Why you don’t necessarily get what you pay for, and how to turn this to your benefit

Lots of you have posted to this blog saying things like, “You get what you pay for.” These posts are in response to my sharing with you the trials and tribulations of finding reliable web design/development services at low prices.

This entry explains why you don’t necessarily get what you pay for, and how you can turn it to your advantage as a web professional.

Imagine a graph with QUALITY running across the X axis and PRICE running across the Y axis. Let QUALITY mean whatever it means to your clients: results, speed, creativity, more business, better image….

Now imagine that you populate this graph with price/quality data points for every web design/development professional out there.

If you get what you pay for in this business, then the line formed should be narrow.

But I know from experience that it is not. The “line” is a very wide scatter plot. Some people charge way too much relative to their quality (and get their price). Some people charge in proportion to their quality. And some people charge way below.

My goal when I buy web design and/or development services is to find the professional who does not charge in proportion to their quality.

There are lots of you who have placed yourself in that category. I call you the “low pricing self-esteem crowd.” I love it when I find these people, because I get great service and professionalism at a very low price.

How does this apply to you? Well, if you are in the “low pricing self-esteem crowd” you need to get better at pricing your services, communicating your value, and persuading your prospects that they’d be crazy to pay less to somebody else.

Yes, in general, there is a relationship between pricing and quality. But it is not a perfect relationship.

You are selling the invisible, not a car with a set package of features. Wouldn’t you rather be on or above the price/quality line?

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  • jmdaviswa

    Not to be too picky, but I think you mean to say “X axis” and “Y axis”; not “access”.

  • aneitlich

    Fixed. Thanks.

  • http://www.bittime.com transio

    Andrew,

    I don’t mean to be derisive, but if you know full-well the breadth of the quality/price curve, why do you feel it necessary to complain about the quality of work you receive when you get what you pay for (as per your previous entry on this subject)? Personally, if I were you, I’d be happy to get on average a bit more than I pay for and leave it at that. Obviously everyone can’t give you more than you pay for or the basis of the curve would go up. The burden is on you to find the resources who can give you better quality for a lower price. Your last blog entry seemed a bit haughty, like it was the burden of the web design community to raise their quality/price ratio.

    Anyhow, I’ve blabbed enough on this topic. :)

    - Steve

  • drakke

    I think the line is wide because:

    1.clients are generally uneducated about what is good quality
    2.there are no tools/methods available for the *average* person to evaluate a site

    However I have see some sites that look very professional and anybody ignorant of web design will also find them professional also. So I do not think we are selling the invisible. It is very visible and if it looks good and performs well it will show.

    Also I read this blog to learn about how to improve my business and so far its just great. Companies who recognize quickly when things are going wrong and make corrections will always do better.

  • http://www.warpspire.com Brak

    I think this kind of lies in Vegas terms. Sure, you may not get what you pay for, but when you’re looking for that “wide” section of curve there’s a good chance you’ll hit the bottom of the line, and not the top.

    However, I feel as price goes up, the line gets thinner. If you pay good price, you’re almost guarenteed good work (what you pay for), but as the price goes down, the line becomes wider and more unsure of itself.

    I suppose it’s all gambling in the end. Also for your low-pricing self-esteem people, I agree… but on the other hand let’s look at it from their point of view.

    1. These people are generally younger and have no means to charge high prices (people wont pay them).

    2. The little bit of money they get is a great amount to them.

    In the end, the client and the designer are happy. I say let them charge small amounts. In the future when they build up a reputation and work becomes easier to find, they will raise their prices. It’s a lot easier to high-bid a job when you have 3 on the table as opposed to high-bidding a job when you haven’t had work for 3 months.

  • Bobby

    I have read Andrew’s griping about poor quality services a few times now. I will say this — if you are having so many problems with vendors you are either spending too much money, or you are a terrible client.

    It goes both ways. Clients vary in quality, too, and the good clients who pay good prices usually get good services.

  • aneitlich

    Bobby (and others who I am having trouble connecting with on this subject),

    Please understand that the blog is a sort of alter-ego for me.

    80% of the service I get from web developers/designers is fine. And they would tell you that I’m a nice guy who pays on time, gives clear feedback, and is more knowledgeable about what he wants than most of their clientele.

    But in this blog I stand for excellence. Understand? I want to see readers far exceed the quality of service out there, and raise the bar for the industry as a whole.

    So I hope this response helps to clarify my point of view in a softer way.

    Plus (alter ego speaking again): Some of you get it, and some of you are so uncoachable and thin skinned that you don’t even know whether you are delighting clients or not — and you are too insecure to find out for sure.

  • JMorrow

    Shhh, don’t let this secret out! :-) You’ll reduce our prey… err… vendors.

    But it’s true. I markup the work from my subcontractors by 300-500%, and I’m still selling below the prices of my competitors.

    You can really get into economics here, but it’s always possible to get more than you pay for. Consider consignment shops and other discount stores. Exact same principle.

  • http://www.tswinteractive.ca/ Pavel_Nedved

    I agree completely with what Andrew’s said, and Brak’s explanation. I’ve found the problem with these so called “low self-esteem” designers isn’t so much that they aren’t confident in their work, it’s more that they fear that if they charge too much, nobody will buy. Most web design firms’ websites say, “contact us for a quote”, or something along those lines. The firms that do post their prices, usually (and I’m generalizing here) are the lower priced, less experienced firms. These young designers have problems determining a ballpark for the going rate of pay, so they are forced to guess.

    As I mentioned before, they fear that if they charge too much they won’t sell, and the only information they’ve received is from less-experienced firms which they have to assume is the going rate. They know they have very little experience, so they guess a timid price far below what the less experienced firm priced.

    Ok… if you could follow that (I probably rambled it out of making sense), here’s ther formula for how I determine pricing:

    1) Pick a reasonable number for how much money I want to make this year…say $50,000.

    2) Add my yearly expenses to that – being in web design, they’re very low. Approximately $2,500 marketing, $1,500 new computer, $1000 office supplies like ink, etc. Total: $5000. $50,000 + $5,000 = $55,000.

    3) Divide the number by 50 weeks in a year – we take 2 weeks away to account for holiday/sick/laziness. Now we’re at $55,000 / 50 weeks = $1100 – the ideal weekly earnings.

    4) Divide by the number of hours you work per week. For me this is about 25, so… $1100/25= $44/hr.

    Hope that helps someone.

  • Tim

    You’re absolutely right Andrew, there is no perfect relationship between price and quality. Has nobody here heard of a low-cost leader strategy? It certainly is possible to provide good value and quality work for people’s money without price gouging and one can still make a comfortable profit.