

For most successful small businesses it's a process to move from earning crumbs to what you are worth. For our business we are half the way there. We've stopped taking all comers and raised our prices some, but still not where we want to be.

The mom and pop or under 30 employee world is completely different than the corporate. I'd be very happy to carve out a niche of businesses with 5 to 50 employees. To me that's the sweet spot.

You don't need to have the skill yourself. You can partner up with someone who does have the skill. I've done this many times in different industries, including IT. Learn as you go. Have the conversation with your tech partner before you talk with your prospect about where the boundaries are--what's possible and what's not.

I'm not saying go whale-hunting.

Mom & Pop shops are all about how much money is in the bank account today. That's it. They're usually working "in" their business, not "on" their business.

Larger organizations have professional managers, who are interested in metrics and "more bigger better faster." It's a lot easier to sell someone like this and get them to pay you out of the corporate piggybank than mom's bank account.

When you say "selling $500 - $2500...is hard enough..." (actually, I think it's worse than that--I think people are trying to sell them for $100 - $500), Yeah! You're right! It's easier to sell bigger projects for more money--if you have the right branding/positioning behind you. This is the point I believe most people are missing.

I can tell you this. When I started "doing websites" in 1995, the first account I landed wasn't some rinky dink company. I knew that it took as much time to land and implement a $50,000 deal as it did a $5,000 deal.

The reality is that in B2B services, you should be spreading the size of your accounts so you have a balanced pipeline. If you have one or two monster, gorilla accounts, they own you lock stock and barrel. You also get into the feast or famine cycles of big projects - so balancing out your service portfolio to include a variety of services and products that can be sold at different price points, different intervals (time to revenue), etc... will help diversify the revenue.

Awesome point about not having 1 or 2 clients own you, Michael.

I freakin' HATE that feeling.

And your other point, that it takes just as much time to land a bigger deal as a smaller one, is totally true. Just like we all have the same 24 hours in a day--it's how we use 'em that matters.

Michael,

I've never really seen this talked about here, I proably just missed it.

That is how the pros do it.
My daughter works in the ad industry with a decent size firm.
They charge $25,000 to $30,000 for a 5 page site layed out
exactly the way you described it.

Their designers use photoshop and their programmers code it
by hand. I've talked to the coders and asked them if they have ever
looked into the tools that are now available to do it.

Everyone of them said they can do it easier by hand.

You mentioned 100 to 200 hours.
A normal site at her firm may have 20 hours into it
and these are nice sites.

I was just on a call with Mike Cowles and he mentioned it was
easier for him to charge well over $1,000 for a site than to
sell one cheap. He said it was also a lot less hassel.

I think people struggle at $500 because they don't beleive
in themsleves, what their skill is worth, and what real
businesses are willing to pay.

Good points. Some people want to land a client so bad they go low ball and do a lot of work that just doesn't seem to be worth the pay. It is a constant struggle being competitive, but if the quality is there then definitely should go for what you are worth.

Thanks for sharing!

There's nothing wrong with "lowballing" if that's what you must do in order to get a case study or a some other demonstrable "story" that you can then use to establish your value proposition.

"Getting a website" isn't a value proposition.

And once you've established your chops, you should be identifying the actual, real-world value for what it is that you do in hard dollars, and charging accordingly.

Positioning + experience + authority = your rate - I know it, Michael knows it, most of us in here know it.

Problem is, rookies read these threads and then go on trying to sell websites for 5K with no marketing plans, sales funnel, and so on... and that's where problems start.

Exactly.

And additionally, there's thresholds people build into their business from the getgo based on their model.

In fact, in most services companies, there's a tiny percentage in every local market who control the lion's share of the local market. And then there's everyone else competing for the scraps.

Care to guess who is really profitable in the end? Care to guess who is around in 3-5 years?

Don't mistake what I am saying about "corporate" vs. "local" here. There's a big tier of mid-market customers. A very big tier.

Also, there's a major distinction between those who are creating jobs for themselves vs. those who actually own a business (aka an asset that continues to create value whether or not you're the one giving away your time... err... working in the business).

Here's the reality... I don't even sell the same services that I did 3 years ago. The market changes and shifts. A successful services business is a continuous adaptation to opportunity cycles as markets emerge and mature.

This is a natural cycle that occurs outside the control of any, one business player. You must understand general business market dynamics.

The other aspect to this discussion that comes into play is the dynamic of companies who use their vendors and customers for all they're worth. Keep milking them because most people are too afraid to say "NO" for fear of losing their paying customer. Every savvy businessperson keeps 3-4 competitive smalltime players on the string, leveraging each of their willingness or unwillingness to give away the farm. When one starts to hit the brick wall, they threaten them with moving to the competition.

There really are specific, identifiable reasons why small businesses stay small and disappear while others thrive and grow.

Sadly, most would-be entrepreneurs never undertand these things - at least not until they've crashed and burned several business attempts.

TheBlogger,

I just happened to see your post while reading through.

My comment is off the topic of this thread, but it may help
you and others out.

You may want to do some research on "free" WP templates.

There are lots of "free" templates being used that contain some
very bad things in them, malware, keyloggers and if nothing
else a link to the theme developer.

Plus there are a lot of none educated desingers that don't know how
to write nice clean light php, html, and CSS. This can lead to
possible security problems and a slow loading site.

You may not be doing your customer a service by using a free template.

Disclamer: Because everybody is so sensitive on this forum.
I am not busting your chops, I am not critizing you.
We are all here to help and learn.

How many hours do you have in 1) selling the project, 2) planning the work, 3) doing the work, 4) communicating with the client, 5) supporting the work after the fact?

And are YOU the one doing the work or do you have someone else doing it? (aka a job vs. a business)

Maybe you would get a different result if you changed your expectations? That goes for everyone.

You expect the price to be at such a level, so you sabotage your own efforts, and allow the prospect to beat you up, so it ends up right there.

You expect to sell to only small businesses, or the janitor, so you only talk to those kinds of people.

You expect to be able to offer only a small range of services, so you stick to those and never branch out--yet if you did, and subbed out new services, you could make a ton more money.

What if...you changed your expectations??

99% or more of selling is in your (the salesperson's) head. And every one of us, including me--mine just has a few more zeros at the end--has headtrash.

I can't say if $1000 for a WP site and a nice skin is a good deal or not because I don't know how much time you've spent selling the deal, scoping the project, doing the work, engaging in communication with the custmer, and any other time consuming activity.

As a consulting business owner, I won't even remotely consider any project or service that doesn't produce a 30% gross margin on the project. That's cost of sales, cost of project resources, etc... Then after you pay all that, the rest of your business operating overhead has to come out of the 30% (rent, E&O insurance, etc..)

So 30% is the absolute minimum number for me... that's almost a giveaway. I shoot for 50%+.

I also operate under the assumption that I only have the bandwidth to deliver a fixed amount of work product with the resources that I presently have.

So I calculate whatever that total amount of available man hour productive effort would represent in terms of capacity at say... 40-50 hours per week max (and 50 is really too much on a sustained basis when you're hiring people).

So if I have 40 hours per week to work with per person, I want to maximize the total amount of net profit per resource that I can.

If my resources can sell a WP site for $2000, I have to pay a salary and/or commission in the neighborhood of 20% - so that's $200.

This means I have $800 to work with, so my benchmark is $300 minimum profit on the deal. This leaves $500 in labor and overhead. If I am paying a solid offshore resource (not some Fiverr fly-by-night BS crap), I am spending probably $17-25 per hour for top-notch talent. I don't work with crap talent because my reputation is on the line with the customer. This gives me say 25 hours of dev time. So you say, great! A WP site can be done in 25 hours with a template.

Except for one thing.... managing the project and the customer communication in the process.

Whoopsie. Project management. That's usually a factor of around 10-20% of the man hours worked. I only have a budget of $500 to work with here, but I need to be able to pay a PM out of that. Yes, a good PM can manage many multiple projects, but they're still going to require payment.

So let's say out of that $500, 20% of the effort is PM budget... this leaves me with $100 for PM and $400 for the resources. This means at $20/hour you now have 20 hours of time.

But how much does a good project manager cost? $50/hr? If you're lucky to find a good one. My crappy ones are $50/hour. My good ones are $75. People that I would put in front of a customer anyway. These are customer facing folks, remember?

So, if your PM can keep their entire project effort capped at 1-2 hours (hope nothing goes wrong and you've automated 100% of your customer process), and your developer can deliver in 20 hours... that's everything including going back and fixing everything that didn't pass QA in the first run, then... guess what?

Your total gross billable hourly rate at that point is $20 - $33 per hour.

You consumed probably 30-50 resource hours total for a grand profit of $6 - $10 per hour. Those resources are dedicated to that task for that period of time and corresponding rate.

And nothing better go wrong in the middle.

Meanwhile, if you're billing a better customer for the same effort say... $80-100 per hour... and say... something actually does go wrong in the process {ahem} as it does nearly 100% of the time (human factors)... well... nevermind.

Oh, and this assumes that you have other people doing the work as well.

I'm quite certain that most of the people here are doing the actual work... at these rates and profit margins. I am also certain they don't have an automated business process of selling, managing, and delivering the work in a systematic manner - so it's going to be erratic, sporadic, and a case study in Michael Gerber 101.

So, no I don't think $1000 is a good deal for a template website. I think $5000 is a good deal for a template website. It takes the exact same effort to manage and deliver a $5000 deal as it does a $1000 deal. Your mission is to find business owners that will pay you $5000 for the same work, and leave the bargain basement price cutters to the chumps and n00bs that won't be in business in a year because they play with bottom feeders.

What? You don't like my financial analysis of the deal?

This IS a BUSINESS that we're talking about here.

Yeah Blase, I thought you were talking about $1000 being a good deal for the developer.

LOL... all my diatribe and financial breakdown is hopefully still useful for someone here.

I just see so many people putting in all this effort for Walmart wages and I think to myself... "Self, why do these people work so hard and put so much at risk for Walmart wages??"

Wow, good thread. Gotta come back with a cup of java and reread.

I'd suggest that you're already falling into the trap if you're even thinking in terms of your competitor's price.

What you can charge for a "thing" is based on the perception of value that you've created for that "thing" in advance of the sale. It has nothing to do with the competition if you're doing it properly. In fact, there would be little to no competition if your marketing is really in check, and the only thing working against you is the normal thing that works against all B2B service deals - inertia... no action... no decision...

If you're "selling a website" to people who have decided "I need to get a website", then you may or may not be dealing with a customer that understands the intrinsic value of what the website is and can do. Therefore, they are simply buying that "thing" just like they buy other "things". You've instantly gone into the deal selling a commodity with no real distinction or differentiation.

However, if you specialize in lead generation systems for commercial real estate agents... or something very specific with a quantifiable ROI attached to the deliverable, well... now you're talking about some game.

"Mr. Commercial Property Agent, if I can show you a way to generate just one additional sale every quarter, what would that represent in average deal commission to you? $50,000?"

"So if I help you generate $200,000 in additional revenue this year with my Commercial Real Estate Profit Engine 5000 Super Deluxe Pro Program, you'd agree that by giving me a dime for every dollar that I create for you - it's a good financial investment, right?"

See what I did there?

Bingo!

The problem here is that most inexperienced business folks have absolutely no idea how to evaluate the value of what they create. Mostly because they don't understand the value chain of exactly what they do, and why/how it fits into the overall food chain of a business process.

I was talking to one of my mentoring students last evening. A year ago, he was struggling with his web design company. He was actually only doing web design because he really wanted to be in the SEO business, and thought the only way he could get SEO clients was to do web work.

Over the course of a year, we've corrected that thinking on his part, and he's no longer scraping the bottom of the barrel. We've learned how to say "NO" to crap deals just for the sake of getting a client. There's no more "take all comers".

Today, I am reviewing his proposal to a client for a single project that will be $50-60,000/year for recurring, managed SEO services. Based on his effort, he's been able to quantify the direct value of his effort, and show a hard ROI of his proposed work for an increase in $6,000,000 in sales annually to his client.

Want $50,000? Create $6,000,000 in value. If you don't understand how your direct work efforts relates to that end result, you're never going to get past hustling nickels and dimes with whomever will give you a few minutes to schlep your carney barker schpiel.

Wanting to sell services to "mom and pop" business isn't all that bad but they will make sure that you invest all your time and energy for their measly $500.00. They will expect their website to compete with a major corp. site even though they paid a small percentage of what big corps. pay.

The reason I know this because I owned a small construction business and this is no different. We would do work for the mom and pops and also big corporations. Mom and pops would do their best to lowball you. If we agreed to do it at a lower price then we quoted them, we would do 2 times the amount of the work.

With the larger businesses, we could charge our worth and all they required is we do what we intended to do, no more no less.

Always set your price higher than you normally would, especially when dealing with mom and pop businesses. If you don't get the business from them, oh well on to the next.