If you've ever bought a car, you've been through the rundown. The dealer pushes costly add-ons and you spend at least 45 minutes haggling. It's confusing to understand what you're paying for, and what you need to pay for, versus what the dealership thinks you should.
When it comes to website design, it can feel similar.
It's not always clear what agencies and freelancers include in a site design proposal. As a result, you could end up paying for a lot of things you really didn't need. This leads to waste, overspending, and blowing up your budget. However, if you understand the pricing styles most agencies and freelancers use, you'll be more prepared to bargain for the best deal. Armed with this knowledge, you'll be in a position of strength, you'll know what you should pay for, what you are actually buying, and how much it should cost.
In short, you'll be in control of the conversation, not the agency.
How To Understand Website Design Pricing
The first decision you should make is which COS (Content Optimization System) or CMS (Content Management System) you want to use. There are benefits to each type of platform (our favorite comparison is WordPress vs. HubSpot.) A content optimization system provides more guidance and reporting and is an all-in-one solution for marketing, while you use a content management system to draft and publish website content.
From there, you need to figure out who will create the strategy for your site and build it. By that point, you will have a budget in mind and can assess which type of website design pricing fits your wants and needs.
DIY And Pay-As-You-Go Pricing
While this may seem like the best deal because it's cheap up front, DIY and pay-as-you-go solutions cost you more time, energy, and resources. You start easily enough with Wix, Squarespace, WordPress for free, but rack up costs by paying for freelancers, plug-ins, custom coding, and tools as you need them.
In the long-term, these systems (we call them FrankenSpots) will force you to learn on the job, distracting yourself from other initiatives, and spend more time fixing things and running back and forth between tools. As a result, you can miss a lot of critical insights that more robust, comprehensive tools offer and prolong growth.
With fixed pricing, you're likely working with an agency. Your site comes with a price tag, and all of the COS decisions, website process, and required tools are known ahead of time. For many, this is ideal to get project approval from your CFO, since there are no surprise costs. However, again in the long-term, a fixed-price project does not consider your specific needs.
Often, this creates waste and rigid constraints. It relies solely upon guesswork to assume the right solution at the right price. Agencies know this, so they always charge too much. At the end of it, you may not get the website you need this way and spend more.
Whether you work with an agency or a freelancer, hourly pricing will always cost you more. While quality may increase with hourly, and you will probably keep a better eye on the finances, it will be difficult to keep the focus on the bigger picture. You will need to run every expense through your CFO and miss out on implementing things that matter.
In our observation, hourly rate projects tend to take longer to complete and involve a lot more problems for the customer than fixed price projects. Hourly rate projects also leave the customer vulnerable to quality issues, scope issues, “developer flight,” and sometimes, complete project failure.
Value billing is a bit of a twist on fixed-price billing. Rather than create a fixed-price estimate based on the work required to complete a project, these agencies base price on what they think the job is worth to the client. Agencies use this often, and it's great for them, but it can be costly for you. Because agencies who choose value billing over fixed-price, or hourly arrangements, tend to charge their clients significantly higher prices.
Value billing agencies capture more of the “value” they produce, costing their clients quite a bit more compared to the other pricing methods.
We use this method because it provides the best of both worlds to each party. We split each website design objective into small, prioritized projects, making each one as small and lean as possible. There's more context about what you're paying for upfront. You then set a monthly “velocity," or a monthly spend that you are comfortable with; which can be between $2,000 and $20,000 a month.
We use an NTE (not to exceed) cost to keep us on budget. Then, if we fail to deliver excellent value, you do not pay us.
Selecting The Right Website Design Pricing
When it comes to website design pricing, you typically choose between meeting your deadline and fitting your project into the allotted hours, or sticking to your quoted cost. Often, your website goals and initiatives decrease in priority because of your focus and attention on budget and timeline. Regardless of which pricing option you select, for a website that drives results, you need an exceptional CMS or COS that fits the needs of your organization.
For the best results, you should also work with a great partner. With the right partner in place, you can get a consistent website and inbound marketing support, putting you in the best position to achieve long-term growth. To understand more about how partners bill you for website design services, check out our Price Wars Guide.