5
2010
How much to charge for web services?
An article by 
When I was putting together The Broadband Bible (that compares about 300 ADSL plans), I was amazed at how much subterfuge there was in the industry. It seemed that ISPs were going out of their way to confuse their customer by providing dozens of different plans with subtle differences, and by not being transparent about actual costs. It was ridiculously difficult to compare one ISPs package against another ISP’s package. I think it worked in the ISPs favour, since everyone was so confused, they tended to stick with what they had, without asking too many questions.
I am afraid to say that the online development space is not much different. There is no guide, or reference point, as to what is and what is not reasonable to charge for a service. And if you are a customer, how in the world will you be able to tell if you are being ripped off or not?
I hear stories of companies charging R15,000 to put up a Facebook page or install a twitter account. Or R30,000 to install a WordPress blog. I once consulted to a client who charged his client R50,000 a month for maintaing a product that cost about R3,000 to install. I often see click through rates that cost in the high R100s, and for terms that were utterly irrelevant to the advertiser. Recently I heard of a click through rate in the high R1000s!
The problem is, there is no accepted standard rate. The even bigger problem is that value is very hard to measure in a field like this: the client is not just paying for a service, but presumably for the strategy that goes with that service. And that can be worth a lot of money, even though it’s difficult to justify when considering just the time or the cost of the product being used (WordPress is free, after all). Companies (and individuals) have various levels of expertise (and incompetence), and should be rewarded accordingly.
I am not quite sure how to fix this shortcoming, but I am going to try. What I would like to do is hear from a bunch of industry experts as to how much they charge, or what they think a service should cost. We could then use that as a starting point, and agree on benchmark costs for various services. I can fully see that a lot of companies are not going to see a value in participating in this, but I think it will do our sector a world of good. Just don’t expect it to happen in a jiffy.
So I would like to open up the platform to those who work in the development side of the online sector. Please get in touch with me, leave a comment on this post, or join my web expert group on Linked In where we can have a robust discussion. (You can also give the new Forum, as yet untouched, a try).
To start the ball rolling, I would like to hear your opinion on how much each of these should cost. Giving a range is fine, assuming that the lower bracket is what newbies would charge, and the highest bracket goes to established firms.
Great idea. But the problem underlying is is the level of competence of the web practitioner. I've seen big companies with BEE credentials and JSE listings and no real knowledge of the web get HUGE accounts that they charge exorbitant amounts for. The Clients who are also usually middle aged white men ( corporate SA top level) prefer to do business with their own kind and don't mind blowing money on something that they don't understand. Take for instance totally unimpressive and un-interactive six million rand Durban 2010 website – all with microsoft technology.
This is a good discussion. I'll comment more on Linked in.
1 comment? That's it?
My range would be R5,000 (newbie) – R20,000 (established, offering full strategic induction).
@karrenlotter
I absolutely agree that it is the expertise for the web practioner that is the issue. And the problem is that that is such a subjective assessment to make.. And the R6m Durban website is indeed a perfect example
@pawel
There is more discussion on the Linkedin Group too, but I guess the post needs a push ….:-)
Link to the Linkedin group or discussion page?
Here are some numbers / thoughts from our publishing company.
1. We have done multiple word press installations / upgrades in the last few months with a trusted partner. Cost for new website from scratch (including WooTheme, PlugIns, logo design, installation) – R3000. We then pay between R500 and R1000 per month in maintenance and support to the developer depending on which site he is managing and what ad campaigns are being rolled out.
2. Maintenance and support an important component for these sites as they are higher volume business sites and I reckon if you can find a reliable developer you need to keep them in the loop. Developer has NEVER missed a deadline (a miracle on its own), works after hours where necessary, always on call. Get your developer in as a longer term partner and it will save you costs in the long run.
…. and just to be facetious … if you charge somebody ANYTHING for developing a Facebook group or Fan Page then you should be dragged into the street and shot on “site” … (get it)
@pawel sorry…(the link is in the blog post) http://www.linkedin.com/groups?gid=1185827&trk=…
@marc
R3000 for that kind of installation and delivery is a bargain.
And yes, we get it
Phew…
An observation from the guy who does our web stuff – he is always wanting to learn. He can tell you about current technology and loves to show off some of the things that he has tried out. Very proactive from that perspective.
It is not always that easy to judge but maybe listen to the language that the developer / “social media expert” / marketing consultants uses when he talks about your project. Are they talking about being a long term partner or are you just a place to send the invoice??
# A wordpress installation, with a free theme, minimum adjustments, and the loading of relevant copy to make it “launchable”. R2500
# A Facebook fan page R1000
# A twitter account, with custom background R1000
# A 10 hour session of web strategy, with no implementation R4000
# Outsourcing a community management role to a client (10 hours per week) R400 / hour
# An acceptable click through rate for a site that is not selling anything, but is doing a brand building exercise (?)
# Facebook page R500-R1200
# Strategy – hourly rate
# Twitter page R500-R1200
# Installing a WordPress blog – full on? unique design etc. R4000-R8000
# Being a Community Manager – Hourly rate
I don't understand your click through rate question. Click through from what to where?
PPC campaign / direct e-mail?
@Marc
Click thru question: if you divide the amount of money spent to display your (say) banner ad, byt he number of click thru's you got, what does/should each click thru cost?
This is a “how long is a piece of string” question, sure. As long as your click thru cost is lower than the average profit from that click thru, you are fine (a whole other blog post on that!). But sometimes (often) there is no “sale” on the other side…just brand building etc.
As I said, I have heard of *the same campaign* getting a CT cost of R20 on one site, and in the *R thousands* on another site. Scary.
Cool debate. Fly by nighters taint all industries unfortunately. Take building for example
It's almost impossible to standardise pricing – often hourly rates are based on supply/demand, experience, loyalty to client etc. Transparency is the only way forward. And that age old value-for-value argument. Clients will pay for perceived value – it's our job to keep value given and perceived value in check so everyone's happy.
Perhaps another industry holds the answer? Doctors when reimbursed by medical aids are guided towards standard pricing. Many bill up to 300% of that becuase they can, they're in a better area, they give better service, they think they give better service etc etc.
Hmmm. There is also a perception of value argument here. I'd be worried of “web strategy” at R400/hr. No offense.
I wonder if this argument/debate works across any industry? Mr Lawyer, why should you charge R2500/hr when your friend charges R1500? Mr Accountant? Mr Doctor (don't even go there!)?
Etc.
Mind sharing that dev guy? That's a GREAT rate…
just reading your last comment. completely disagree.
a) companies don't know how far you can push facebook (html design, boxes tab, ads, polls, apps etc). Therefore they need advice.
b) The HARDEST decision to make (and I'll bet you the price ranges mentioned in this comment stream won't make it) – is NOT to go on FaceBook. Fulfilment, delivery, customer service culture – whatever it may be. That's strategy. Where to play. How to win.
I agree with Andy here, I've just spent the last 3 days wrestling with poorly documented aspects of fbml to make the impossible happen with this guy's facebook page
People Really charge 1000 to simply set up a facebook page? A newbie charges this much? Is this true? …I mean, it only takes a few minutes to set up a page for free… Someone please let me know…
People Really charge 1000 to simply set up a facebook page (without strategy,etc)? A newbie charges this much? Is this true? …I mean, it only takes a few minutes to set up a page for free… Someone please let me know…
I would say that all quoting should be relative to the company size, how recognisable the brand is, if there is an established audience and the companies annual turnover.
i would charge a different fee to an individual, a start up and an established business.
I don't think its a good practice to charge R3000 for a blog(just an example from the list) to a company that makes over R30mil a year.
Even R400 per hour can be a barrier to entry for most SME's
pricing is a formality not a necessity. its all about the services you offer your client for their investment. How much is really according to the individual. Money in relevance applies to the individual making it. If they have it they chose to spend it. don’t think of it from your perspective, but from the buyer.
They come to you on the basis of “they pay for what they get for”, not implying that cheaper is worse, just the security of paying more gets you satisfaction (not always guaranteed). That being said we get into ethics, moral, and supply and demand.
These in respect applies to every developer his/her self. which should reflect on the profitability of ones business( which also is not guaranteed).
Control is not necessary, but transparency would help, to allow for better decision making by the consumer.
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