1 00:00:00,000 --> 00:00:04,400 [How to Run a Web Design Business with Paul Boag: Sales and Pitching: Deep Dive] 2 00:00:04,510 --> 00:00:10,730 So now we come to the subject of sales and pricing and all of that kind of nastiness. 3 00:00:10,730 --> 00:00:15,060 I don't know whether it's a British thing, we hate talking about pricing. 4 00:00:15,060 --> 00:00:18,850 It's embarrassing talking about money but we need to do it. 5 00:00:18,850 --> 00:00:22,000 It's a part of the job and we will need to face it. 6 00:00:22,740 --> 00:00:25,230 The first thing you need to work out is 7 00:00:25,230 --> 00:00:27,680 how you're going to go about charging your clients. 8 00:00:27,700 --> 00:00:32,080 Are you going to be fixed price or are you going to go time and materials? 9 00:00:32,080 --> 00:00:36,020 Now let's face it we do love to be time and materials. Didn't we? 10 00:00:36,020 --> 00:00:40,560 It is much easier to manage and you get a much, 11 00:00:40,560 --> 00:00:43,870 well, you get paid for the work you do basically. 12 00:00:44,560 --> 00:00:48,100 But, a lot of clients are going to be nervous about time and materials. 13 00:00:48,100 --> 00:00:53,680 For them, there are no limits. The project could cost millions for all they know. 14 00:00:53,680 --> 00:00:57,380 And it requires a lot of trust before you get to that point. 15 00:00:57,380 --> 00:01:01,900 Time and materials does work but it works better with regular clients 16 00:01:02,050 --> 00:01:04,400 that you built good working relationship with 17 00:01:04,840 --> 00:01:07,100 and it's great for smaller pieces of work. 18 00:01:07,230 --> 00:01:12,570 Time and materials should always be associated with a rough estimate 19 00:01:12,570 --> 00:01:16,340 just to give the clients some sense of security, 20 00:01:16,340 --> 00:01:20,500 some sense that they know how big this project is going to be. 21 00:01:21,070 --> 00:01:23,180 If you do go down the time and material route, 22 00:01:23,180 --> 00:01:26,080 make sure you won the client well before 23 00:01:26,080 --> 00:01:28,910 you reached that estimate that you've given them. 24 00:01:28,920 --> 00:01:31,070 If you think it's going to pass the estimate, 25 00:01:31,070 --> 00:01:35,810 if you got any doubts at all, make sure you talk to the client. 26 00:01:35,810 --> 00:01:38,100 They really don't like surprises. 27 00:01:38,770 --> 00:01:41,970 But in most cases, fixed price is the way to go 28 00:01:41,970 --> 00:01:44,690 especially when dealing with new clients. 29 00:01:45,150 --> 00:01:49,800 But that does mean you need to add contingency to cover those eventualities 30 00:01:49,800 --> 00:01:53,470 that you haven't considered and make sure you do add those in 31 00:01:53,470 --> 00:01:56,440 because it can come back and bite you if you don't. 32 00:01:56,440 --> 00:02:01,750 The other important thing to remember when it comes to using fixed price pricing 33 00:02:01,750 --> 00:02:06,590 is to make sure that you don't forget the add on project management time 34 00:02:06,590 --> 00:02:09,680 because that takes a lot more time than you think. 35 00:02:10,680 --> 00:02:14,710 Another really important thing to talk about when it comes to pricing 36 00:02:14,710 --> 00:02:20,310 and I admit this is not easy that you need to talk to the client about budget. 37 00:02:20,970 --> 00:02:22,590 How much have they got to spend? 38 00:02:23,010 --> 00:02:26,970 This is a really important question and a lot of clients, 39 00:02:26,970 --> 00:02:29,300 they really like talking about money. 40 00:02:29,300 --> 00:02:34,250 They've got this feeling that if they say to you they've got $30,000 to spend, 41 00:02:34,250 --> 00:02:38,700 then inevitably the project is going to cost $30,000 42 00:02:38,700 --> 00:02:41,820 even if there's actually only $5,000 worth of work. 43 00:02:41,820 --> 00:02:45,950 There's a lack of trust there. But, you really need to know. Don't you? 44 00:02:45,950 --> 00:02:49,350 You need to know how much you've got to work with. 45 00:02:50,490 --> 00:02:52,270 I used an analogy. 46 00:02:52,270 --> 00:02:57,280 I talked about houses and I asked the client, how much does a house cost? 47 00:02:57,410 --> 00:03:01,320 And inevitably the client has to say--well, it depends. 48 00:03:01,320 --> 00:03:05,430 It depends on how many bedrooms there are, it depends n where the house is, 49 00:03:05,430 --> 00:03:07,840 it depends on the market at the time. 50 00:03:08,500 --> 00:03:11,850 There were so many factors involved in buying a house 51 00:03:11,850 --> 00:03:13,690 and how much a house costs. 52 00:03:14,080 --> 00:03:16,310 The same is true with web design. 53 00:03:16,310 --> 00:03:20,480 For website, it depends on the technology that you're using, 54 00:03:20,480 --> 00:03:23,720 the functionality that's required, the amount of time that's dedicated, 55 00:03:23,720 --> 00:03:26,950 design or usability testing or whatever else. 56 00:03:26,950 --> 00:03:31,240 Basically, a website can cost as much as you're willing to spend on it. 57 00:03:32,240 --> 00:03:34,840 Now, a lot of clients will get it at that point. 58 00:03:34,840 --> 00:03:37,470 When you explained it like that, they will understand, 59 00:03:37,470 --> 00:03:42,330 but there are always some clients, there are always those that refused, 60 00:03:42,490 --> 00:03:47,570 that will not give you even a vague idea of what they're budget is. 61 00:03:47,570 --> 00:03:54,140 In such cases, the thing to do is give them a rough estimate, a range 62 00:03:54,140 --> 00:03:56,630 that their website is likely to cost. 63 00:03:56,630 --> 00:04:00,060 If that scares them off because it cost too much, 64 00:04:00,060 --> 00:04:03,060 then you're better off finding out then before you go to 65 00:04:03,060 --> 00:04:06,330 the effort of pitching for the work properly. 66 00:04:07,290 --> 00:04:10,060 When you do produce your final pricing, 67 00:04:10,060 --> 00:04:14,290 make sure you break that pricing down into modular chunks. 68 00:04:14,790 --> 00:04:17,230 Think of it in terms of core functionality 69 00:04:17,230 --> 00:04:20,440 that has to be on the website and optional items. 70 00:04:20,700 --> 00:04:23,870 So make sure that every item of functionality 71 00:04:23,870 --> 00:04:26,110 on the website is priced individually. 72 00:04:26,300 --> 00:04:31,420 This means that if your budget goes beyond what they are expecting, 73 00:04:31,910 --> 00:04:34,040 then they can go through and remove items 74 00:04:34,040 --> 00:04:37,050 or they can say that item was nice to have, 75 00:04:37,050 --> 00:04:40,470 but at that price, we can't afford it or we can't justify it. 76 00:04:40,560 --> 00:04:43,670 Break your pricing down wherever possible. 77 00:04:43,670 --> 00:04:49,240 Also, if there's ongoing costs, make sure to clearly identify that from. 78 00:04:49,240 --> 00:04:52,210 Things like hosting the main names or indeed 79 00:04:52,210 --> 00:04:55,290 anything else that's going to reoccur overtime. 80 00:04:55,290 --> 00:05:00,360 Clients kind of expect those things to be in a proposal and if they're not, 81 00:05:00,360 --> 00:05:04,720 then they become suspicious and wonder why there are now ongoing costs. 82 00:05:04,720 --> 00:05:10,570 The damage is the relationship and the last thing clients just despise 83 00:05:10,570 --> 00:05:15,550 the last thing that they want as prices so avoid those at all costs. 84 00:05:16,550 --> 00:05:19,700 So what is the secret here when it comes to pricing? 85 00:05:19,700 --> 00:05:23,620 The secret is a simple one. It's all about honesty. 86 00:05:23,620 --> 00:05:27,650 It's being upfront and talking about subjects that maybe 87 00:05:27,650 --> 00:05:31,210 a lot of us would prefer not to talk about.