Is Your Web Developer Providing You With Value?

Tom Snyder photo by Tom Snyder on Jul 16, 2000

(Originally published when Trivera was named Websight Solutions)

Advertising Age’s NetB2B annual price survey for Web development services has been released, and it shows what Websight Solutions customers have known all along. While offering all the design and development capabilities possessed by the largest firms in the country, and providing a level of service typically surpassing that of those companies, Websight Solutions’ prices for services still remain significantly lower than the national average.

And while there are local Web developers who may price their services even lower than Websight Solutions, the horror stories of lost deposits, unfinished sites, mismanaged projects and unprovided services by these companies grows at an alarming rate.

First the numbers. The award-winning NetB2B Web Price Index is the longest-running national benchmark of how much marketers can expect to pay for Web services. The participating developers are sent the descriptions of entire Web projects, as well as individual services, and return the prices they would charge their clients to develop those projects. The results are then aggregated into the median, high, and low prices.

Current prices for developing different “sizes” of sites are broken into three types: 1.) A small manufacturing company with rudimentary online e-business capabilities, including self-administration capabilities, 2.) A larger, more robust information distribution site, with password protected client areas and self-administration capabilities, and 3.) A full-fledged e-commerce site, including online purchasing, real-time credit card processing, and self-administration capabilities.

While the National median price for even the most basic of the sites now exceeds $100,000, many of Websight Solutions projects still remain in the five figure range. Even the most robust of the e-commerce-enabled sites that have been developed by Websight Solutions have been completed at a fraction of the cost of the national average.

In the popular area of e-commerce, Websight Solutions provides significantly greater value than the average. The National median price for the back-end e-commerce design, development and execution alone is $730,000, with the surveyed national low price at $112,000. Websight Solutions typically provides this type of functionality for significantly less.

The largest area of new growth for the industry is database development. This type of functionality provides a company the ability to request, store, manipulate and administer data online. Either for inventory purposes, dissemination of information or for on-demand searches, databases make up virtually every project we’re doing these days.

For the current Web Price Index, Advertising Age asked developers to estimate what it would cost to set up a Web site for a sizable head hunter group in the tech field. where its clients can retrieve resumes submitted by the public. On the public side it will need a crisp and clean form for submission. On the backend, it will need a database to store all the information. Developers were told to use the database software of their choice, and to include in their price estimates a server capable of supporting it. The site also needed a Web-based way to sort the data–by skill set, for example–and display the candidates that match the criteria. The database development costs ranged from $20,000 to $775,000, with the average price for this functionality weighing in at $227,038, and the median at $62,000.

Websight Solutions has done several sites of this type and has delivered even more robust functionality for less than the national median, and thus, significantly less than the national average.

Websight Solutions pricing policy is designed to provide world-class expertise and top flight service, and (because this IS Milwaukee), to do so at the best price possible. And while we are less than many of the larger companies in the larger markets, we’re still higher than many developers in our area. But we have chosen that position by design. A talented, conscientious and customer service-driven staff costs a bit more. The companies here who price their services for less also fail to take into account all their expenses, including the cost of the project management necessary to guarantee a smooth development process, and scalable resources to allow for completion even if the project specs change during the development process.

So why should you avoid a developer who prices their projects lower than ours?

Over the years, we’ve begun to see an increasing number of Web development firms who price their projects with a goal of simply pricing them low enough so they never lose the business to a higher priced competitor. Unfortunately, once the project begins, they realize that they can’t finish it and still break even. Some then simply stop serving that client, or even close up shop and disappear. As unbelievable as it may sound, we’ve seen that over and over.

Here’s the most recent example. We had a potential client who had us prepare a quote for a project. Our price was higher than that of a competitor. Based solely on the price difference, they decided to go with the competing developer, paid them a significant retainer, and then waited for their project. Five weeks later, when there was nothing at to show, the client voiced his concern. He was told that his representative had been “suspended,” and in addition, they had to lay off several other staff members for lack of business. Two of the staffers who had been laid off were the ones who were working on his project. They had no idea when they’d be able to finish the project. So now he sits, out the several thousand dollar retainer, with an unfinished project, and no finish date in site.

This is the same developer who convinced an existing client of ours to hire them to go with their lower bid for advanced e-commerce capabilities. Six months later, he’s stuck with a site that is not properly calculating totals or offering secure transactions (although the site says it is). And it’s frustrating for us, because in both cases, we warned against these very situations, but the clients decided to base their decisions on price alone anyway.

It’s relevant that today while doing the final edit on this article, curiosity drove us to visit the site of another local competitor who has been consistently undercharging for Web development services (one to whom we lost two potential clients, and two existing clients on the basis of price alone). That developer’s site is gone completely, and two under-construction Web sites that were being done by that developer now sit, apparently half completed, never to be finished by this developer.

This reminds us of several quotes. One from the 19th Century author John Ruskin who said “There is hardly anything in this world that some man cannot make a little worse and sell a little cheaper, and those who consider price only are this man’s lawful prey.” Then there’s the axiom to always remember that the bitter taste of poor quality lasts far longer than the sweet taste of a low price, something all the above clients are realizing.

As Zig Ziglar, the great sales consultant, says (and around which we’ve built our company): We would rather explain our price once than apologize for our quality forever. While we are lower than the national average, we are still higher than many smaller shops in town. But that’s by design. By pricing our work at what its worth, even if it’s higher than some of our competitors, we avoid inflicting upon on our customers the additional costs of a bad product and poor service.

But, we can’t think of a better philosophy to build a business upon!

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