In our previous blog, we talked about the ways in which you can charge or pay for a website. Designing a customized website is not a cake walk; and when you can’t explain to your clients what are you charging them for, it becomes even more difficult. Because it results in nagging and lack of confidence in each other which affects performance. Sometimes the designer takes unfair advantage and charges the client more than he should.
To overcome these issues, you need to define a framework for the project within which the workflow or milestones of the project and the payment schedule is defined clearly.
Let’s pick it up from Our Previous Blog, the ways to get paid for a website and getting the best prices:
1. CHARGING AN HOURLY RATE
This is one of the best ways to get paid for the actual efforts you put into the website. Plus the client is able to see the actual progress you make every hour and every day. Moreover, the platforms like Upwork also support hourly Freelance rates based on the nature of work. The Benefits and Drawbacks of hourly rates are as follows:
I. Client Friendly
This is a visible Give and Take, designers/ Web Developers get paid for their services per hour. Don’t forget to employ a time tracker which will work as evidence for the number of hours invested in the job.
II. Easy To Calculate
A Number of reputed platforms like Upwork let you offer an Hourly rate ranging from $15 to $75. This makes calculation easy when the advance speculation of the cost is confusing or the nature of the work is vague. Also, Professional Web Designers and Web Developers may charge you differently than Freelancers as professionals have a predefined framework.
III. Secured Income
Many times some overzealous clients try to squeeze more work in less payment or they keep introducing Enhancements midway which disturbs the workflow. Hourly payments curb it to some extent and web developers can secure a satisfactory amount for their work.
I. Client Management is tricky
Though the payment becomes easy, client management might get little complicated if one developer is engaged in more than one projects. The client might not be able to see the ‘value’ of your work beyond the ‘cost’ it occurs to them.
II. Earning Potential is limited
A developer needs to maintain her / his profit margin which becomes difficult with hourly payments. The hours spent on client handling and business management are not billable. It may also happen that the developer has deployed some kind of automation for a better quality of work which also reduces the billable hours;this will reduce the profit margin for a developer.
2. CHARGE AT FLAT RATE
When you have fixed rates for different kind of tasks, you can offer packages of services you are going to provide. These packages can also be customized according to the client’s needs and you still get the predefined price for your work. It’s pro and cons are:
I. Focus on Value
Neither the client nor the Developer is concerned about the billable hours spent on the project, so the emphasis is on the value of work. This gives a clearer understanding to the client as he knows what to expect in a fixed budget.
II. Faster Sales Process
There is very little nagging or negotiations between the client and the service provider regarding the cost & time; as it will be defined in the pricing sheet or quotation client receives for certain services. If there is still scope for negotiations, both parties might end up satisfied with the project. This speeds up the sales process.
Better scope for profits may result in more efficiency because there is a positive motivation for the developer. And he can also delegate tasks or use automation for more efficiency. The client can also focus on his business because he doesn’t need to get the hourly updates.
I. Time Taking
A well-established agency which possesses a good number of skilled developers and designers is more likely to convince clients to pay for packages at flat rates. New agencies and developers need time to invoke that kind of trust.
II. Scope Creep
If you don’t have a detailed contract with the Client, it will be very difficult for you to negotiate the “small” changes or Enhancements client asks for in the middle of the project. This will kill your profit margin. Even if you have signed a detailed contract with the client, they might find loopholes to squeeze more work in the price they have already paid. You can’t define every little thing in the contract.
If you are an End-to-end service provider and apart from being Website Development Company / Web Designing Company, you also offer services like Domain & Web hosting, Website maintenance, Digital Marketing and SEO, Plugins Licensing and SSL implementation etc, you can always go for packages at Flat rates.
3. CHARGING A MONTHLY RATE
Pros and cons of this are the same as charging the flat rate. As it is also a kind of flat rate but for recurring web design.
Page builder tools or DIY website solutions encourage the business owner to do it on their own and they feel it’s an unnecessary expense to pay a professional designer every month for something they can do. What they don’t understand is, these DIY website solutions or website building tools give you a limited design; whereas, with a Professional Web Designer, you can do whatever you want with your website. And this may take some time (months in case of big websites), so pay the designer only till you get the perfect website.
Unique websites deserve good prices and the best Web Development Company deserves appropriate rewards. These rewards are not always monetary; your trust, a Co-operative relationship and a healthy working environment hold significant value. Business Owners need to understand that complex websites like big E-Commerce Website Development deserves more payment and time than normal static websites. And developers need to understand that by putting honest efforts in helping their clients’ business grow, they are actually helping their own business.