When you quote a website project, how much thought do you put into it? Are you using a method, or just painfully guessing what will bring you a good profit? No matter your method, make sure you think it through because it has a big impact on your agency’s profitability.
I get many calls from agencies that are looking to expand their business (not surprising since they’re looking for WordPress outsourcing services). One of the questions I like to ask is “How much do you charge for a website?”.
It seems that the higher their number, the more relaxed they are. The agencies that struggle the most seem to be those that compete with low prices and need to build up volume to cover for their overhead.
Increasing prices is not an option for every agency. But while competing with a low price is a simple way to enter the market, it’s a challenging strategy when you want to grow.
This article focuses on agencies that are selling website projects anywhere between $2,000 – $35,000 since those are the types of projects we work with.
If your agency works with much larger projects there’s an article by Peter Kang on calculating project profits in a creative services agency with an example project sold for $95,000.
Factors to determine a fair price for a website project
How high you can quote a website project depends mainly on two things. The value you provide, and how well you can communicate that value to your prospective clients.
I’m not going into the sales tactics in this article, but let’s look at the factors determining the value of a website to a client:
- How well it can bring relevant organic traffic to the website
- How well it can make visitors consider the services/products offered
- How well it can convert visitors into customers or sales qualified leads
For a jewelry brand, it’s likely that paid traffic will be the main source of visitors, and that purchases are made on the first visit to the site. The main value of the website is then to convert visitors to customers in the webshop.
For large B2B companies, visitors often already know about the company or come back to visit multiple times. Visitors will then want to find information that is well written and organized, making the presentation of content the most valuable factor of the site. Probably in combination with a visually appealing design that communicates high quality.
If your agency can deliver the value, you can price your website projects accordingly. The number of pages on the site, the time it takes to code it or the price your client “had in mind” could be far from what you should be charging.
“If your agency can deliver the value, you can price your website projects accordingly. The number of pages on the site, the time it takes to code it or the price your client “had in mind” could be far from what you should be charging.”
Strategies for how to quote a website project
There are different approaches to quoting a website project, some more common than others.
Most agencies will have an hourly rate that they apply to most of their work, and figure out the time it takes for all their team members to complete the project.
Many small agencies will apply the same rate (“blended rate”) for the work of all its team members. However, a study by The WOW Company shows two things. First, agencies with over $1,300,000 in revenue (£1,000,000) are more likely to use tiered pricing, and secondly, the agencies that use tiered pricing are more profitable than those that use a blended rate.
As a small agency, you’ll be able to charge a lower rate since you normally have smaller overheads. But don’t sell yourself short. If your expertise can match that of a larger agency, you’re essentially providing the same value as they would.
An appealing strategy to many smaller agencies is to create fixed-price website packages. For example, the simplest website will be $499 with very limited options and a templated design, while the custom eCommerce site will be $5000+.
(Note: These are prices that I’ve seen, but I don’t recommend any business website be sold for less than $3,000 in the US or a similar market. If it doesn’t have a higher value than that, it’s unclear what the purpose is in the first place.)
The packaged offers are effective for communicating with smaller businesses that don’t have much experience in ordering marketing services, and that want a predictable cost and result.
Showing a demo of a premium theme and saying “this is what you’ll get” could be the most effective way of closing a deal with them.
Less frequent, but highly effective for scaling fast, is to offer higher-rate retainers with no upfront cost to a website.
“Pay $499 per month and get a website for free” is also an approach that is typically attractive to clients that are not tech-savvy and want a guaranteed solution that is hosted and supported by their agency. By communicating the value that a high-converting website is providing every month, it’s possible to show a great return on investment month-to-month.
The total lifecycle price quickly surpasses that which had been paid when purchasing a website upfront, but the value and risk could look more attractive in the eyes of a buyer.
Keep in mind that this strategy will be tough for your cash-flow and liquidity until you have a large portfolio of retainers.
Underquoting to sell more digital marketing services
The final strategy that we see a lot is from agencies that mainly focus on digital marketing services. For digital marketing agencies, website projects are a necessary evil to be able to get good conversion rates on the paid advertising campaigns they run for their clients.
For digital marketing agencies, website projects are a necessary evil to be able to get good conversion rates on the paid advertising campaigns they run for their clients.
The website projects don’t have to be profitable since they only make up a small part of their business.
If you run through the Inc. 5000 list of the fastest-growing companies in the US, you’ll find that most agencies on the list are focused on digital marketing and talk little about website projects. But they still need to offer them. We know for a fact since we work with some of these agencies.
Another reason to underquote website projects is to win new clients and get a foot in the door to offer other services. If a business decides that their website is outdated and needs a redesign, they’re likely to move the other marketing services to whoever wins the website project.
Scoping a website project
Regardless of your strategy for how to quote your website projects, it’s a good idea to figure out how much time you’ll need to put into it.
Most agencies will draw from experience, but that’s not always a guarantee that they end up with a good estimate. Make it a practice to create a breakdown of the hours needed from each role.
I’ve seen agencies spend anywhere from 4 hours to 12 weeks to create web designs for a typical 10-page WordPress website. That’s a wide range.
If you tell your client that the design will be custom made and high-end, and especially if you have their CEO or founder involved, there’s a good chance you’ll find yourself closer to the 12-week side of the range than the 4-hour side.
However, if you’re offering more or less templated designs, or if you have a client that doesn’t care too much about design, then you can get away with 4-12h of design work.
My two recommendations are:
- Learn how fast your designer is
- Set clear expectations with your client regarding how many iterations are included in their price
The fastest way to stop the change requests from coming in is to tell them it will cost extra. In the words of agency consultant Karl Sakas, it only takes 7 magic words to prevent scope creep: “Would you like an estimate for that?”
The fastest way to stop the change requests from coming in is to tell them it will cost extra.
As long as you stay away from custom eCommerce behavior and API integrations, estimating the time to code a WordPress website is pretty straightforward. Each page template will take around 2-12 hours to code depending on how many sections it has, the functionality, and the complexity of the designs.
You can read more about this in our article on estimating web development time.
As a WordPress development agency, we don’t see so much the content creation part of website projects. It’s normally handled by the agencies we work for after we deliver the websites to them.
However, if your agency is doing the copywriting for your client’s new website I would recommend that you use the sitemap to figure out how many pages you’ll be writing as the basis for your estimate.
If you’re not writing the content, expect this stage to be the bottleneck for closing out the project. I have lost count of how often I hear agencies talk about waiting for their clients to provide the content they need.
Last but not least, make sure to consider the time you’ll need to spend on project management and client communication. Failing to charge for management time can hurt your profit, and if you don’t you’ll need to make up for it with a higher hourly rate.
Website quote template
We put together a version of our website quote template that you can use to create your own. You can download or copy this Google Sheet.
By now you should have a good idea of what to consider before you quote a website project. To figure out exactly what rate to charge or how to estimate the time needed to complete a project, check out the links provided in this article and the recommended further reading below.
Your niche, overhead costs, experience, and sales proficiency are a few of the factors that affect what rates and timelines will apply to your agency.
If you want to take the guesswork out of your development costs, check out our Adobe XD to WordPress service where you get fixed-price quotes based on your design files (also works with PSD, Sketch, Illustrator or other design formats).
Recommended further reading
Calculating Profits at a Creative Services Agency (Peter Kang)
Agency Pricing and Hourly Rates (Video by The Wow Company)
Custom vs. Productized Services: Pros & Cons for Agencies (Karl Sakas)