Comparing Apples to Oranges

Posted July 20, 2009 @ 9:52 AM, by Marc, in Business, BWS, Client — 18

Basic line-graph showing an increase in project inquiries and those that should be declined, over time

As Boston Web Studio gains more traffic, more attention, and more referrals, the amount of project inquiries I receive increases proportionately. At the same time, and because of math and all of its wondrous properties, the amount of inquiries that I should politely decline increases as well.

While there are numerous reasons any given project should be declined, the one that’s been on my mind lately is that of being compared to another agency whose estimate is much lower than mine for the same work. As I’ll point out below, the term ‘same work’ is ambiguous and rarely means what it implies.

How It Came To Mind

I was invited to discuss two projects with two separate clients, each of whom needed a new website for their company. After such an invitation is received and we’ve decided when and where to meet, the initial process that follows is one I assume to be common and familiar:

Meet the client, shake hands, and start discussing the project. Similar to a first-date, this is when each party determines whether or not the other appears to be a good fit based on appearances, attitudes, and general first impressions.
While at that first meeting, I ask quite a few questions to determine the client’s goals for the new website. Questions such as:
- Who is the current audience?
- Who is the desired audience?
- What actions do you want the current, or desired, audience to make on the new site?
- What hurdles are there to overcome?
- What materials and information currently exists?
- and so on
After the meeting, I’ll spend time researching a bunch of things:
- The client’s competition
- The client’s current and desired audience
- The client’s existing materials and information
- The client’s analytics/traffic data, if any
- The client’s hosting environment
- Requirements to support the future site
- and so on
Next up, I’ll ask the client a lot of follow-up questions that have come to light as a result of the research done in step #3
I’ll then wait for the answers, which can come days, weeks, or even months later
Steps #4 and #5 are repeated until I feel very comfortable with all of the information available to me—that it’s enough to accurately determine the amount of hours I’ll need to complete the project as understood by both parties, and that there are no unanswered questions remaining
Finally, I’ll provide the client with an estimate and answer any questions it may bring up. Then, if they approve the estimate, I'll deliver an official contract accompanied by a request for a deposit

In each of the two occasions—and generally in all project inquiries I receive—I had a price-range in mind once the client and I reached the conclusion of step #5. When I have that first round of answers from a client, I tend to know that the project will cost between $A and $C. It could be $A, $B, or $C, but I at least know what the range will be. Only when step #6 is complete can I then determine what my estimated price will be.

A Quick Side-note

The length of time that passes between steps #1 and #7 can vary immensely from project to project. For example, small projects with clients who judiciously reply to emails, return phone calls quickly, and have immediate answers to my many questions will often see this process completed in a week or two. Conversely, if the project is large and the client is being pulled in 20 different directions by their many daily responsibilities, this process can last months. Predicting, managing, scheduling, and working around these varying lengths of time is another challenge—and blog entry—in and of itself.

Beaten to the Punch

On both occasions, the rate at which time passed while working through the seven steps was average; I was getting information and answers quickly enough and progress was being made. Yet, to my surprise, each client informed me that they had also recently met with, and already received an estimate from, another agency.

What?

I expect clients to shop around. It’s the smart thing to do and I’d be lying if I said I didn’t do it for just about everything I buy. What shocked me was how quickly the other agency provided their estimate to the client. In one case it was about a week later, and in the other case it was only four days later. On both occasions, when the client mentioned this, I was still somewhere around steps #5 and #6.

So, I’m Too Slow?

Each time, I became a bit nosey and asked the client how much interaction they had with the other agency since having their first meeting together. Both times, the answer was “None.” There were no follow-up questions or interactions between the other agency and the client after their first meeting together.

Ah, now it makes sense; I’m not too slow. Instead, I’m the one who’s asking important follow-up questions, and those take time.

And, I’m Too Expensive?

Not incredibly surprising: the estimated price the other agency provided was far less than the price-range I had in mind at the time. (Remember, I was still around steps #5 and #6, so an exact number hadn’t yet been determined). Even the low end of my price-range was quite a bit higher than what the client had been given from the other agency.

On both occasions, I asked the client if they’d mind sharing the name of the other agency with me and, fortunately, they both saw no reason not to. So I did what any curious business-person would do and I looked at the other agency’s website, their portfolio, and their online persona by searching for them in Google.

Nearly everything I found was sub-par, in my opinion anyway. I discovered old and invalid code, old designs in their portfolio that reminded me of they way websites looked in 2001, little-to-no pride shown in their work, nonexistent examples of life outside of their own website, etc.

So, it’s not that I’m too expensive, but that the other agencies did poor work, they weren’t very up-to-date on current trends, and they charged accordingly for this lack of quality.

What Did I Do?

On both occasions, I explained to the client that they weren’t comparing ‘apple to apples,’ as they say. I said that the work I would do for them was far better than any of the examples presented by the other agency. I then described the benefits of the work I’d do for them:

A more modern and appealing design
Cleaner, easier to maintain code
Increased accessibility and a wider audience as a result
Better cross-browser consistency
Better results with the search engines

I confidently stated that, yes, working with Boston Web Studio was going to cost more than working with the other agency, but in the end, they were going to receive a higher-quality product from BWS. It’s a simple case of you get what you pay for.

What Happened?

With regard to the first occasion, I didn’t receive the project because the client opted to go with the lower-priced estimate. With regard to the second occasion, the ‘apples to oranges’ comparison happened only a few days ago and I haven’t yet received their response. I don’t know if they intend to shop by price, or by quality, but I’m sure I’ll find out in the coming days.

Added July 23^rd, 2009: The client referred to in the second occasion has chosen to work with me/Boston Web Studio.

The Point I’m Trying To Make

Any agency that obtains a majority of its work as a result of offering the lowest price will rarely make anything impressive, interesting, and worthwhile. Such an agency is either bad at what they do and are content creating sub-par work, or they’re quite good at what they do and really need the confidence to increase their rate and earn an amount that’s fair.

Whether you’re a web designer, a writer, a landscaper, or a professional dog-walker, there’s going to be somebody out there who does what you do for less money than you do it for. Most of the time, however, they’re not doing exactly what you do; they’re doing something similar, but the end-result of their efforts won’t be as good as the end-result of your efforts.

If you are great at what you do and you charge a fair price to do it, you should not lower your rate just to get a project. Not even when business is slow for a short period, because it can devalue you and your company for a far greater length of time. Additionally, my experience has taught me that when you are involved in a project that was accepted solely based on price, the low and unfair income you’re going to receive will not be the only upsetting part of the project that you’ll have to deal with.

Briefly ponder this: A large amount of people buy their coffee from Starbucks rather than Dunkin’ Donuts despite the higher price. Why? Because the quality of the product, the in-store experience, and a person’s overall satisfaction is higher at Starbucks. Those people are happy to pay more in order to receive more. The same can be said for many well-known brands (think of Apple, BMW, Moleskine, etc.) Sure, their products cost more than other products in the same category, but they’re better products and a lot of people understand the value in having a better product.

So, When It Happens Again

The next time a client informs me that the services I’m offering to them are being compared to another agency who is offering similar services for less money, I will delicately ask them to be certain that they’re comparing ‘apples to apples.’ If the client will in fact receive a comparable high-quality service and a great experience for less money than I’m asking for, I’ll honestly tell them that they shouldn’t pass up such a great deal.

Comments

Excellent points, Marc. While this effect - you get what you pay for - can be seen everywhere in retail as well as service based businesses, it seems particularly acute in the Web industry. The barrier to entry in this business is so low that there are plenty of so-called “web developers” willing to slap together work quick, cheap and sloppy.

As for clients willing to hire them based solely on the fact that they gave the lowest quote, many times those clients aren’t the sort of clients worth having in my experience. I find they tend to be demanding and nickel and dime you for everything. They’re not the types to care much about things like web standards, clean markup and how thoughtful design can reflect positively on them.

The best match of client and vendor happens not only when one can satisfy the other’s needs, but when both parties care equally about the end result.

Michael Bester July 20, 2009 @ 10:48 AM
This reminds me of the article that ran recently on Smashing Mag. (http://tinyurl.com/lgn247) The example they give of price-to-inquiry change of the wedding photographer was what really caught my attention.

I think most people “get it” as far as “you get what you pay for”, but only if they actually care about keeping their image or brand current—I think those are the types of clients you would want anyway.

Let’s face it, “my friend’s-sisters’-best friend’s-cousin-Jimmy-who-is-good-with-computers” will always have lower prices and he’ll make your site scroll and blink your users into epileptic shock. AWESOME.

Andrew Choy July 20, 2009 @ 10:57 AM
Thank you for pointing this out, Marc.

Last week I was given any opportunity to provide a proposal and estimate on a European company’s website redesign.
I didn’t hide the fact that I would need to subcontract out portions of the work, and that I would only work with outstanding people. Good developers aren’t cheap. The client is someone I know well, which made it even more awkward for him to tell me that my quote was surprisingly high (according to his boss) and that he would have to get an estimate from another company for comparison. Funnily enough, he also told me he does not know how to make sure he is comparing apples with apples!

Perhaps they were comparing my estimate against their recent redesign, which will never see the light of day because it’s just terrible, and they know it?

So, I’m still waiting to hear the verdict, but I still stand by the quality of my work. Perhaps it just wasn’t meant to be.

Lisa Rex July 20, 2009 @ 11:54 AM
You make some excellent points, sir. And I believe that any freelancer or small company should stay away from clients that don’t understand the difference between quality web work and inexpensive web work. If you’re not respected enough by a client to be paid what you’re worth, you’ll probably be disrespected in other ways throughout the project.

That said, what’s your take on freelancers or small studios that are just starting out on their own and need to build a reputation in the first place? It’s difficult to get new work if you haven’t done much already, unless of course your rates are lower than you’d like them to be. Is it really selling yourself short if you’re trying to work your way up the ladder? And if you start your business with rates lower than your competition, are you hurting the small web businesses out there or just trying to get your foot in the door?

Things that keep me awake at night…

Patrick Haney July 20, 2009 @ 12:19 PM
It’s sort of weird. We had some people out this weekend to give us estimates on redoing the windows in our house. The whole time that the guy sat and gave me his spiel I couldn’t help but think, “so what’s this gonna run me?”

He even gave me the run down of how the lowest price isn’t always the best bet.

What I’m saying is, being on both sides of the coin leaves you with totally different feelings here. Ultimately, you want the highest quality product that you can afford at the lowest price possible.

Good article, I just hate how easy it is to think about the money of it all.

Fred July 20, 2009 @ 2:57 PM
The article places blame on a client for not getting their facts right and making an uninformed desicion, I think more work can be done by an agency at the start to educate a client

Some clients are unaware of the subtle nuances of valid and invalid code and other areas that determine good from bad web development and it can sound as though you are trying to justify higher prices by using confusing jargon.

Web design has got a reputation for being an industry full of cowboys, with a mindset that you are trying to take them for as much as you can people opt for the cheapest - the same feeling I get everytime I take my car into a garage.

David July 21, 2009 @ 12:18 AM
I have to agree with David on a point he makes. While I absolutely understand the benefits of clean, 100% validated code, most clients (I’ve found) do not. They ask if the web page will be usable in the three major browsers, and that’s all they care about. Trying to convince them otherwise either makes me sound elitist, or makes them feel as though they’re paying for something that really doesn’t matter to them.

In the end, the code for the sites I create isn’t always adored by W3C, but it looks great in whatever browser they use.

If you have enough demand for business where you can only work with the clients who do care enough about the details like that, and will pay for it, then that’s great. But a lot of people (and businesses) have to find somewhere to cut corners, especially in this economy, and something which in the end honestly has little to no impact to their business is an easy place to do so.

Andrew J July 21, 2009 @ 5:08 AM
Great article, Marc. A delicate situation, it seems. I really like the “hiring” process you’ve laid out.

@David, you’re absolutely right. Hard for us to do both, especially when we’re often looked at like thieving auto mechanics.

@Patrick, my answer to the “just starting out” question is simple: give stuff away. Obviously, it takes some reserve capital or a day job, but I’ve found that working—for free—for trusted, appreciative, respectful (and respectable) organizations can build very strong relationships and networking ties, while building a portfolio too.

TJ Kelly July 21, 2009 @ 6:27 AM
Recently my partners and I made our way to a small business in Somerville that was in dire need of a site redesign. We visited their office and had a really great long conversation. We heard from them that they wanted to embrace their community and, more importantly, to convey to their customers that their service is superior to the shop around the corner that would probably undercut them. “People need to understand that there are faces and reputations behind the final product”. YES! WE UNDERSTAND!

I’m sure anyone can guess where this is going - we put forth an estimate based on our rates and calculated time, and even added in the option of trade in services to make things a little more affordable. In the end they said we were too expensive (by about 50%, I think) and went with some other chew-em-up-and-spit-em-out shop.

The problem in our business right now is that so many people *just don’t know* how to measure the quality of our services. The comparisons I’ve helped potential clients make between what WE give them and what THEY give them will usually fly a few feet over their heads. They don’t get it. “Why is this better than the other? They both look nice to me!”
This topic, and the resulting discussion, to be perfectly honest - makes me feel a little ill. In the midst of a recession this situation occurs more often than not and we’re all experiencing it at a more regular rate. The important thing is that we all maintain the course and hold on.

Joel July 21, 2009 @ 7:52 AM
I have to agree that the end result is what most people care about. How the website actually looks is what matters, not the style of the code or tools used to create a project. It should only matter to developers, making their life easier in this job. For majority of people websites are simply a medium to grab important information from.

Take for example this website (BWS). To majority of visitors it would absolutely make no difference if it was coded using tables or css for the layout. The look and feel would be identical, and that is what matters to the visitors and potential customers.

When I purchase desktop software, I do not look at what technologies were used to develop it. If it does what is expected, and makes my job easier, I can say that the purchase was well worth. Did the developer used proper development practices and technologies is simply something I do not care about.

Zeljko July 21, 2009 @ 1:24 PM
I agree that it is important not to undervalue your services and sell your services for too little. In fact, I am dealing with the repercussions of doing that myself.

However, I think your post misses the mark a bit. Unless you are doing web applications, your average customer does not give a rats ass about “valid code” and frankly, I’m not sure it’s worth much these days. Your code should be valid, yes but it’s not a selling point. It’s more like a given.

I think what customers want these days is ROI. More and more customers are coming to me because they want to get business (new customers) from the web, not because they need a website.

What it takes to sell a website engagement and what it takes to build a “good quality website” are very different things and should probably be done by different people or different departments to avoid these issues (until after the sale).

Ben July 21, 2009 @ 1:35 PM
p.s. your customers are measuring the value of your service by the number of $ signs it brings to their business.

Not for the pleasure of valid code.

ben July 21, 2009 @ 1:39 PM
Ben - I don’t think it’s JUST the code that Marc’s talking about. He mentions the lack of aesthetic value in his competitors’ “products”. These places essentially end up vomiting out a piece of crap that will NOT return on their investment. In the end it’s a complete waste of time and effort to just go through the motions. Why bother at that point?

What I tell my clients is this - if you miss out on that customer (or more) because your competitors’ websites hold their eye better than yours, then they will not be the first, and will not be the last. In this day and age - if you’re sleeping on your company’s internet presence then you’re sleeping on the extra money that will be made. Plain and simple - you get what you pay for.

Joel July 21, 2009 @ 2:44 PM
@Joel How exactly will more beautiful website generate more sales for some small business? Is there actual data to back that up, or simply a made up fantasy of web designers?

Zeljko July 21, 2009 @ 5:43 PM
Oh Zeljko - you’re such a cuddly character. If you’re asking me to stick my hand in the magic data bucket and pull out some study or bar chart backing up my claims, then I can’t help you. If that’s the bar by which we decide who “wins” this - then I concede. You “win”. The only “data” I have is the 500% spike in sales for a client after their site redesign. Does that work?

Beauty is in the eye of the beholder but I’m prrreeettty sure the better designed and more usable solution will prove on the ROI front.

Let me buy you a beer in a few months to tell you how sales are going for my current client’s site, post-launch.

Joel July 22, 2009 @ 7:33 AM
@Michael: Very well-stated Michael—I couldn’t agree more.

@Andrew Choy: I think every client certainly wants to keep their image or brand current, but, as mentioned in some of the other comments, there’s the dual issue of them not understanding what is and is not “current” in website design and they may also not see the value and benefits provided with better code. All of that, while looking at what they consider to be a “very expensive” estimate, results in a very hard sell on your/our better products and services. Again, though, these are probably clients you’d politely decline working with.

@Lisa: It’s becoming more and more apparent that this is an issue many of us face, and that it’s not easy to translate what we know to be true to a client who’s main, or only, focus is the price.

@Patrick: You’re right; anybody who’s just starting out won’t necessarily be in a position to do what I’m describing in this blog entry. It’s something that is certainly easier to do once you’ve got some time and projects under your belt. Here’s what I did a few years back, when I was just breaking into the industry: 1) I definitely offered a low-rate for all work that I did. It wasn’t a discounted rate, per-say, instead I charged a very low rate to begin with—I believe I was charging around $30/hour at the time. 2) I actually pushed hard to work along-side other agencies for a period of time, at a rate that ensured they continued to make a profit, albeit smaller, from the work I was doing for them. I helped them lighten their work-load and I got to put some respectable projects in my portfolio. In fact, working along-side other agencies is something I still do, to this day, but I do require my standard rate.

@Fred: A good point, for sure. While there’s a respectable difference in ROI potential when comparing a client’s website to windows in a home, I can totally see where you’re coming from: regardless of the product, being on the other side of the coin changes what one might consider to be valuable.

@David: Thanks for your comment. While I can’t speak for all folks who might have the same concerns as me, I can tell you that I do a healthy amount of education during the first meeting or two. It’s probably why this issue doesn’t come up that often, but only three or four times in the past few years, two of them being in the past couple of months. You’re right, education would (and seems to, in my case) reduce just how often this price-comparison between ‘apples and oranges’ happens overall.

@Andrew J: I don’t agree with you when you write “and something which in the end honestly has little to no impact to their business,” but I appreciate you taking the time to comment.

@TJ: Many thanks, sir!

@Joel: Fortunately there are some tools out there that can assist by providing measurable data on some of the benefits of higher-quality markup, design, content, etc. HubSpot’s Website Grader (http://www.websitegrader.com/) comes to mind. Also, your last two sentences are superb.

@Zeljko: I did talk about the appearance of a website being a huge factor and a major difference between my work and the other two agencies’ work. While there’s a certain degree of unfortunate truth to your statement about many clients not caring about the underlying code, there are many many other clients who do care about it, and they appreciate the inherent benefits, especially after you’ve educated them about said benefits.

@all others: Many many thanks for the time you spent to both read this blog-entry and comment on it with your thoughts, opinions, advice, etc. You all rock my world.

Marc July 22, 2009 @ 9:54 AM
Some of the problem lies in #5. In my experience, the website design/redesign is often the tail wagging the dog. Questions such as yours force potential clients to think more deeply than they ever have about customers/services/work processes and the role the website serves in the business. A small business survives on growth - often by seat-of-the-pants. There’s no time and/or expertise to think through the issues that your questions raise. It comes as a shock to discover that they will have to do some work on the website as well (and that’s before they have to provide the content!)

The timing of a quick quote along with the lower price can relieve a client of the mental pain of having to think through the business plan. It can make the quote provider look not only cheaper but also more technically competent because they didn’t have to ask a lot of questions.

Some clients just want a website and neither believe nor care that it will have any more impact on their business than a Yellow Pages ad might have. You’re not selling what they want anyway.

A website coded to web standards, with a modern design, a concern for future maintainability and search engine rankings means you are offering marketing and business planning consulting as part of a total package.

We’re still in the early days of the web’s role in business. Most of us think of ourselves as techies and try to sell our technical expertise or our web standards professionalism to our clients as if our clients should know or care about them. We need to expand our vision of what we do. We need to make the case to potential clients that our “apple” quote is for appropriate web-based products and services that will enable them to grow their business.

My question is: do we have a responsibility to the client after the website is launched?

Jeanne July 23, 2009 @ 7:22 AM
Wonderful. Well thought through post, Marc.

As I’m reading this, I’m reminded of a post by Andy Rutledge regarding building a brand. His main point is that if you don’t turn down projects, you don’t have a brand. I would say, even if you do take on all the projects that come your way, you still have a brand, albeit a poor one.

http://www.andyrutledge.com/of-brands-and-commodities.php

Jeanne says “You’re not selling what they want anyways.” and that’s true in some cases. I’d like to point out a post by Dustin Curtis, wherein he talks about how the people at the top, making the decisions, need to have an understanding of quality, taste, and the importance of a good experience. Unless you can get those people to care, you’re fighting an uphill battle.

http://dustincurtis.com/the_filter.html

Very good stuff. Thanks for sharing.

Jason Robb July 26, 2009 @ 9:27 AM