WordPress Development for Noobs has been delightful to make, and you can view all of the chapters here, this is the eleventh chapter and gets a bit more personal. Pricing personal. I hope that some nugget of my ramblings about pricing makes sense with your situation, and I know that many of you have had an entirely different experience, and are in totally different markets, or have totally different expertise so thus your situation will be different. This being said, I think my attempts to find a sensible pricing model below will help some of you who are coming into your own.
What you will learn in this article:
- The 7% on digital marketing benchmark, and 35-50% of that for digital Skip to It Daddy-O
- Some of pricing is really just trial and error Get to It, Sugar
- So what kinds of businesses are good to go after? Come on and Give It to Me
The 7% on marketing benchmark, and 35-50% of that for digital
Pricing is an interesting beast no matter what industry you’re in – WordPress development is no different. But I will attempt to clarify a few aspects for you. If you are in the U.S. market, there is still some variation for acceptable pricing and ranges within that for the sizes of projects / clients.
My overall approach to pricing is based on annual revenue that a business makes and what the website’s value will be to them in the end.
Benchmarking suggests that companies spent 7% of their annual revenue on marketing, and 35% of that on digital marketing. This number is probably moving closer to half as time wears on.
So for companies with 5 million dollars in revenue they might spend $350,000 on marketing:
This is for a given year. Understand that this is a benchmark, not a rule – so they could spend $0, if they are shrinking $150,000 total for the year, or if they are growing $500k.
The 35%-50% of this number allocated for digital marketing would be – $122,500 to $175,000.
I assume that a website on the year would be a significant amount of their digital marketing spend, but obviously couldn’t eat the whole thing. So for the whole website I might expect a 5 Million dollar a year company to spend $42,875 on a website.
Another consideration that might drive down this number is that the website only brings in $200,000 on it’s own per year and the rest is done through distributors, retail, or some other vehicle. Because the website does support those other efforts, but doesn’t drive them, I would give the website 20% credit for other sales (being that it represents the company professionally and does help persuade them) = 1 Million dollars I’m valuing what this website can bring in / how much it’s potentially able to help their business.
If it’s done well it could literally increase sales 10 – 20% so $100k to $200k on the year. That’s a big deal! But obviously they can’t spend what they can expect in return on the site, or even half of it. There’s a lot of overhead to running a business – tax, etc. But let’s base our percentages off the 1.2 million number (sales attributed to being helped by or made from the website.)
$84,000 x .35 = $29,400 = digital marketing spend on the website total over this next year
So in a smart business like that, that might be 14k in a build and 1.5 a month in SEO spend over the next year.
The rest of that 84 could go to social, PPC, etc. etc. Anything not directly website related.
A 14k build wouldn’t be much for an agency, but might be great for a freelancer or a smaller agency, with 60% going to the development phase.
So the brass tax = $8,400 would be my dev budget on a project like that if I was the marketing director for that company and I was working with an outside agency.
The clincher – you can break down 84K a million ways, and if the business was totally driven by online sales, the full $122,500 (benchmark 35% digital marketing budget of 7% of total revenue) would be up fro grabs from PPC – to social – to website and SEO concerns.
You could go all in on PPC – or you could do more website related stuff, and SEO – it really just depends on whether their marketing director wants sales NOW, or wants to slowly build a more long term minded slower burn approach with SEO.
Some numbers for those who just want to be told what to charge.
If you can’t follow all of the above math and you’re looking for where people are going to bite for website design and development projects in general – without doing a all of the aforementioned value calculation, when people are coming to a smaller agency or freelancer:
- Small to mid size marketing websites might land in between 5-10k
- Adding ecommerce or other significant functionality might put a site 10-17k
- Significantly customized websites – built from scratch and/or integrated with more API’s etc. 17k up to infinite
Now these numbers are not what big ad agencies charge – but if you are someone who is working on your own or in a small agency, this is a common pricing range at the time of this writing.
Can’t I just charge what I want?
To be clear I know companies that don’t do WordPress development projects for less than 250K – because they are only talking to large online publications where the website is literally the business.
I’ve also seen people theme a website for 1,000 bucks in the United States.
In fact, I touched several of these types of projects when I was just starting.
First of all, I wouldn’t suggest you go this route if you were directing marketing for a company, but you can see how if you didn’t own the client how this isn’t the worst deal. 1k just to build something, if you know how – and you have a lot of these projects coming in – go for it.
The U.S. market has a lot more work for you if you’re a WordPress developer here, so if you are good you’ll likely move out of this lower number fairly quickly if you’re well connected or you have leads coming in through whatever means.
Some of pricing really is just trial and error
- If you were just starting out, I would get whatever you could get to get better starting from free to 1,000 bucks to 2 or 3k.
- If you are able to consistently pull in 2 or 3k – start pushing up from their and get 4-6k clients and once you gain your footing their push up to the next tier.
- Of course ideally you want to own the design and the development of the site, not be working through some other middleman and be making upwards of 10k and beyond (what is it, 3k of that going to the government for taxes.)
- But if you can’t pull these numbers, or if you only do the development, understand that people maybe won’t consistently give you 10k+ builds – you’ll have to cut your teeth trying to be useful on whatever projects you can bring in.
You will sensitize yourself to the market = which is dependent on many factors
Businesses in the country or suburbs are going to have totally different expectations than those in the middle of the city – generally city businesses will be prepared to drop a lot more, because their used paying more for subjective things like ‘taste’ or ‘perceived value.’ I’m not saying this is either a good or bad thing, but in my process I do price in my taste so city oriented businesses might understand that a bit more.
In the end it’s pure economics – price goes up when demand exceeds supply
The thing that’s a bit more subjective is quality.
Obviously you shouldn’t overprice yourself if you don’t have the necessary components yet to constitute high-quality services. You should cut your teeth on smaller companies and non-profits until you feel comfortable, but you also want to push that comfort for the good of your WordPress business.
You want to push price up when you can so you can do your best work
“Price high, and justify,” when you can get away with it, because it will allow you to have the room to create things of even higher value than the person paid. That’s a good rule – try to exceed the clients expectations and what you sold by 25% every project so that if you sold a 10k website, make it feel more like a 12.5k website or higher.
This will raise the ceiling for what you’re able to charge by filling your portfolio with work that could fetch those amounts in the future.
So anyways, my experience – which might be somewhat outdated – was doing sites (with both design and development) for these levels – in order:
1st site: Non-profit $900
2nd site: Gym $2,000
3rd site: Non-profit FREE
4th site: Music venue $2,800
5th site: Small clock business $1,800
6th site: Bakery business $1,200
7th site: Church $1,400
8th site: Chiropractor $3,300
9th – 30th: Anywhere from $3,000 – $80,000 builds (higher number ones were done through agencies)
The highest number website I’ve done as an individual was around 30k and I would say in my experience at least there’s somewhat of a ceiling there for what people are willing to pay to an individual – though I wouldn’t be surprised if there are people making more than that out there as web designers.
There are definitely people positioned more as an agency feel that can consistently pull projects of that size or bigger.
So what kind of businesses are good to go after…
When you’re first starting?
- Music Venues
- Small shops
- Lifestyle bloggers
When you’ve been around a couple years?
- Construction Companies
- Landscaping companies
After you’re very experienced?
- Fashion industry companies
- Bigger editorial websites
- National / international food brands
- Pet food and pet industry brands
- Health niche companies
- Other mid to high revenue companies from handmade products to national brands
It also may be very smart to position yourself, working as a subcontractor for agencies and forming agency partnerships. In my experience, working at an agency for 2 years and 8 months helped solidify my WordPress experience and work on bigger sites – and convince me what I am doing is valuable.
Some final thoughts on Pricing
Nothing is scientific about the above prices. But distilling down from the company you want to work with’s revenue by percentage and determining what amount might be allocated for digital marketing – their website – and subsequently the development of that website might be a good start. Their are always a hundred factors, but the strange thing is that price can actually be too low.
If people see that your services are priced half of the competition, what might they assume?
Keep this in mind when creating your proposals and raise your prices.
Now if you find that you can’t find work and your last 8 proposals failed (might I suggest not sending a proposal unless you’re 90% sure you’ll get the job,) then perhaps move halfway back down to what you use to charge. But the entire point is to raise your prices so you can do better work, and offer a different experience – many people really are looking more at the value of what they are getting than strictly at price.
I love the service Bidsketch for proposals by the way, check that out and no matter what, find a way to whip up proposals quicker than 2 or 3 hours. With Bidsketch I got my first one done in an hour and every one since then is done in around 20 minutes – which is amazing.