Should You Cut Prices To Get Business?

My answer is a resounding NO.

Why? We are a service industry and we provide a very good service. Our charges are largely based upon the time we spend to create the project our client wants and our fees are pretty much bang in the middle for a quality web agency (which suggests maybe we should charge more!).

There are some costs that we incur for every web project  namely domain, hosting and usually a small number of stock images. Yes we're not cowboys, if we supply the images you will have a legal right to use them - no unexpected demands from Getty Images or similar, though that has happened on a couple of occasions where clients have supplied their own images!!

Some projects have extra costs incurred such as professional photography, video, animation, graphic design, licensed plug ins, mobile app fees, etc. and these are obviously passed on to the client. Larger projects, e-commerce sites and more complex projects may have significantly higher hosting fees due to space, bandwidth and/or security requirements and again price reflects this.

But other than that it's based on a pretty accurate estimate of how long we will spend working on the project - and when we get the price wrong it's somehow never in our favour and we honour our quotes.

Do we ever lose the opportunity to get contracts as we're too expensive? Yes, it's cost us a couple of contracts in the last year since I significantly increased prices. They were both bottom end contracts amounting to a couple of days worth of work. On the other hand, before increasing our prices a year ago we lost a few potential large contracts because we were too cheap and the assumption was that the quality would not be up to standard. We now get more higher end work, same daily rate as bottom end projects but larger longer term contracts meaning less new clients are required for the same return.

Can we compete on price at the bottom end? No. I used to try but when some student is knocking out sites from their bedroom for £100, there's no way we could compete. However, we do get plenty of opportunity for new customers when their cheap option has disappeared leaving them with an out of date site that no longer works properly on a domain registered to the web designer not the website owner. (but I digress).

So why am a rattling on about this now? We recently bid for a smallish website with a local company who got 2 other quotes. I received a call saying we were a couple of hundred pound above the other quotes and if we could drop our price to match they would give us the contract. Now even though we're busy there's a natural tendency to do that to guarantee the job.

My response? After a little thought I simply replied that we give genuine quotes that are not open for negotiation unless an alternative is required that requires less work on our behalf. The quote is what we will charge for the work requested and we would very much like to work with the client, but if they felt that they would get BETTER VALUE elsewhere then we understand and they should make the choice that they feel is the best one for their business. If that isn't us we hope they get a great service from their chosen provider and we would always be happy to help them in the future if we were able to.

The result? We got the contract. It's about the value proposition not the price - taken me 2 and a half years of running the business to learn that lesson!!

So now for a Saturday of watching Matt play in Boro Colts final game of the season, in fact his final Colts game, and then off to watch MFC's last home game via a beer or two in the Star.

Hoping for some exciting publicity next week but I'll bore you with that after the event - should be in Tuesday's Evening Gazette I think.

Another Long Weekend, It's Becoming a Habit

OK This one is a long Bank Holiday Weekend meaning 2 more 4 day weeks, and yes that generally still means doing a full week's work but with only 4 days in the office.

So there's work to do this weekend. This includes chasing up clients with overdue payments, a constant issue, doing some planning, getting the Middlesbrough Midweek Cricket League site ready for the new season with fixtures, etc. online, getting the accounts up to date and doing a few tweaks to the mobile app for the Cleveland Police and Crime Commissioner. Last but by no means least is putting together my 10 min slot for our BNI chapter on Wednesday (and putting the door prize somewhere where I won't forget it this time).

Not all work though. Off to watch Matt play for Boro Colts at Billingham today which will see the temporary return of some of the lads from elite academies as well. Should be a good catch up with some of the parents as well. Tomorrow got a meet up with family and Monday, weather permitting, a walk on the Moors with Jane.

Should be a good weekend.

Was the Long Weekend Off a Good Idea?

The answer is it's in the balance.

On the plus side:

• I got to spend a bit of quality time with Jane which is a rare thing with both our work commitments
• Had a "nice" walk in the North Yorks Moors which is always good for the heart and soul
• A good day out at the pub and watching footy with mates
• A wander around Durham Cathedral which is a beautiful place to visit again and again

A "nice" walk in a bog in the fog

On the negative side:

• There was a shedload of work as an examiner I also had to do which involved early morning and late evenings to fit in
• As always there's calls and emails to deal with even with Peter in the office. It's amazing how many clients choose mobile as their first choice for calling
• I missed 2 days of work which has to be caught up with

On Monday we went to Durham and obviously I turned off my mobile devices as we went round the Cathedral but for most of the day I was answering emails and phone calls. Who is at fault for this? Me! I should just turn the things off and wait until I get back to work.

So this weekend will be spent, in the main, catching up with work - feel like I've not been off! Need to get my head right so that time off is time off. Peter can deal with anything urgent (or mundane) in the office, I have complete confidence in him so why do I worry about answering emails and calls?

Need to get this right for my summer break.

Holiday

I'm having a long weekend off so very brief this week.

What is a long weekend off? Well apart from writing a quote, catching up on some reading, writing an exam paper and two assignments it means a bit of walking on the moors and on Saturday, beer and Boro.

Until next week ...