We were nervous. We had just doubled the price of our base website package.

Would our proposal-to-sale conversion rate drop through the floor?

Hell, would we ever make a single sale at this price? Or, after warning our email list for weeks of the impending price increase, would we have to go back to our old pricing with our tail between our legs?

Basic economic principles would say that the higher your prices, the less you’ll sell. Here’s (oversimplified) what that would look like:

But of course, things are never that simple.

3 Types of Web Design Projects

Let’s not let this post be another post about hourly vs. project-based vs. predefined package (or productized) pricing. There are a lot of those and if you want a good one, here it is.

Instead, here’s a quick rundown of how much you should charge for project-based and hourly web design:

Project-Based

This is a project that you have to create a custom quote and custom proposal for. You’re ultimately giving a price for the entire project and not charging by the hour, but it’s still a custom quote for a very customized job.

Suffice it to say, if you’re doing project-based custom quotes, you should probably be charging at least $10k for the project.

Hourly

This is a very large project where scope is as defined as possible, but still not absolutely 100% clear. You’ll give an estimate of the total number of hours expected, but deliver that with a caveat that things change.

If you’re charging hourly, you should be doing custom development and charging $30k+ for a project and an hourly rate of at least $125/hr.

If you’re doing either of those two projects types, charging less, and your business is growing and scaling, tell me how wrong I am in the comments section. Also, sorry, the rest of this post is going to be no help to you, but some pricing pages that may serve as inspiration for you can be found here, here, and here.

Predefined Packages

This is going to be what the rest of this article is about. Let’s dive (way) deeper into pricing for predefined website and marketing packages.

Creating Web Design and Marketing Packages

Before we can talk about pricing web design and marketing packages, let’s talk about how to put them together. In order to create a package you have to know the following things about your target market:

• What pages and functionality they typically need
• What services produce results
• What their price sensitivity is

Once you know those things, you’ll want to create a package or packages that will serve about 80% of your target market. If you can create a single package that serves that 80%, then you may only need a single package.

However, most likely you’ll need to create 2 or 3 packages to get a good enough fit to serve that 80%. Here’s an example:

Tier 1: Basic

• Up to 10 pages
• 1 Contact Form
• Analytics Dashboard
• Hosting

Tier 2: Advanced

• Up to 30 pages
• Up to 3 forms
• Analytics Dashboard
• Hosting
• Call Tracking
• Monthly Reporting

Tier 3: Enterprise

• Up to 100 pages
• Up to 5 forms
• Analytics Dashboard
• Hosting
• Call Tracking
• Monthly Reporting
• 2 Custom-Written Blog Posts/Month

The above packages bring up an interesting point though. Some of these items are things that can be set up once and then the work is done, like the analytics dashboard and the initial pages. Other items, like hosting and blog posts, are done on an ongoing basis.

Up-Front Website Package Pricing

Most web design agencies only charge up-front pricing. The prospect says they want features X, Y, and Z, the design agency figures that will take 40 hours to make, so they submit a proposal saying we’ll do X, Y, and Z for $4,000 and the prospect either accepts or rejects the proposal.

Wrong.

Without even getting into the fact that you should be charging EVERYONE monthly, which I’ll talk about later, it’s STILL wrong.

Why are you taking time to figure out a custom quote for such a small project?

I did that for a while when I was a freelancer and it sucked. I couldn’t grow my business. I wasn’t getting anywhere.

Don’t make that mistake like I did.

And if you’re already making that mistake, stop now – it doesn’t get better.

Instead, create packages like the above tiers and give each package a price. The actual price that you should charge depends on your market, but a good rule of thumb is to start lower while you build your portfolio and hone your marketing, then raise prices as you build your business and talk to more prospects. That’s what we did with our business, JurisPage, and it worked well.

You’ll want to be aware of people objecting to pricing. You actually WANT people to be objecting to your price point, otherwise you’re leaving money on the table. And you may notice that as you become a better salesperson and your marketing improves, fewer people are objecting to price. This means it may be time to raise prices.

Ongoing Hosting and Marketing Package Pricing

The very minimum that you should be charging EACH and EVERY client on a monthly basis, is $29. And you should only be doing that if you’re a whiz kid at generating leads or if you’re upselling most clients much more expensive monthly packages.

What can you charge monthly for? Here are some ideas:

• Hosting
• A certain number of website edits per month
• A support phone number people can call
• Monthly traffic reports
• Call tracking

If you’re including all of that, you can easily charge $99/month.

And for marketing packages, here are some things that you can charge for:

• A certain number of blog posts per month
• Landing page creation
• PPC campaign optimization
• Search engine rankings reports
• Social media posting
• Link building

For ongoing marketing packages, the pricing is obviously going to depend largely on what you’re providing, but aim for a rate of $500/hour of work.

If that seems high, it is. And you’ll only be able to charge that rate if you’re doing the work efficiently.

But if you’ve figured out a marketing package that provides positive results for a lot of clients, you can dial in the process, you can find great contractors, and you document the procedures effectively, that rate is attainable.

Still, not every client will end up delivering a $500/hour return. But if you’re aiming for a rate of about $500/hour when things go well, you’ll have enough room to turn a profit even when things don’t go as well.

Please, I’m Begging You, Charge Monthly!

If you are:

• Charging less than an average of $15,000 per project and…
• Not charging a monthly fee to all clients

then you should take a long look in the mirror and ask why you like to make things so hard for yourself.

Seriously, what are you doing?

It’s so hard to grow a business unless you’re charging your clients monthly. Sure, you’ll figure out ways to generate more leads over time. But you’re probably not going to figure out how to generate 5x as many leads as the previous year, every year. At least, I wasn’t able to.

But I didn’t need to increase leads in order to increase revenue. Every client was on a recurring monthly plan, so every new client added to our monthly recurring revenue. Therefore, our revenue increased steadily over time.

Take a look at this chart of two businesses.

• New revenue for each business is actually the same each month.
• Business 1 doesn’t charge monthly, and so its monthly revenue vacillates around a single number, $10k.
• Business 2 does charge monthly and accumulates an additional $1k/month in recurring revenue each month

So, by month 12, Business 2 generates $11k more in revenue than Business 1. That’s huge!

The Psychology of Web Design Pricing

At its most basic, this is the best representation of how pricing tolerance (how much people are willing to pay for your services) works in web design:

So that means if you want to charge more, you have to establish more trust with your prospects.

Establishing trust is a topic deserving of its own book, but here are a few ways that we were able to increase trust with our web design business, JurisPage:

• Produce good content: most of our eventual clients were readers of our blog first. This meant they were already familiar with our opinions and trusted us as a thought leader
• Include social proof: your website should have testimonials, a portfolio, publications that have mentioned you, and any other industry-related accolades that enhance your image within the industry
• Ask questions on sales calls: don’t force your solution down the prospect’s throat. Launching into a description of your solution without understanding their problem and, more importantly, how they describe their problem, is a sure way to turn prospects off.

Is trust the only thing that matters? Well, it’s definitely what matters the most in what we’ve seen, but there are certainly other factors that will affect your close rates on the margins:

• Choice Paralysis: don’t provide TOO many options or tiers, as prospects will be uncertain which option is best for them.
• Price Anchoring: that said, you may want to provide more than one option if you’re using one of the tiers as an anchor price. $2,000 for a website may seem like a lot until it’s placed next to a tier for a $9,000 website. Then it’s a bargain!
• Pain Point/ROI: if you relate the cost of your solution to the return the prospect will get for the solution, you can make it seem like a no brainer. However, be careful to include specific and accurate numbers.
• Ending Prices With 9: yes, it’s stupid, but there is actual research that proves ending a price in 9 increases conversions. Ending in 9 vs. ending in 7, from what I’ve seen is inconclusive. My suggestion is to get those extra $2 and end with 9.
• Comparing Prices: you may be tempted to display your prices alongside competitor prices to show that they’re lower. In my experience, this leads to increased skepticism and worse clients. If your price is lower, that’s okay, there’s a bargain shopping segment in every market. But when you are very overtly positioning yourself on price, know that that will decrease trust and get you more difficult clients. That said, if you’re just starting out, the trust you are able to build with clients will likely be low already, so you may have to take on some stinkers in order to build your portfolio, get testimonials, and increase your trust.

Should You List Web Design and Marketing Prices?

Man, I can’t tell you how many times we had this conversation while running JurisPage. Ultimately, we always kept pricing listed and public.

Here are some arguments for listing pricing:

• You’ll get more qualified leads: If you don’t list pricing you may end up wasting time talking to leads that have no intention of paying your price
• You’ll stand out as more transparent: Many if not most web design agencies decide not to list their pricing so if you list it, you’ll stand out.
• It builds trust: Knowing that you’re not going to create a price tag out of thin air during a sales call and that you have the same prices for everyone increases trust.
• You can give a discount to close a deal: If you get a prospect that’s on the fence and you have published pricing, offering a discount seems like a more special offer and so is more likely to seal the deal. Without published pricing, discounting can seem more arbitrary.

Here are some arguments against listing pricing:

• It tips off your competition: Your competitors will know how much you charge, so if the prospect is evaluating you against another company, that company will be able to use knowledge of your pricing to their advantage.
• It can scare people away: There are no doubt people who won’t reach out when they see pricing, but who may have been swayed on a sales call to increase their budget. This number seems small though.
• It doesn’t appear unique: Even though web design in the sub $10k range is fairly standardized (or at least should be), your prospects want to believe that they are unique snowflakes with needs unlike anyone else. Seeing that you have standard packages can make them think you won’t give them the personal attention they so desire.

What should you do?

I’m hesitant to actually give advice here, but I know if you’ve gotten this far in the article you probably want it, so screw it.

In my opinion, if your typical project is under $10k, the pros of listing your pricing outweigh the cons, so list them. This is especially the case if you are productizing your services and can easily show potential clients how much they should expect to pay.

Having an extremely elaborate pricing table with different factors for hourly rate and a pick-list of different elements can be overwhelming and make your prospective clients more hesitant.

But, publishing a simple pricing table will make your life easier.

You’ll be able to spend your time selling to better quality prospects, and you’ll benefit from increased trust so your close rate will be higher. Using time efficiently is huge, especially when you’re a small company.

Conclusion

At the beginning of this article, I said we doubled prices. And actually we increased our base price by another $1000 the year after that. So how did it affect our demand? Truthfully, it affected it minimally, but the small change that we saw was actually an INCREASE, not a decrease in demand:

Does that mean if you increase prices you’ll see the same demand response?

No.

But that just goes to show that pricing psychology comes into play waaaay more than you may think. So don’t be afraid to charge more for your services. And further, fight the reactionary urge to lower your prices back down if you see a drop in demand in the first month or two until you have enough data to really see a trend.

Have any specific questions or disagree with anything I’ve said? Let me know in the comments section.