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Design & Development

Why you can’t have a £50k website for £20k (and similar denominations)

Why you can’t have a £50k website for £20k (and similar denominations)

One of the key talking points at Drupal Camp London earlier this year was the challenge of pitching and the difficulty in providing profitable work on fixed priced projects.

It was interesting to hear one of our industry’s leading peer agency’s admit that historically, they lost money on 35% of all their fixed priced projects.

To alleviate this risk, another agency we spoke to has implemented a policy of not engaging in the RFP process at all.

They choose to provide a chargeable detailed design and functional specification instead. And since switching to this method, their lead to conversion rate has increased, their profitability has increased, all their projects get delivered on time, and their advocacy levels have gone through the roof.

Our role as an agency in the pitching process is to primarily to overcome two challenges:

  1. Fixed budgets that are allocated by finance departments as percentages of marketing spend, profit or turnover, which bear no relation to the cost required to deliver a  project successfully, and..
  2. Overcoming the tendency for a prospect to accept the lowest price because they can’t differentiate between the offerings

As a business ourselves, we fully understand the need to work with budgets.

But in the same way a fixed budget might let you fund an entry level Mercedes, but not a top level Mercedes with a bigger engine and stacks more features, so a budget you pledge to a web project may not be enough to give you all that functionality and design standard that you need to make the project a resounding success.

And success in most cases can be directly related to conversion rate performance, a subject that can produce eye-watering results.

Overcoming the tendency to accept the lowest price comes down to the challenge of helping clients understand that not all websites are created equal, despite them all being called websites.

And that in many cases, more investment will mean a superior return because the end result will convert a much higher percentage of users into leads, sales or advocates.

The anatomy of web design cost.

Web design cost is made up of two main components:

  1. The amount of hours required to build the project, and..
  2. The hourly rate of the agency

So what can a company do if they have allocated a fixed budget, defined their requirements and put it out to tender, only to find the projected costs coming back at two or three times their expectation?

Firstly, they can reduce the number of hours required to build the project

This is obvious, but no so easy to achieve.

It’s true that some agency’s work faster than others, Agency’s that have really sorted their internal workflow out, or that may have a deeper experience in the client field, or who have the ability to reuse code can often deliver a spec for spec site up to 20% faster, which translates to a 20% reduction in cost if everything else is equal.

Reducing the level of features is another way of reducing development hours, but prospects can really struggle with this. They will frequently use phrases such as ‘just’ and ‘only’ when talking about feature requests and who can blame them? The prospect only sees the end result, not what it takes to get there.

So if you want a £50k site for £20k you’ll start by trying to figure out how one agency might be able to work 20% faster than the others in your pitch pool, and that gets you down to £40k.

Then, you can try and understand how to reduce the feature set to reduce the development hours.

Wunderkraut, Europe’s largest Drupal agency have a great way of articulating this:

They argue that if 100% of the feature set will represent 100% of the cost and that’s too high, what if 80% of the feature set could be delivered for 50% of the cost?

That for us is a logical approach, and in many cases would deliver value for the client.

So reducing the feature set by 20% might get you your site for £25k, but if the 20% reduction is all the stuff that would really make your site fly, then caution is urged.

This is particularly relevant when it comes to conversion rate optimisation, and if that 20% of feature set or £25k of cost sees conversion rates drop from say 3% to 1%, you could be loosing hundreds of thousands of pounds of lost revenue in the first year.

Secondly, so what about reducing the man-hour rate?

Hourly or daily rates can be roughly split into five tiers. This is by no means cast in stone, but it does simplify the argument:

  • Tier 1 agency – up to £3k per day
  • Tier 2 agency – around £1.5k per day
  • Tier 3 agency – around £700 per day
  • Contractor – around £400 per day
  • Offshore contractor – around £160 per day

Unfortunately, making direct comparisons based purely on agency rate is difficult:

A Tier 1 agency won’t be pitching for a £50k project anyway. A Tier 2 agency will have more senior staff that will work faster than junior developers. They may also need less R&D so ultimately may be able to deliver a project in less hours.

A Tier 3 agency may on the other hand have exactly the right project specific experience and may also be able to deliver a project faster than a competing agency.

A single contractor won’t have experience across all the main disciplines of creative, design, UX, architecture and development, so will only provide a cost saving if part of a wider team.

Going offshore won’t deliver the same standards by a long way and in our historic experience won’t offer a genuine cost saving – not when you take into account the greatly increased project management and delays for misinterpretation or reworks.

Conclusion

If you want a £50k site for £20k, its safe to assume you can’t. Something will have to give. You’ll either have to peg back your wish list of functionality, or accept lesser levels of design and development standards, or cut corners (and be aware these are being cut).

In our opinion, cutting back the functional wish list is one logical approach, because if managed correctly, you can always build this back up in the future.

Another option is to stick to the specification but build the project in two or more phases. We’ve had a few projects like this recently and its almost self-funding for the client. Phase One delivers an immediate sales uplift, which helps provide the budget for Phase Two and so on.

That said, the option favoured by many companies is to stick to the wish list and budget and keep going until you find an agency that will help – and there are plenty of agencies out there willing to take on a project for a relatively low budget and hope it all works out.

Unfortunately, motivations will probably wain after the thrill of the win wears off, and the chances are you will contribute to our deplorable industry statistics:

  • 65% of all projects are delivered late
  • Clients are disappointed and don’t getting what they expected in 35% of cases, and this rises to 50% when the work goes offshore 
  • (Source: Aberdeen Group).

But dissuading prospects from this approach is a tough sell – especially when all the indications at the start suggest you really can get a £50k site for £20k.

We continue to try and find ways of helping companies make better-informed decisions, and on the whole we are getting there.

I hope this article gives you food for thought, and best of luck with whichever approach you take.

Website Graphic Design Standards – Image Based Essential Sales Driver or Just Window Dressing?

Many people think of graphic design as fairly subjective – beauty is in the eye of the beholder and all that.

But can graphic design, or more importantly, the standard of graphic design on your website help or hinder sales, and if so, by how much?

Graphic Design

I have to confess I am a graphic design standards advocate. In my formative years I cut my teeth with one of the world’s largest Advertising Agencies and learnt all about typography, imagery, quiet space and messaging.

In fact, everything you need to create a compelling visual canvass that people will lock onto.

I’ve tried to instil a culture of persuasive design in D. Agency and its fair to say its one of our strengths. We have a reputation for creating websites with strong visual identity but its not all plain sailing.

On many an occasion, our design work has been dismissed by a minority of people as “eye candy” or “window dressing”.

This tends to happen when companies approach us for work with an “Organisation Centric” approach to web design, or comments come from people who don’t deliver particularly high standards of design, choosing the “a flashy looking website is useless  if it doesn’t deliver what the customer wants” defence.

So how valid is the argument for strong design identity on a Website?

The easiest way for you to demonstrate this is by using one of the fantastic low cost testing tools from companies like usertesting.com or whatusersdo.com

User Testing

If you haven’t tried these tools yet, you really should – they can tell you why people might be leaving your Website and lots of other things as well.

These tools provide you with a real life video recording of how people interact with your Website. You can discover what the initial impression is of your site when a visitor lands on it for the first time, and you can also learn about problems or ‘friction points’ that users find irritating.

Here is a transcript of three responses from a test managed by conversionrateexperts.com on behalf of one of their clients.

“The site seemed kind of amateurish. There was a feeling that the company did not take the Website seriously.”

“In general, I think the home page needs a refresh to make it more attractive – it is now more like a virtual storefront than one from a company as well established as [company name].

“It was unprofessional and amateur looking and hard to find the correct link to use. Regardless of what size company you might be, a website can make you look as though you are the largest company in the UK… in any industry.”

Now see how a small improvement in graphic design gave an overnight 7.4% improvement

In response to similar feedback, conversionrateexperts.com carried out a very simple page re-design. There were no changes to the copy, or to elements on the page or their position – just a re-design of existing elements.

The result was an instant 7.4% increase in conversion rate from 1.78% to 1.91%.

If we take a B2B website with 10,000 visits per month and an average customer sale value of say £5,000, then the new webpage will generate £65,000 more revenue per month or £780,000 more revenue per annum.

All for the right design updates.

Conversion Table

Our message

If your visitors are concerned about the appearance or professionalism of your Website, you could get a massive boost in leads, sales or advocacy if you re-design it.

What could an increase of say 0.5% in conversion rate mean for you?

Use our conversion rate comparison tool and enter data for your own business case – it’s free to use and you don’t have to register.

The results will demonstrate the increase in revenue from 0.5% increments in conversion rate. Go on, try it now and see what it could mean for your business.

Still not convinced?

Why not try usertesting.com or whatusersdo.com

Try using Likeart based statement responses to prime your testers. Likeart responses normally look for a response to a question based on six levels of response ranging from “Completely Disagree to Completely Agree”.

You can adapt this for user testing to get responses based on peoples “perception” of your company through your website, which is exactly how new visitors learn about your business.

Brief your testers along the following lines:

“Please visit the following website [your website], spend no more than 5 minutes navigating the site and record your response to the following statements:

  • “[Your company] is a Top 3 company in its field”
  • “[Your company] can help you increase your sales”
  • “[your company] can help you become more efficient”
  • “[Your company] can help you reduce costs”
  • “I would definitely buy from [your company]”

You can tweak these questions to suit your own business but remember this important point:

All sales begin with a person’s perception about your business. It’s impossible for a person to form an in-depth assessment of your company from the first interaction.

The progression of the first interaction comes down to the person’s perception of your business and for that you need image.

An image of trust, integrity and reputation is all you need to flow a contact through to a lead, sale or advocate.

And a professional image starts with a high standard of graphic design.

Related Articles:

Planning to Invest in SEO or AdWords? See How Conversion Rate Optimisation Could Help Give You a Bigger Bang For Your Buck

Photo Shoot Services

If you need quality images for your business or products, D. Agency has access to the very best facilities located on site at our offices.

At our head office building, at D. Agency, we’re very lucky to have a high-quality Photographers studio tucked out the back, with impressive, modern facilities. The larger studio occupies what used to be the main projection screen of the original, art deco-style picture house.

Photoworks have been operating for over 20 years and owner & lead photographer, Andy Cahill uses the very latest cutting-edge equipment and rigs to achieve a top professional finish.

New Photo Studio Available for Hire 

Recently, a couple of us from D. Agency muscled in as background-extras, on a demo shoot to promote a newly opened additional studio, which is now available for hire.

D. Photo shoot with Paul Querol

Above: D. Agency's Drupal guru, Paul (‘Q’) Querol working the laptop role with vigour, on a culinary-themed setup.

 

D. Photo shoot with Paul Barnes

Above: D. Designer, Paul Barnes takes up a coffee and provides the rough edge in this, otherwise beauty-themed setup.

 

Main Photo Shoot Studio

Photoworks Studio at Picture House

Above: The main studio housed in the main screen area of an old, converted art-deco picture house.

 

Create Web Design colour themes in less time with this great free tool called Adobe Kuler

Adobe Kuler is a FREE web based application that lets you quickly create colour themes for any project.

Experienced designers will already have a strong grounding in the complexities of colour theory, but everyone can save time using this great tool.

Create Web Design colour themes in less time with this great free tool called Adobe Kuler

Once you register with Kuler, you can create your own colour themes and palettes in far less time than it takes by using reference books.

You can log back in at any time to view and retrieve themes saved in your personal MYkuler space.

Kuler is a great product because it encourages you to experiment with different colour combinations. You can even tag a colour from an image or corporate logo, and Kuler will build themes around it.

Why not have a play and create your very own colour theme.

Planning to invest in SEO or AdWords? See how Conversion Rate optimization could help give you a bigger bang for your buck

Read this real-world comparison of two Websites selling an identical product range.

Planning to invest in SEO or AdWords

Comparison table: Real world comparison of two live websites selling exactly the same products

You’ve got a Website and you want it to contribute more to your bottom line. The site generates business for you, but you want more.

The logical thing to do is push more traffic to the site by using tactics such as SEO, AdWords, Social Sharing, Backlinks, Affiliate Programs etc.

But hang on a minute; traffic is actually quite expensive to develop. It’s also progressive so you won’t quite be leaping to Position 1 in Google’s organic listing in the next few weeks.

In fact, a well-defined online marketing strategy could take several months to get everything implemented and up to speed.

Of course traffic is important, but is there a way of complimenting SEO and AdWords to gain faster results? 

Yes there is, and it’s called conversion rate optimization, the logical process of ensuring more people who visit your Website convert.

Conversion rates apply to all sorts of businesses. You could be measuring the volume of product sales, the average basket value, the number of leads generated in the case of B2B, the number of paid subscribers, or the number people signing up for anything from an event to a clinical trial.

Here is a real work scenario that demonstrates the power of conversion rate optimization and the effect it can have:

A company operates two Websites in its market. They both sell the same products. Website A was purchased as a going concern and has been live for over a year, whilst Website B was commissioned as a new build to run in parallel.

It’s a scenario that provides an opportunity to directly compare the performance of both sites.

Now, Website B hasn’t been live for long, so it can’t yet compete with the traffic generated from the more mature Website A, but its already producing a higher volume of sales.

What’s the reason behind it?

Website B has a visitor-to-sale conversion rate of 3.29%, whilst Website A has a conversion rate of 1.39%.

To realise the full implication of this, I compiled the comparison table at the top of this post to demonstrate. I replaced the actual traffic with a constant of 10,000 visits a month because it’s the implication of conversions that’s important.

So every month, Website B will generate 190 more sales and £9,500 more in revenue based on this model.

Of course in your industry, the average sale might be £100,000 if it’s a large item of capital equipment or the value of a long-term account.

Another important point to make here is that I’ve also kept the average sale as a constant to make the illustration easier, but in fact, the average basket value is higher on Website B as well, but I’ll save that for a different post.

So if you have an existing site and you’re considering upping spend for online marketing, why not look at the potential for conversion optimisation.

Alternatively, if you are putting a brief together to purchase a new Website, make sure you make a request that each vendor includes notes and evidence to back up how they intend to maximize conversions.

This way, when you get the proverbial three quotes back suggesting a build cost of £10,000, £20,000 and £50,000, you’ll be better placed to judge the value.

Incidentally, Website B cost around £10,000 more than Website A because ther was an investment in user-centred practices such as personas, UX analysis, experience mapping and prototype testing.

That said, its clear to see that not only could the difference be paid back in a very short space of time, but if we took a 2-year view using this illustration then Website B would generate £228,000 more in revenue without any extra investment in SEO or marketing.

If you would like to see the benefit even a small increase in conversion rates could have on your revenue, try out our FREE CONVERSION RATE TOOL - it will only take a minute and you don't even have to register. 

Related Articles:

Website Graphic Design Standards – Image Based Essential Sales Driver or Just Window Dressing?

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