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  1. #1
    Join Date
    Feb 2002
    Posts
    80

    What should I charge?

    I am running a marketing company and part of our services is to offer web
    design. My question is this how do you price large clients? I have the
    opportunity to do a site for a large retail chain store. Besides the
    hosting costs going up due to increased traffic, how much more would I
    charge them for the actual design.

    Their needs are no different that any of our past customers. I know a couple
    of different web design companies that just do a 2 or 3 sites a year and
    have a huge staff. They deal with high end big companies.

    I have 2 programmers and 2 designers and I usually charge $2700 CAN for a
    static site and around $5500 CAN for a E-commerce site more if they want
    more pages or features.

    I have a feeling that I will be thrown out if I pitch a site to them for
    $2700. I feel this is because price is reflective of quality so they now
    want me to give them pricing and I don't know what to tell them. Should I
    find out their advertising budget and charge them a percentage of that?


    What should I charge? How do the big Guys do it?

  2. #2
    Join Date
    Jun 2002
    Posts
    61
    I did a lot of reading on web designing and how to charge the customer.

    They always say to break the project into portions when possible, and include a complete description of what the customer wants, and break it down into labour hours if possible.

    Otherwise, you'll find the customer will try to sneak in extra work or make critical design changes in the middle of the project, and if you tell them it will cost more, the customer might get upset and refuse to pay etc.

    Also try to get payment each major step of the way to avoid finishing the entire project and then trying to get the customer to pay promptly.

  3. #3
    Join Date
    Aug 2000
    Location
    NYC
    Posts
    6,627
    Originally posted by rtsit
    They always say to break the project into portions when possible, and include a complete description of what the customer wants, and break it down into labour hours if possible.
    I would really recommend against that. Certainly you want to know yourself how long you expect things to take, who is going to do each task (since genevaroth said there are 4 people on the staff), how much you'll pay each and so how much it will cost your company... but avoid giving the client those details; otherwise you'll likely have a client questioning why a particular task needs to take as long as it does or why this "cheaper" staffer can't do the more expensive task, etc. The last thing you want is to have to account for each hour or minute you spend on the job.

    The best way to deal with the large project: put together a complete proposal, in which you include a very broad pricing estimate stating that you'll need more details to get more accurate. Before going any farther, execute an agreement (we call ours a "Memorandum of Engagement") that lays out the basics of the relationship and an hourly rate to be used during the "discovery" period -- the period in which you study their practices and needs and develop the site plan.

    After that, present a complete contract and final pricing, along with job documentations such as a technical brief and a production guide. Those documents protect you from scope creep, essentially the client continuing to add new functionality as the project continues. The final pricing will include a credit for anything completed under the Memorandum's guidelines, which if you've pulled things off well has already been paid.

    Without a doubt, relatively few website projects these days are managed this way... but if you're wondering how "companies that just do a 2 or 3 sites a year and have a huge staff" approach the task, many use a variant of this approach.

    And if you're going to be selling top-end services at top-end prices it's essential that you come off as more professional and more well organized than most other companies (well, it's essential that you be that professional). Big corporations like retail store chains aren't comfortable with dealing with sloppy arrangements and word-of-mouth agreements.

    Will you be thrown out if you pitch them at $2700? Who knows? Do you need $2700 to turn a reasonable profit at the job? If not, don't charge that much. If so, what do you have to lose? If they'd only pay less than that, you'd lose money doing the job -- so why would you want it?
    Specializing in SEO and PPC management.

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