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The Cost of Doing Business with a Web Agency

March 3, 2016
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I got asked a really great question last weekend and figure I would expand on it in a blog post. The question was “what’s the difference between a $2,500 project/website and a $15,000 project/website?” This, believe it or not, is one of the most probing questions I’ve ever been asked. Hence, the need to write a blog post on it.

So…what is the difference?

I’ll tell you as I see it, and I want to preface this by saying, my word is not absolute. This is completely my opinion and my thoughts that stem from the experiences I have working at a small agency and a larger one. The smaller agency charged anywhere from $2k – $20k per project and the larger agency charged anywhere from $50k – $250k per project. I would love to say that the difference is level of effort, but that’s not necessarily true. I think what we have to do first, is look at the variances of what we’re talking about. There are many, many variances in agency types or tiers, types of projects or websites, and variances within those projects.

So what kind of an agency is right for your business, what are the pro’s and con’s of each?

Types of Agencies

In the design and development world there are all types of designers and developers ranging from freelancers to mega-web agencies, small design shops to professional engineering firms. There are marketing agencies, social media agencies, and SEO agencies. For the sake of this post, I’m going to concentrate on the different types of website design/development agencies, the ones that do strategy, design, and development. This will be mostly for people or companies looking to get a website designed and built.

  1. Freelancers: These are the hardest ones to put in a category, because like agencies, freelancers can range a great deal. There are the novice freelancers, many of them do projects for next to nothing, sometimes they actually charge nothing. They’re just starting out and want to grow their portfolios. But then, there are other freelancers out there who are phenomenal. Usually these freelancers are expensive and don’t take on many projects because their plate is already full. You can usually find freelancers ranging from the novice to the expert on sites like Upwork or Elance, just make sure to check out their ratings and reviews.
    • Advantages: One person owns the project from start to finish (not being shuffled between people); Almost always less expensive than agencies; Can usually get the job done very quickly
    • Disadvantages: One person owns the project from start to finish (so, stability could be an issue depending on the freelancer), if they run into a speed bump that could mean the end of the project; Skill set is usually limited to one area like development or design, not both — unless you find that unicorn freelancer, they are out there!
  2. Small ‘Everywhere’ Web Agency (2 – 10 employees): These agencies are very common and popping up everywhere (hence, the ‘everywhere’), and like freelancers, they can range a great deal. Most small web agencies don’t have a focus in terms of industry. They’ll work with a lot of companies ranging from lawyers to restaurants to local businesses. The owners often times act as project/account managers and the staff is limited in their experience. That’s not to say that these agencies aren’t good, there are good ones out there, but they mostly do simple marketing redesigns, blogs, and brochure-style websites.
    • Advantages: Prices can range, but usually it’s within a small businesses’ budget. Often times you can get redesigns done for $2k to $10k; These agencies are friendly and will treat you like family, and they’ll go the extra mile to keep you as a client.
    • Disadvantages: They sometimes use templates for design, so you’ll see many clients that have the same navigation bar or search box style; Sometimes they’ll modify themes instead of making custom ones; And often times they don’t have an in-depth process when it comes to the strategy surrounding the project.
  3. Boutique Web Agency (5 – 25 employees): These agencies are the ones that usually have sharp focus in a niche industry, like “we only work with non-profits,” which makes them really great in that one (or two ) specific vertical(s). Their process is somewhat refined and they have a small team. They usually have top-tier talent (one or two rockstars) and project or account managers. They work with medium-sized business and most likely have a few enterprise level clients.
    • Advantages: Focused verticals, know the specific industry inside and out; Refined strategy processes; Top-tier development and/or design talent; Most likely have good project management skills
    • Disadvantages: They have small teams that are most likely working on a number of different projects; May push out the start date depending on workload; Often times rely on the top-tier talent to take the bulk of the projects
  4. Professional Web Firm (25 – 75 employees): These firms are the ones that have focus in a few different industries and market themselves that way, but they’ll also push their own boundaries and take on projects outside their industries (not all the time!). They usually have a sales department (or sales guy) and marketing team. They’ll have dedicated project teams and a handful of project managers. They’ll also have a solid leadership team to motivate and corral the team members when needed. They have processes set in place and incrementally improve them. They consider strategy a big part of the web game and use it to deliver solid projects. They have full day discovery workshops and probably do user testing to confirm hypotheses. They work with big companies and enterprise brands, but still have a few small to medium businesses that they got when they were starting out.
    • Advantages: Custom work, you’ll get a unique website that’s built for your users (hopefully!); There will be an outlined process; Roles and responsibilities will be defined; Strategic thinkers that will use data to make informed decisions; Will assign a dedicated project manager; Top-tier talent
    • Disadvantages: They’re expensive; And they’re not the quickest on project timelines, they plan and plan, and that takes time; Often times they overload their team because of client demands
  5. Mega Web Agency (100+ employees): These are the large agencies that take on a number of different verticals, they almost always have distributed teams and work on some really big projects. They’ll have every type of agency person including user experience designers, digital strategists, marketers, software engineers, strategy partners, and a large leadership team with dozens of years of combined experience. They usually don’t take on projects for less than $250k (I know some that start at $500k or even above!). They work with brand names (think Google) and they’ll do mostly (if not only) custom work.
    • Advantages: Super custom work tailored to your users; Strategy will be the biggest part of the project; They’ll usually work in sprints and test at the end of each sprint to verify concepts and prototypes; Quality Assurance will be meticulous
    • Disadvantages: You need to be a huge company to work with these guys, because they are expensive; There might be a waiting list to work with them; There will most likely be a number of people in on the project at different phases/stages of the project, so you’ll meet new people constantly

What about agencies with 75 to 100 employees?

Good question! Well, this is by no means a complete list. I’ve noticed the farther I go in web services (or just web in general) there are soooo many types of agencies out there. There’s also the Digital Body Shop which usually has anywhere from 50 – 100 employees, and they do a bunch of different projects in different verticals and work with a myriad of industries.

Just remember, this stems from my own experiences and the people I’ve talked with.

Let’s get into project type and what their average costs are with the different agencies.

Types of Projects / Types of Websites

Like agencies, there are definitely a myriad of different projects and websites that can be created, designed, and built. Some are simple, and some are super complex. So, I’ll list out the most common projects most people are likely to encounter and most agencies and/or freelancers would take on. To limit things (because this is already a long post!!), I’m going to just do pricing for the 3 web agencies in the middle: Small Agency, Boutique Agency, and Professional Agency. Please keep in mind, these are averages (prices all depend on the scope) and can realistically range from $1,000 to millions!

  1. Blog: This is perhaps the simplest type of site which mainly consists of a content management system (like WordPress) and updated content coming out on a regular basis.
    • Price:
      • Small: $1,000 – $5,000
      • Boutique: $3,000 – $15,000
      • Professional: $10,000 – $35,000
  2. Microsites: These can be deceiving. Just the term ‘microsite’ sounds small, but I assure you they can be the opposite of that! Microsites are usually when a company wants to promote an event or showcase a certain branch or department of their company. Often times there is video or images, CTA’s (calls-to-action) prompting the user to do something like signup for a service or check out certain resources. They can be cool ways to get more awareness.
    • Price:
      • Small: $2,000 – $8,000
      • Boutique: $5,000 – $25,000
      • Professional: $25,000 – $75,000
  3. Marketing Site: These are called different things, sometimes Informational sites, or Brochure-style sites, but essentially these sites just market your company or cause or whatever! They can be a little trickier than blogs because often times they require implementation of ad-serving, email newsletters, videos, or image galleries. I’ve seen these sites range anywhere from $5,000 to $80k, depending on what’s involved with them.
    • Price:
      • Small: $2,000 – $10,000
      • Boutique: $10,000 – $50,000
      • Professional: $35,000 – $100,000
  4. Site/Application Build: These are a little trickier to price because they almost always involve doing some type of integration with another system. Like integrating with a booking engine or an events registration system. These builds can be complex and should be handled by top-tier talent. Be careful to go with a price that’s too low (there is such a thing!) because they should be priced accordingly – they are hard projects to work on!
    • Price:
      • Small: $8,000 – $20,000
      • Boutique: $35,000 – $120,000
      • Professional: $75,000 – $250,000
  5. Membership Portals / Member-Based Sites: These can be fun projects and if done right can come out really well. With WordPress there are some default membership properties like Editor, Author, Subscriber, etc. But a good agency can do almost anything with these and other CMS’s, like Drupal, let you customize your user roles. But because the needs of a client can vary a great deal depending on what they want their membership site experience to be like can determine how much the project will cost.
    • Price:
      • Small: $5,000 – $25,000
      • Boutique: $30,000 – $150,000
      • Professional: $75,000 – $300,000
  6. Ongoing Support: Obviously this all depends on the size/scope/scale of your digital property and what your needs are, but usually prices start at the following amounts.
    • Price:
      • Small: starting at $100 per month
      • Boutique: starting at $500 per month
      • Professional: starting at $1,000 per month

Again, this is not a complete list. There really are multiple (sometimes endless) types of sites that you could potentially do. You could also have a hybrid of sites, like a Microsite within a Membership-Based Site, oh the possibilities!!

I guess that’s what I like about the web, the possibilities, they are endless!

But I hope this sheds a little light on what types of agencies are out there, what they typically charge for web projects, and what to expect from them if you ever need their services.

So, to answer the original question, I’m not sure what the difference between a $2,500 website and a $15,000 website is. I would say there are different types of agencies that price projects out differently depending on their market size, location, and client type. But with that being said, I really hope that a $100,000 project from a professional agency comes out better than a $10,000 project from a small agency,  but I tell people it’s like buying a car – “You can get a Hyundai Accent for $15k and you could get a Lamborghini for $250k (is the Lambo better? Maybe..) but they’ll both get you from point A to point B!”

How much does a website cost?

October 10, 2014
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After being in the tech space for almost two years, I’ve learned quite a bit when it comes to the pricing of web projects. So…how much does a website cost?

A website costs time, it costs value, it costs behavior, and it costs relationships.

A websites’s cost is dependent on the time is takes, the value it brings, the behavior it causes, and the relationships it has.

Cost all depends…

Many agencies have hourly rates. Our blended rate is $150 per hour, we take our top strategists, our designers, and our developers and average out a blended rate. This is based on time. How long do we think the website will take to build? How many man hours? How many months? Websites can cost time, but they can also cost value.

How much value will building this website bring to your organization if we do right? How much value will you lose if we don’t do it? Value can be really hard to measure, but it’s something that you as a business development associate can help showcase by having your agency come up with an awesome and innovative web solution.

Behavior is another interesting thing to look at. What will the website do? How many features does it have? How much functionality do you need? Someone once told me about the Bermuda Triangle of pricing web projects: Quality, Functionality, and their relation to Cost. Most companies that have a small budget can choose either quality or functionality, but you can choose both.

And finally relationships. Will this be a good and easy relationship? Are they going to be a problem client? Will they listen to my advice?

The reality is, that websites can range from $1,000 to $1 million, it all depends on what you want! I read this incredible article, it’s a bit a the long side, but well worth the read. It’s all about agency costs and why we hate estimating. For anyone who’s been in my shoes, it’s really tough when someone asks you to give them a number, “well, just give me a number” – no, that’s a bad idea

Why? Because in order for me to give you an accurate number, I need to know more about what you’re trying to do. The solution is there, but it usually takes uncovering. I need to know things like business objectives, any creative objectives, what’s your timeline, what’s your budget. People have a tough time telling me that last one – budget. But I need to tell you why it’s so important. Budget dictates a lot of the solution finding process. It tells me that if you only have $15k to work with, then we probably can’t do any custom design for you, but we could take a pre-made template off the shelf and configure for you to be your own.

It’s a hard web to weave, and budget is crucial. If you don’t want to tell me your actually budget because of competition and the like, then I still need a range. Are you working with 10k or 100k. And beyond that I need to know what’s your timeline look like? Do you have a realistic timeframe? I ask a lot of questions, but this helps me get the answers I need to make a great proposal for you on your next project.

And just to let you know, not everything for a website takes 15 minutes. I love that one – “hey, I need you to put some forms on this site, that should only take a few minutes, right?” – WRONG! Working with working software is tricky, and can be daunting. So, keep in mind that it’s a process, anything you want to do (with the exception of writing a post, that’s relatively straightforward) will take time and therefore, money.

Check out this incredible article that I was talking about, it’s really amazing, but make sure you’ve got some time because it’s long!

How much does a custom WordPress site cost?

Have any website ideas, or are thinking about putting together that next blog? Let me know.