On March 28-29, Brian and I attended Word Camp San Diego 2015, held at the Hall of Champions in gorgeous Balboa Park. With about 250 attendees, the two-day event drew people from across the US and beyond, and featured: a speaker/sponsor dinner on Friday night, learning sessions, lunch, and an after-party on Saturday, learning sessions on Sunday, and loads of snacks and drinks all day. Plus, there was a lot of swag, including t-shirts, beach balls, frisbees, and water bottles.
Saturday was broken down into four tracks — Beginner, Admin (site owner), Designer, and Developer — each with seven sessions and one panel. Brian spoke in the Design Track, delivering a talk titled Child Themes and The Genesis Framework.
Sunday featured two hands-on, progressive bootcamps — one on theme development and one on plugin development — as well as two business tracks, with one focused on services and one focused on products. I spoke in the Service Business Track, delivering a talk titled Pricing The Unknown: Dealing With Uncertainty.
Below is a complete recap of my Word Camp San Diego presentation, including all of my slides and some extra thoughts on the topic.
Pricing The Unknown: Dealing With Uncertainty
In a perfect world, every potential client who contacts us about a new project would know exactly what they need, have a clear scope of work with a requirements list, and understand the costs associated with their request.
But perfectly educated clients and potential clients are rarely reality because they don’t build websites for a living.
They don’t spend all of their time learning about web design and development. They aren’t experts in web design and shouldn’t be expected to become experts.
Our clients hire us because they are busy running their business and doing what they do best, and they trust us to be the experts they need:
- To guide them through the process
- To educate them when necessary
- To put their goals and best interests first at all times, and
- To provide an accurate, honest, clear estimate of cost up front.
Often the process of providing a web design quote is a process of discovery, like peeling back the layers of an onion to learn about obstacles and constraints, gain clarity about requirements and objectives, set expectations, and map out deliverables.
Pricing Web Design Projects Is Tough
If a designer or developer doesn’t have enough information about a project up front and doesn’t get the information needed, providing a web design quote will be tough because assumptions or educated guesses must be made about the full scope of work — and that is never the best approach because chances are the estimate will be too high or too low.
- If the quote is too high, there is risk of losing the project and the client.
- If the quote is too low, there is risk of not being taken seriously or being second guessed as to why your estimate doesn’t align with other quotes gathered.
When information about a potential web design project is missing, it causes problems for potential clients as well. It creates a confusing gap between the expectations of the prospect and the estimate provided by the designer that can be difficult to overcome — especially if the designer isn’t confident in communicating the value they deliver and skilled in explaining and pitching the reasoning behind and benefits of the solution they are proposing.
Effective Pricing Helps Designer and Clients Alike
When a designer or developer does their due diligence and a potential client works with them in the estimating process to answer questions honestly and with as much detail and information as possible, it results in clear, accurate, detailed estimates — and everyone wins.
Designers and developers win because they are able to confidently deliver accurate estimates based on clear deliverables, timelines, and an agreed upon scope of work — and enjoy fees that are in alignment with their experience and expertise.
Clients win because they receive a clear, accurate estimate that explains exactly what they will get, at what price, and when. This will help set expectations, dispel confusion, and reduce revisions and future surprises.
Everyone Around You Wins!
As designers and developers when we quote new projects accurately and have open, honest conversations with new clients about price and expectations, projects run more smoothly, we enjoy less stress, and enjoy what we do every day and our lives much more.
We often hear the same from our clients as well. They enjoy the process of designing their website or redesigning an existing site much more than ever before because they know exactly what’s happening every step of the way.
But What Happens When You Don’t Have A Clear Scope Of Work Or Don’t Have All The Details You Need?
Unfortunately there are times when:
- A potential client doesn’t have answers to the questions required to provide an estimate
- The new project is working on an existing website and not all of the details or past obstacles are clear
- A potential client will not answer questions or share the details you need to provide an accurate proposal
- A “simple” request is far from simple
In all of these scenarios, it’s easy to fall into some pricing traps and to make mistakes that can create stress, frustration, and potential conflict.
Common Mistakes In Pricing Web Design Projects
Some of the most common mistakes made when quoting web design projects are:
- Not enough due diligence. Designers and developers can’t take a client’s word on face value alone because often there is much more to the story that isn’t being shared simply because they don’t know it’s important. By not getting ALL of the information needed up front, projects are more likely to hit major obstacles, require change orders and added cost, and cause frustration and stress.
- Focusing only on “doing” time. When asked for a quote by a potential client, it’s easy for designers and developers to fall into the trap of basing the cost on the amount of time it takes them to do the actual work. The problem here is that they often fail to account for the hours spent on project management, email communication, research, training, file preparation for print or go-live, revisions, searching for stock photos, testing typography stacks, brainstorming or sketching ideas, configuring premium plugins etc.
- Using assumptions and educated guesses. Pulling information out of a prospect is not a comfortable task. So instead most designers and developers ask a few questions and move on, creating a proposal based on what they assume the full scope of work is. Yikes! Not providing an accurate estimate sets the stage for surprise costs and delays.
- “Should be” pricing. Designers and developers want their clients to like them, to love them. They want to make it easy. They want all of their prospects to say yes. So instead of doing the needed work to gain the critical information needed to provide a detailed estimate, they give a ballpark estimate based on what something similar “should cost” instead of what is actually costs. These estimates are often MUCH lower than they should be and based in fear not real data.
Real Client Scenarios
I’ve been working with clients since 1997 and Bourn Creative will enjoy its ten year anniversary this July. In that time we have made all of the pricing mistakes listed above and have learned quite a few lessons along the way. Those experiences are what allow us to now confidently provide accurate proposals for new work that is a great fit for our expertise.
Let’s look at the four most common scenarios we encounter with potential clients, where there are unknowns and uncertainty, and explore the best ways to handle them and price the projects effectively.
Pricing A Simple Web Design Project
Any designer or developer will tell you that rarely is simple ever simple. What seems simple to a potential client — like a simple five page website — is actually quite complicated and often several external factors must be accounted for due to their impact on the project.
- There may be technical debt. Technical debt refers to technical problems or issues that existed before your designer or developer got involved. This may include things like: hosting accounts with other sites in it, messy hosting accounts, lost passwords, no access to accounts, past hacked sites, outdated WordPress installs or plugins, etc.
- The client has no branding in place. A simple website design project quickly becomes something much more complex if the client doesn’t have a logo, color palette, or typography established and the designer or developer must create it as part of the project.
If you encounter situations like these, there are a few options to avoid surprises in cost for the client and an eroding hourly rate for the designer or developer:
OPTION 1: Most technical debt issues happen when taking a new website live. If we are dealing with an existing hosting account, often we will quote a flat rate for the theme design and development, and quote the go-live of the final site hourly to ensure we cover our time.
In this case, we’ll provide a ballpark range of hours for the go-live based on the final site and the status of the hosting account.
OPTION 2: The other option we use is a paid technical assessment that is completed before we quote a project. In a paid technical assessment, we review the existing site, hosting account, forms, and more to identify any potential issues.
At the end of the technical assessment, the client has a report of our findings, and we have the data we need to provide an accurate estimate based on actual data. If the client signs the estimate and chooses to move forward with us, the investment in the technical assessment is put toward their initial deposit.
OPTION 3: Think about every external item that may affect the project. Ask the potential client about branding, content, imagery, opt-ins, forms, and more. For any items that they do not want included in their project, but may need or ask for during the project:
- Include them as optional “add-ons” in the proposal. This will establish that they are not included and set an expectation of cost should they be requested later on.
- Be very clear about what IS and IS NOT included in the base estimate.
The Existing Website Is A Mess Or Has Problems — You And Your Potential Client Are Hesitant To Jump In
While we hope that client has an amazing experience with their designer or developer, that is not always the case. At Bourn Creative we regularly receive inquiries from potential clients who invested in a new site or a site redesign with another company, were unhappy with their experience, and are looking for a new partner.
In some of these cases, when we review the sites during our initial consultation we find some egregious errors, and know that for every error we see on the front end of the site, there are probably ten we can’t see — and that is a tough place to be.
Recently we ran into this exact situation. We were hesitant to jump in because the existing site had so many problems, and the potential client was hesitant to jump into another retainer relationship after their last one didn’t go so well.
In this situation, before we get to an official proposal, we pitch a discovery project with a set number of hours.
With this particular client, they had a few issues with their site they knew they needed fixed. So we pitched a 10 hour discovery project with a set list of prioritized items they wanted to tackle.
- The project allowed us to discover what was really going on in the back end of the site
- It allowed our potential client to test the waters and see what it would be like to work with us on an ongoing basis.
- And it gave us an opportunity to make sure we were a great fit for the client, the site, and their expectations
At the end of the discovery project, the potential client has a report of exactly what what done, what is still left to do, what concerns/issues were identified, and how we propose to handle the new issues moving forward.
The keys to a successful discovery project are to:
- Agree on a set number of hours for a flat fee.
- Outline the deliverables or tasks to be completed and prioritize the list.
- Over communicate and communicate clearly — let them know exactly what’s happening, what you are finding, and how it will impact the list of desired deliverables.
- Create a plan for what happens after the discovery project is over (this will shape your future estimate).
This is also a great opportunity to establish boundaries and expectations, demonstrate processes, and set the tone for the rest of your relationship.
The Potential Client Has No Project Specifications
Sometimes a potential client will fill out our new project form and answer every question with things like I don’t know, isn’t that your job, not sure, none, or you tell me. Unfortunately it is VERY difficult for any designer or developer to provide an accurate estimate when the prospective client provides no details about what they want or need.
At that point, we will often send a response via email with a couple follow up questions and if they respond, we’ll schedule a call to ask more questions and get the information we need to provide an accurate estimate. Sometimes we get all the information we need, and sometimes the potential client can’t answer our questions.
This is very common with new clients asking about membership sites and ecommerce sites.
The problem is that the prosective client has only thought about the fun, sexy part of the project, not the nitty-gritty details of the project — and sometimes the smallest detail can make a huge impact on the timeline and budget of a project.
In these cases we pitch a Scoping Project.
A scoping project is separate from the main project and is completed before you provide an estimate. In a scoping project, the prospective client pays you as a consultant to help them create a project requirements document or creative brief.
The focus during a scoping project is not on design and development, but on:
- Identifying constraints
- Detailing all requirements
- Outlining milestones and deliverables
- Planning the scope of work
- Defining the objectives — what success looks like
A successful scoping project allows the client and the designer/developer to sample what it would be like to work with each other, and produces a solid project requirements document that will serve as a guide for an accurate estimate of work.
At the end of the scoping project, one of two things may happen:
- You all decide you enjoy working together and now the designer or developer has a clear scope of work and can provide a detailed, accurate estimate for the design and development of the project.
- You may decide during the project that the partnership isn’t going to be a great fit. In this case, the client now has a clear scope of work and requirements document they can take to any other company to get a quote.
What Happens When Prospects Won’t Provide Any Information?
As I eluded to above, some potential clients don’t want to provide any information about their project.
- They leave important fields on project inquiry forms blank or provide no answer.
- They can’t answer many of your questions on the phone and in most of these cases refuse to talk about their budget.
- They object to a technical assessment, a discovery project, or a scoping project.
- But they still want an estimate and a timeline.
This happens to designers and developers a lot and there is absolutely no way a designer or developer can provide an accurate estimate when they don’t know what they are creating the estimate for.
Unfortunately, most of the time these inquiries are ignored or deleted because it is a signal that the prospective client isn’t serious about their project or they are spamming inquiry forms hoping for a cheap quote — and there just aren’t enough hours in the day to chase down people who aren’t serious about their project.
But there are going to be those who demand an estimate and a timeline anyway.
In these instances they are basically asking for an educated guess as to what the project scope will be based on their previous experiences. These estimates will ALMOST ALWAYS be the highest price because the designer or developer needs to cover their time in case the worst case scenario present itself.
Pricing The Unknown
When pricing the unknown, a designer or developer needs to account for all of their time, so they have two options when it comes to pricing:
- Quote the potential client your hourly rate, give them a ballpark range of hours, track your hours, and bill them for the total. Remember to track your time for discovery, research, client communication, project management, phone calls, meetings, file preparation, design, development, etc.
- Use a three-pronged approach. Evaluate 1) the estimated number of hours you think it will be, 2) the best case scenario number of hours, and 3) the worst case scenario number of hours. Use these three numbers to make a educated decision about the final estimate amount. If you’re not quite sure how to figure out the final number, my friend Chris Lema created a great blog post/video on pricing without requirements where he walks you through this process and the formula he uses.
Tips On Communicating With Potential Clients During The Sales Process
When you are communicating with potential new clients about a project don’t rely on email.
Pick up the phone, jump on Skype, or do a Google Hangout as soon as possible. You will gain much more insights into your client’s feelings and attitude about the project when you can hear their voice, or even better, see their body language and facial expressions.
My best advice is to ask a lot of questions and to keep asking them until you get the clarity you need to provide an estimate you can feel confident about. Ask questions like:
- When you say X, what does that mean to you?
- Can you explain your thoughts behind X?
Occasionally a potential client will get testy about the persistent question asking.
It’s important to communicate that while it is a lot of questions and some do sound repetitive, when it comes to technology, often times people mean very different things when using the same language. These questions are critical to achieve clear communication, to ensure everyone is on the same page, and that no incorrect assumptions are being made.
The goal here is to provide the client the most accurate and complete estimate as possible and reduce or eliminate future surprises.
Understand The Decision-Making Process
It is imperative that designers and developers understand WHY the project is being done in the first place, who is involved, and what results are expected. Some questions to ask are:
- What challenge or problem prompted them to pursue the project?
- How is this challenge or problem affecting their business?
- Why is the project important right now?
- Why this designer or developer?
- Who are the stakeholders involved? Who is making the decisions? Is it one person, a partnership, a superior to your contact, decision by committee?
- What results are expected?
- What timeline and resources are expected?
External Factors That Affect Design Projects
It is also important to understand the external elements that will affect the project. These elements could affect budget, timeline, and even the success of the project.
Some common questions we ask include:
- Do you have existing brand elements for us to work with, like a logo, color palette, or typography stack?
- Have you started working on your website content or do you have existing content? Will they be writing or editing it themselves or working with a copywriter?
- What about imagery? Do they have their own or will they need stock? Will we be working with existing blog posts that have tiny images that all need to be replaced, or are we starting from scratch and need to pull new images for every page or post?
- Will they be using an opt-in offer for list building? If so, do they have an email marketing provider in place? Do they know what the offer will be? Does it still need to be created?
- Are there any integrations that need to happen with third-party software systems or premium plugins?
- Wil there be any long form sales or landing pages that need to be created?
- What do you want people to DO once they reach your website?
Remember that if the potential client has a hard time communicating what they want, ask them if they have a sample they can show you. Most people will have a few sites they have been inspired by or site they want to model their site after.
What Does Success Look Like?
Wrap up your conversation with the question: What does a success for this project look like to you?
Even after asking question after question and discussing the project in detail with a prospective client, asking this one final question always gives us some helpful added insight and in some cases a surprise detail or two that we know we will need to follow up on.
When To Turn Down A Project
If a potential client will not answer our questions, will not speak with us on the phone about the project, and is extremely difficult to communicate with, we typically will choose to not provide an estimate and pass on the project. Likewise, if the project isn’t a great fit for our team, we’ll pass on the project, making a referral to a provider who is a better fit.
At Bourn Creative, for us to consider a project, it must be interesting and fun to work on — and it must return a certain amount of profit to the company. That profit is what we use for internal reinvestment.
If we are presented with an awesome new project and there is one aspect of the project that will be new for our team, we will provide a proposal for the project and reinvest the agency profit back into the project to learn something new and boost our skills.
If the potential project has two elements that are new for our team and we already have an existing relationship with a specialist in that area, we will take on the project, again dedicating our profit to to learning something new and boosting our skills.
We never increase the price of a project to cover our learning time.
If there are three or more elements of the project that are unfamiliar to us, we will pass on the project and refer the client to another provider we know and respect.
Firm, Fair, And Friendly
We base all of our company communication and relationships on the belief that firm, fair, and friendly works every time.
- Firm: Stay firm on boundaries, cost, timelines, scope of work, etc. to create clear expectations and reduce confusion.
- Fair: Approach every aspect of the project with integrity and fairness for both the client and the designer and developer.
- Friendly: Always operate with the clients’ best interests at heart. Understand that this process may be unfamiliar and a little scary for clients and that patience, education, and empathy will be needed.
Pricing The Unknown Is A Process
Whether it’s a graphic design or web design project, pricing projects with unknown variables isn’t easy or fun for anyone! It creates inaccurate estimates based on assumptions and guesses, and causes more obstacles and increases in cost throughout the project.
By taking the time to do the necessary due diligence up front, or by pitching a technical assessment, scoping project, or discovery project, you can mitigate the challenges that come with unknowns and gain the knowledge you need to provide a clear, accurate estimate. And if the information needed isn’t available and an estimate must still be provided, you can check out Chris’ formula to figure out a price.
Learning to price and estimate projects effectively will help create and foster more successful relationships with clients. Everyone involved will have less stress, fewer surprises, and more clarity.