On pricing and value(s)
Let me warn you straight away: this is not my usual short and simple post about intriguing ideas, unanswerable questions, or bite-sized food for thought.
Instead, I’m gonna elaborate on a few inputs I got from my friend Luigi Teschio aka Gigitux about the pricing of my freelance services.
We met last week, thanks to the newly founded social cooperative Hub Porta Nova. We took part in the project Porta inNova as remote workers and hubbers.
Luigi is a cool guy who works as a developer at Automattic. He has many good ideas, and I wish he shared at least some of them on his blog!
Cheap is good, “cheap” is bad
Natural language is inherently ambiguous, and we ended up with the same word to refer to both “low prices” (good 👍️) and “poor quality” (bad 👎️).
I’ll wrap “cheap” in quotes to highlight the “lame factor”, and I’ll refrain from using it in the neutral or positive sense to avoid confusion.
Just to be clear, my main assumptions here are:
- Quality is not an optional.
- You don’t always get what you pay for.
- If you pay more you don’t necessarily get something better.
As Oscar Wilde had it (in The Picture of Dorian Gray, chapter 4):
Nowadays people know the price of everything and the value of nothing.
Pricing low is risky
Over one of our many interesting conversations, Luigi stressed the importance of not being perceived as “cheap” when the value of our work is high.
His arguments were practical, irrefutable, and crystal clear. In a nutshell, his main point is: low prices attract bad customers who won’t value your work.
While there’s more than a kernel of truth in that, I already knew this much when I had to decide what to offer and how to price my services.
So why did I deliberately positioned myself on the mid-to-low end of the scale?
Well, I thought long and hard about pricing. I factored in my values, my target market, and even the risk of looking “cheap”.
Still, I can’t be quite sure I got it right. That’s why I want to expose (just a few of) my reasons and doubts, and I hope to get your take on them.
What I do and market value
I am a self-appointed Simplicity Web Coach, because I simplify people’s web communication through coaching. More about that on my business site.
Let’s talk money: monthly coaching and one-off consulting sessions are about average-priced, though I’m pretty sure they’re more valuable than average.
I also help people make a site for what looks like dangerously “cheap”. I could triple my prices while remaining a sound alternative to some web designers.
The website market as I see it
From my own experience and observation, plenty of web designers:
- Are prone to overengineering, which leads to overpricing.
- Offer market rates but deliver little value to website owners.
- Charge sensibly less than usual but make straight-up bad sites.
That’s why “cheap” gets conflated with poor quality: it’s a fair rule of thumb. Unfortunately, sometimes you pay even more for just about the same quality.
The main issue is a wild misunderstanding about websites and their purposes.
To complicate the matter, there are DIY “solutions” such as website builders. Results usually range from cringe to awful. Plain unacceptable for business.
A metaphor: cars and bycicles
You better buy a good car rather than wasting money on a wreck that will leave you stranded. And you wouldn’t even think of making a car yourself, right?
But what if a bicycle could satisfy all your mobility needs? It’s simpler and usually cheaper than a car, both to maintain and buy (or even build yourself).
While a good bicycle may cost even more than an old used car, they generally belong to different price tiers and anyhow have different purposes and uses.
Sometimes, a bike just won’t do. If you need a car, get a car. But other times, a good bicycle is better than a bad car, yet cheaper (plus, it doesn’t pollute).
Why is everybody trying to sell you a car, without even considering a bicycle?
Why I didn’t price high
Metaphors aside: a good text-based website is generally way better than a bad e-commerce website, yet cheaper (plus, it’s low-mainteinance).
I only charge up to 500 € because I limit my focus to the one thing every site needs: quality information, condensed in a simple page mostly made of words.
Costs are lower when you don’t need a complex technical infrastructure. If you need or want extra features or custom graphics, you can always add them later.
All in all, making up my job title wasn’t enough. I also hope to create a whole new category of professional websites: simpler, cheaper, yet effective.
Back to our metaphor: a web agency sells cars, I help make DIY bycicles.
I feel there is a severely underserved niche of people who don’t need expensive solutions but also don’t want to waste money or time on a poor quality website.
What I may be missing
For starters, I’ve done no real market research. I mostly acted on gut feeling: Experience was and will be my teacher. Surely, I have lots to learn from her.
Here’s a practical issue: as Luigi excellently put it, my work is a multiplier. Thing is, it multiplies quality rather than quantity. And that’s a bit tricky.
It’s pretty easy to show if you’ll get 42% more traffic, or your bounce rate will drop by 42%, or your PageSpeed Insights score will grow. But how about:
- You’ll feel 42% less stressed – can you measure your feelings, though?
- You’ll gain 42% better leads – does it even make sense to quantify that?
- X will earn you more than Y – how to prove it, if you must pick only one?
In business, profitability may be the only benchmark for success. In life, not really. Yet, simplicity can improve both your wellbeing and your bottom line.
Even the benefit of having a site versus not having one at all can feel somewhat intangible, so that any number estimate amounts more or less to a promise.
And yes, impact can be quantified. ROI can be measured. But I don’t really care about that, because all metrics are misleading. Including your bottom line.
Let me quote an excerpt from Leo Babauta’s post minimal web:
Don’t popups and big subscription boxes and other such things that ask the reader to subscribe to your mailing list get much better conversion numbers? Sure, in the short term, your numbers will go up. But those are unimportant numbers. Much more important: How much did you delight the reader? How many readers did you lose because you disrespected them with a popup or screaming in the sidebar asking them to subscribe? How much trust did you lose? Who did you help with this popup? Try measuring those numbers with your analytics.
[…]
How do I know if I’m growing without analytics? You don’t really, and honestly, it doesn’t matter as much as people think. I used to track my blog’s statistics, and when you track something like that, it becomes your world. You care so much about growing it that you do things aimed directly at growing the numbers. And that’s crazy — the numbers don’t matter that much. What matters is helping your readers, delighting them, changing their lives. You don’t do those things by worrying about the numbers — you do them by worry about the readers. And when you do that, the growth comes as a byproduct of being great.
Truth be told, I don’t want to bother with metrics. I’d rather bank on my hunch that quality pays off in the long run, and take heed of Experience’s lessons.
All I care about is simplifying and improving. I want to work under the common assumption that peace of mind and quality knowledge are priceless.
After all, a word to the wise is sufficient. Some people won’t be persuaded even by the soundest arguments, and it’s not up to me to change their mind.
I can only promise what I know I can do for my customers: help them save time, money, and energy. How valuable is that? I’ll leave it for them to decide.
Basically, I’ll just let the market determine the value of my work. If it shows I’m underpricing my services, I might have to charge more at some point.
Which leads to another question: what about my underserved niche?
Well, that’s exactly what Luigi would call a happy problem. And though I have a few answers already, that is quite literally a problem for another time.
Conclusions? No thanks
I’ve only just begun to scratch the surface, really. Everything is still open.
In the future I may change my services, my target market, even my job. Heck, I may change my beliefs altogether. All I know won’t ever change is change itself.
Anyhow, to me it was useful to reflect once more upon pricing. (In fact, I had written twice as much. Then I edited out most of it to spare you my ramblings.)
And I lowkey hope we disagree: if so, let me know! It’s the best way to test our assumptions and values, and we may also learn something new in the process.
Time will tell how it’s gonna end. Meanwhile, I’m ready to question everything.