Pricing for the Web: How to Do Great Work Without Losing Your Shirt (and Soul)

Learn real-world pricing strategies for web design and development services. First presented to the Atlanta Web Design Group in February 2014.

Transcript

1. Pricing for the Web | Brad Weaver PRICING FOR THE WEB How to Do Great Work Without Losing Your Shirt (and Soul)
2. Pricing for the Web | Brad Weaver #awdgpricing
3. Pricing for the Web | Brad Weaver Brad Weaver @suckerpunchinc
4. Pricing for the Web | Brad Weaver Designer, UX/IA, Front-end Dev
5. Pricing for the Web | Brad Weaver Let’s Be Honest.
6. Pricing for the Web | Brad Weaver Money is uncomfortable.
7. Pricing for the Web | Brad Weaver “Money taps into our deepest emotions and symbolizes what we fear, hope for, and desire in life.” ! -Mikelann Valterra “”
8. Pricing for the Web | Brad Weaver Making Money a Priority Doesn’t Make You a Jerk
9. Pricing for the Web | Brad Weaver It Makes You a Professional
10. Pricing for the Web | Brad Weaver a person engaged in a specified activity as one's main paid occupation rather than as a pastime.
11. Pricing for the Web | Brad Weaver It means you have self-worth.
12. Pricing for the Web | Brad Weaver but… today, most of us are charging far less than we’re worth.
13. Pricing for the Web | Brad Weaver Clients want to talk about money!
14. Pricing for the Web | Brad Weaver Build Confidence
15. Pricing for the Web | Brad Weaver So that you can answer…
16. Pricing for the Web | Brad Weaver The Question
17. Pricing for the Web | Brad Weaver How much is a website?
18. Pricing for the Web | Brad Weaver This is gonna be good
19. Pricing for the Web | Brad Weaver How much is a website?
20. Pricing for the Web | Brad Weaver Clients aren’t buying design every day…
21. Pricing for the Web | Brad Weaver …you can’t expect them to just know how this works.
22. Pricing for the Web | Brad Weaver ***ADD IMAGE - Candy Mountain*** Land of Unlimited Funds
23. Pricing for the Web | Brad Weaver We can educate clients.
24. Pricing for the Web | Brad Weaver A Better Question
25. Pricing for the Web | Brad Weaver How much do you charge?
26. Pricing for the Web | Brad Weaver There is a Formula
27. Pricing for the Web | Brad Weaver hours ÷ expenses + profit = rate
28. Pricing for the Web | Brad Weaver hours ÷ expenses + profit = rate The amount of time you are available for billable work.
29. Pricing for the Web | Brad Weaver hours ÷ expenses + profit = rate Average is 120
30. Pricing for the Web | Brad Weaver hours ÷ expenses + profit = rate Your Total Business Costs, including your salary
31. Pricing for the Web | Brad Weaver hours ÷ expenses + profit = rate 10 to 20% on top of Expenses
32. Pricing for the Web | Brad Weaver You Have the Secret Formula
33. Pricing for the Web | Brad Weaver But, It’s Not That Simple
34. Pricing for the Web | Brad Weaver Value
35. Pricing for the Web | Brad Weaver pushes market rates down & creates unnecessary mystery for something that should be clear Pricing in the Dark
36. Pricing for the Web | Brad Weaver Ask Your Peers
37. Pricing for the Web | Brad Weaver Less
38. Pricing for the Web | Brad Weaver More
39. Pricing for the Web | Brad Weaver Define Your Market
40. Pricing for the Web | Brad Weaver Atlanta = 105% New York = 140%
41. Pricing for the Web | Brad Weaver Your Experience
42. Pricing for the Web | Brad Weaver UX Designer $75,000 to $120,000
43. Pricing for the Web | Brad Weaver Web Designer (5+yrs) $77,000 to $107,000
44. Pricing for the Web | Brad Weaver Web Designer (<5yrs) $53,000 to $80,000
45. Pricing for the Web | Brad Weaver Front-end Developer $65,000 to $90,000
46. Pricing for the Web | Brad Weaver Rails/PHP Developer $72,000 to $92,000
47. Pricing for the Web | Brad Weaver Find Your Rate
48. Pricing for the Web | Brad Weaver Either way, YOU need to know what it is.
49. Pricing for the Web | Brad Weaver Sharing is Caring
50. Pricing for the Web | Brad Weaver What I Charge
51. Pricing for the Web | Brad Weaver $100 to $125 an Hour
52. Pricing for the Web | Brad Weaver
53. Pricing for the Web | Brad Weaver There is Always Someone Cheaper
54. Pricing for the Web | Brad Weaver Negotiate on price if you have to, but don’t compare on price.
55. Pricing for the Web | Brad Weaver Compete on quality, value, and fit for your business.
56. Pricing for the Web | Brad Weaver It’s the client’s job to get the most work from you for the least amount of money.
57. Pricing for the Web | Brad Weaver If they aren’t at least trying, you probably left money on the table.
58. Pricing for the Web | Brad Weaver What About Quality?
59. Pricing for the Web | Brad Weaver Does it matter?
60. Pricing for the Web | Brad Weaver “You are responsible for the work you put into the world.” ! - Mike Monteiro “”
61. Pricing for the Web | Brad Weaver Controlled Pricing = Freedom
62. Pricing for the Web | Brad Weaver Higher Quality
63. Pricing for the Web | Brad Weaver Side Projects
64. Pricing for the Web | Brad Weaver Pro-bono
65. Pricing for the Web | Brad Weaver Learning a New Skill
66. Pricing for the Web | Brad Weaver Working on Cool Shit
67. Pricing for the Web | Brad Weaver Avoid Emotional Pricing
68. Pricing for the Web | Brad Weaver Your gut is not a calculator
69. Pricing for the Web | Brad Weaver Price with pride and confidence — as professionals, not as technicians.
70. Pricing for the Web | Brad Weaver Ask yourself…
71. Pricing for the Web | Brad Weaver Can you do good work for this client?
72. Pricing for the Web | Brad Weaver Can you make some money on it?
73. Pricing for the Web | Brad Weaver Are you embarrassed by the likely outcome?
74. Pricing for the Web | Brad Weaver You Can Do Good Work & Make Money
75. Pricing for the Web | Brad Weaver “We have a tendency to meet our financial obligations, not our financial desires — because we want to get the gig!” ! - Freelancer’s Bible “”
76. Pricing for the Web | Brad Weaver Enough with Emotions
77. Pricing for the Web | Brad Weaver How Much is a Website?
78. Pricing for the Web | Brad Weaver Different Approaches
79. Pricing for the Web | Brad Weaver • Value/Project Based • Hourly • Retainer • Investment/Ownership • Residual Income Pricing Models
80. Pricing for the Web | Brad Weaver Model 1: Value/Project Pricing
81. Pricing for the Web | Brad Weaver • Fixed cost • Tied to deliverables • Paid in 50%, 33% or 25% increments Flat Project Pricing
82. Pricing for the Web | Brad Weaver • Clients prefer it • Very common • Predictable • Opportunity for profit is high Flat Project Pros
83. Pricing for the Web | Brad Weaver • Tendency to undercharge • Risk of going over budget and losing money • Tough to cover unexpected challenges • Commonality can lead to limited understanding of value Flat Project Cons
84. Pricing for the Web | Brad Weaver • $2,500 to $7,500 for most basic custom sites • $5,000 to $15,000 for dynamic sites, basic commerce Average Flat Cost
85. Pricing for the Web | Brad Weaver How to Calculate
86. Pricing for the Web | Brad Weaver Your rate x How long you think it will take
87. Pricing for the Web | Brad Weaver • Similar to Project Pricing • Difference is adding a % based on experience behind work being performed or contributors • Often used for creative and writing, not as much for development Value-based Pricing
88. Pricing for the Web | Brad Weaver • Size of client can be important • Profit motivation • Knowledge of Subject or Process Depends on the Client
89. Pricing for the Web | Brad Weaver Charge Bigger Clients More
90. Pricing for the Web | Brad Weaver “Charge as much as you can, deliver an honest value, and never work for free.” ! - Mike Monteiro “”
91. Pricing for the Web | Brad Weaver • A fancy way of saying get paid what you’re worth on flat-price projects • Marketplace • Client’s perceived value What’s the Difference?
92. Pricing for the Web | Brad Weaver The client is paying you for solutions…
93. Pricing for the Web | Brad Weaver not the time that it took to get there.
94. Pricing for the Web | Brad Weaver How do I do it?
95. Pricing for the Web | Brad Weaver Ask the Client for a Budget
96. Pricing for the Web | Brad Weaver Don’t Make This Mistake
97. Pricing for the Web | Brad Weaver Tie payments to specific deliverables on a calendar that are under your control, not the client.
98. Pricing for the Web | Brad Weaver Model 2: Hourly Pricing
99. Pricing for the Web | Brad Weaver • Get paid for what you work • Best for nebulous, undefined deliverables • Better for developers than creative • Easier to say no to changes • Rush rates are your friend Hourly Pricing Pros
100. Pricing for the Web | Brad Weaver • Clients often hate it • Unpredictable • Profit requires staffing, subcontracting, or lying • Penalizes you if you’re fast • For longer-term clients, harder to raise rate • Easier for clients to kill the project Hourly Pricing Cons
101. Pricing for the Web | Brad Weaver Hourly isn’t complicated, but it’s messy.
102. Pricing for the Web | Brad Weaver Great for clients who always want more and change their minds constantly
103. Pricing for the Web | Brad Weaver Model 3: Retainers
104. Pricing for the Web | Brad Weaver • Set amount of money each month • Hourly, but guaranteed • Use it or lose it vs. prepaid hours Time-based Retainer
105. Pricing for the Web | Brad Weaver • Builds client relationship • Steady income • Planning is easier • Greater time for creativity Time-based Retainer Pros
106. Pricing for the Web | Brad Weaver • Clients expect a discount • Clients think you work for them, on their schedule • On-site time may be expected • Less valuable work to “burn hours” • Can create a backlog of work • Profit opportunity limited without staff or subcontractors Time-based Retainer Cons
107. Pricing for the Web | Brad Weaver Model 4: Package Pricing
108. Pricing for the Web | Brad Weaver • Posted publicly • Fixed cost • Includes multiple services/ deliverables, i.e., design and development, branding and web Package Pricing
109. Pricing for the Web | Brad Weaver • Makes it difficult for clients to “bargain you down” • Good for repeat clients and agency relationships • Good for clients with multiple businesses or business units • Good for template-oriented designers • Client feels in control Package Pricing Pros
110. Pricing for the Web | Brad Weaver • Minimal opportunity for profit without high volume • High volume means tight timelines • Difficult to do high quality work • Zero room for error • If you like avoiding confrontation, this is good Package Pricing Cons
111. Pricing for the Web | Brad Weaver Model 5: Investment/ Ownership
112. Pricing for the Web | Brad Weaver NO
113. Pricing for the Web | Brad Weaver “Beware of clients who want you to work for equity or other things that can’t be easily converted into rent.” ! - Mike Monteiro “”
114. Pricing for the Web | Brad Weaver Model 6: Residual Income
115. Pricing for the Web | Brad Weaver I wouldn’t recommend it
116. Pricing for the Web | Brad Weaver RFPs & Discovery
117. Pricing for the Web | Brad Weaver “We never respond to RFPs”
118. Pricing for the Web | Brad Weaver Respond with a Contract, not a Proposal
119. Pricing for the Web | Brad Weaver Discovery – Get Paid to Provide a Quote
120. Pricing for the Web | Brad Weaver What did you say?
121. Pricing for the Web | Brad Weaver Discovery
122. Pricing for the Web | Brad Weaver Which is Best?
123. Pricing for the Web | Brad Weaver • Design • Front-end dev (HTML, CSS, JS) • Template projects • One-off components Flat/Value Pricing
124. Pricing for the Web | Brad Weaver • Complex dev • Team contributions • Repairs/maintenance • Strategy, consulting, UX Hourly
125. Pricing for the Web | Brad Weaver • Strategy, consulting, UX • Repeat creative • Sites that require routine maintenance • Content Strategy/Writing Time-based Retainer
126. Pricing for the Web | Brad Weaver • Small business • Theme/template based • Startups and launch sites • Good if you’re just starting out Package Pricing
127. Pricing for the Web | Brad Weaver Key Takeaways The Rules
128. Pricing for the Web | Brad Weaver 1 2 3 4 5 6 7 8 Track Your Time Track Your Communications Get a Contract Define Scope Invoice on Time Set Boundaries Revisit / Post-mortems Manage Your Money
129. Pricing for the Web | Brad Weaver Resources
130. Pricing for the Web | Brad Weaver • Creative Professionals Guide to Money -Ilise Benun • Design Is A Job - Mike Monteiro • Freelancer’s Bible - Sara Horowitz • Double Your Freelancing Rate in 14 Days - Brennan Dunn • Rework - 37signals • The Hidden Agendas: A Proven Way to Win Business & Create a Following - Kevin Allen • Web Design Confidential - Amanda Hackwith • The Real Business of Web Design - John Waters • The Business Side of Creativity - Cameron Foote • How to be a Graphic Designer Without Losing Your Soul - Adrian Shaughnessy Books
131. Pricing for the Web | Brad Weaver • 99u • Freelancer’s Union • Creative Mornings • Marketing Mentor • How Design • International Freelancer’s Academy • Business of Freelancing (Podcast) Web
132. Pricing for the Web | Brad Weaver • Freshbooks, Harvest, Solo • Timely, Function Fox, Freckle • Rescue Time, Slife • Basecamp, Trello, Asana, Flow • Slack, Campfire • Ballpark, Bidsketch Software
133. Pricing for the Web | Brad Weaver • Mark McGuinness — Lateral Action • Ilise Benun — Marketing Mentor • Ed Gandia — Freelancer Academy Coaching
134. Pricing for the Web | Brad Weaver github.com/ bradweaver/ pricingfortheweb
135. Pricing for the Web | Brad Weaver #awdgpricing
136. Pricing for the Web | Brad Weaver “The value of a dollar is social, as it is created by society.” ! - Ralph Waldo Emerson “”
137. Pricing for the Web | Brad Weaver Thank You!