How much should you charge for web design?
Pricing is one of the most critical components for building your web design business. Set the price too high and you scare off all the clients. Set the price too low and you burn out. But, how do you know what's too high or too low? We're going to go through 10 questions to ask yourself to dial in your ideal prices.
Your Mindset
The first five questions which we'll be stepping through today are in the context of your mindset as a web designer. Next week we'll walk through the second set of five questions that are in the context of your client's mindset.
Who do you feel like you're competing against?
Let me start by saying that I do NOT think you should go figure out what everyone else is charging and then throw your price in there at the same level. This question is designed to give you a sense of what audience you're attracting. Are you attracting cheap clients looking for low-budget websites? Or, are you attracting high-ticket clients ready to spend in the five-figures for your consulting?
If you feel like you're pulling leads from an audience who is shopping for sites on Upwork, Fiverr, and Craigslist but you plan to charge dramatically more than what everyone else is charging then you are most likely going to price yourself out of the market. In other words, the leads you're attracting are not looking to spend anywhere near what you plan to charge.
For example, if someone is looking for a website and they mentally budget about $500 and your pricing starts at $5,000 then you're 10X more expensive than what your leads are expecting. That means everyone is going to bounce. They're not even going to consider you as an option because you're so far outside of what they are expecting to spend.
Figure out who you're competing against and that will give you the boundaries for the ballpark you're playing in.
Are you front-loading the work without front-loading your income?
A great way to burn yourself out is to force yourself to work for less than you need to survive. It's common for people to think that the biggest barrier to entry for a business owner is the initial up-front cost of their website. So, they offer payment plans.
For example, they'll sell a website for $200/month rather than for $2400 up-front. If you're working on your own or with one or two other people (not a huge agency with strong financial backing) I strongly advise against doing this for two reasons. First, you'll burn out and go out of business before you become profitable. If you don't have investors or a bunch of savings you'll run out of runway before those $200/mo accounts add up to enough to sustain you.
Second, you're not setting yourself up to be able to do your best work. You're going to feel like you have to rush, cut corners, and take shortcuts just so you can get to the next project because you're running out of savings. You are not going to be able to do your best work for your clients. That means your clients won't be getting results and you're not profitable either. Everybody loses.
Will your price point allow you to reach your income goals?
Do the math to see if your prices will allow you to reach your goals. This is one of the first exercises I go through when I'm mentoring the DoubleStackers. Suppose you're marketing is successful and you're generating all the leads you need. Do you have the time and ability to build the number of websites at the price you're charging to hit your income goals?
For example, suppose you want to make $10k/month and you're selling $2500 websites. Can you land, build, and deploy one website per week? In my experience, the answer is no. It usually takes me about a month to build a solid online presence for my clients. They need good design, compelling copy, great photos, email marketing, social media integration, etc. It takes about a month to pull all of that together.
So, take a look at your price points and think about what you'd need to do to attract, land, build, and deploy the number of projects you'd have to complete to hit your income goals. You might find that your prices won't allow you to hit your goals even in an ideal world. Most of the time, the web designers I talk to need to raise their prices (usually pretty significantly) to allow themselves to reach their income goals.
What's the cost of the next best alternative?
This question is similar to the first question about who your competition is, but now we're thinking about market position rather than market value. In other words, are you setting yourself up as an expert who knows how to get results for your clients? Are you an authority or a commodity?
If you're seen as a commodity – someone who is easily replaced by someone else who can basically do the same thing (maybe even for less) you're not going to be able to charge high-ticket rates for your work. Think about other commodities. Suppose you're shopping in the grocery store for some orange juice. You see five different brands of orange juice and they all have the same ingredients – oranges. Four of the brands are selling for $5.00 gallon and one is selling for $500.00 per gallon. Nobody's buying the $500 one when the others are way cheaper and essentially the exact same thing.
On the other hand, suppose you have some rare and potentially fatal medical problem. There are five doctors. Four of the doctors are general practice doctors who charge $100 to see you. But there is one doctor who specializes in exactly what your problem is. She only works with people who have your exact problem. She knows exactly what to do to help you but she charges $10,000. I don't care that she's 100X more expensive, I'm going with the specialist. There is no next best alternative.
What are you placing your value on?
Is the value on the services you provide or is it on the results you generate? The prices you are able to charge depend almost entirely on the answer to this question. If the client thinks your value is in the services you provide then how do you set yourself apart from all the other people who can provide essentially the exact same services? For example, if you provide web design, hosting, and SEO. Why is it worth 10X more to work with you than it is to work with the other guy who also provides web design, hosting, and SEO? Is it worth it to hire you for $10,000 when there are other options for essentially the same thing for only $1,000?
On the other hand, what if you can help someone add an additional $100,000 per year to their revenue? Is it worth investing $10,000 to make $100,000? Of course.
Your Client's Mindset
Now let's shift gears and take a look at this from your client's perspective.
The key to marketing is to get inside your target's mind and offer them what they are looking for.
That means you need to know who your target is and what they're looking for. So let's explore that with these questions.
Are you attracting clients who are looking for a website (or a digital marketing service)?
Ironically, if you are attracting clients who are “looking for a website” they are probably not your ideal clients for a variety of reasons. First, they're usually just looking for one thing. In other words, all they want is a quick, cheap website. They're not looking for copywriting services, sales funnels, email marketing, etc. They only have one thing on their mind and they just want that one thing from you. Your ideal client is the one who hires you for all the stuff you do the best all at the same time.
The truth is the website is just the container for all of your other (more valuable) services. If your marketing is attracting people who just want a “website” then you're going to be fighting the uphill battle of trying to upsell them on all your other stuff. Most clients say no to the upsells.
Do you charge the same rates for all of your different services?
How are you going to price your services? Do you charge the same rate for logo design as you would for building the website? What about for email marketing, or SEO?
Usually the answer is no, and this is a trap web designers fall into because they're trying to reproduce and agency feel in a one-person business. Agencies have “rate cards” for different services. The services that are easier, or less technical are less expensive because the people doing those services don't get paid as much. The big-ticket items are the services that require their senior-level consultants.
When it's just you – and you're doing all of the things – you don't want to be billing yourself out at cheap rates for some services and higher rates for others because you're the one doing all the things. You are the senior consultant and should always be earning the senior consultant rates.
What are your client's pre-existing expectations about price?
If you're marketing your business based on the services you offer, what do your clients think those services cost?
Suppose you need a hair cut and you can't get an appointment with your normal salon. So you find an alternative salon to go to. You might not know exactly what they charge, but you have a pretty good idea. For example, a men's haircut is going to be about $25. Maybe a little more or a little less, but you are not expecting it to be $250, right? If you walked into the salon and saw a sign for $250 haircuts, you'd probably turn around and walk right back out because the prices are wildly outside of your expectations.
So, what do you think your clients are thinking your rates are going to be?
Does your client already know what they want?
Who is holding the vision? Are you attracting clients who have a great business idea and they just need some technical help bringing that idea online?
The difference between high-ticket and low-ticket web design comes down to who holds the path to success. In other words, who is leading the project?
If your client is leading the project and telling you what they need then you're going to be seen as just the means to an end; a commodity easily replaced. On the other hand, if your client is attracted to you because of YOU then you're in the role of a high-ticket consultant.
Here's another way to look at it. Do your clients know their solution or do they know their problem?
Clients who feel like they already know the solution are just looking for technical help manifesting that solution. That means they just want your technical skills. With so many low-cost alternatives for technical skills, it's very difficult to charge the rates you need to hit your income goals.
Clients who are attracted to your solution because they understand their problem are going to see you as the specialist – the expert with the authority to solve their problems even if (especially if) they don't know how to fix their problem on their own.
How does lowering your price impact your client's mindset?
Suppose you meet with your client and then write up a proposal for what you think they need, then they say it's too expensive. They like you and want to work with you so they ask if there's anything you can do to make things more financially within reach. Are you going to lower your price? If so, how?
Are you willing to just make less money on the project? Do all the same stuff, just charge less?
Or, are you going to reduce the scope and start taking stuff out of the project?
What is that going to do to your client's mindset? If you just do the same stuff for less are they going to think you weren't being honest about the price in the first place? If you start reducing the scope of the project are they still going to be able to get the same results? By reducing the scope of the project, are you also reducing their chances of success?
A New Approach To High-Ticket Web Design
Now that we've gone through the exercise of considering these 10 questions about web design pricing we've discovered some important concepts about pricing strategies.
- Defining your web design business by the technical services you provide leaves you stuck with low-budget pricing competing against vast communities of inexpensive web designers and low-cost solutions for websites.
- You won't find your ideal clients by attracting leads who are “looking for a website.”
- You want clients who know their problem and see you as their solution.
- High-ticket web design includes business development leadership and technical skills – the tech stack AND the business development stack (i.e. DoubleStack).
- The way you present your pricing has a direct impact on your client's perception of their likelihood of success.
Are you ready to raise your rates?
If you're ready to start raising your rates and generating the income your capable of earning then let's talk. But there are a couple of requirements:
- You don't have to code, but you have to be able to build a professional quality website
- You have to be open to doing both technical development and business consulting for your clients
If that sounds like you, then schedule a call so we can get you out there generating the impact you're capable of making while earning the income you're really worth.
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