We do things differently. Instead of concentrating on getting higher paying projects, we focused on accommodating any budget and building up a recurring (almost passive) income through website hosting and maintenance.
Our model has grown out of a desire to protect our free time, but has been made possible due to page builders and easy to deploy cloud hosting. It’s not for all, but looking back to when I was trying to break free from my employment this approach would have made things easier for us.
I’ll start by explaining my journey and end with sharing the benefits of lower budget (say under $1,000) jobs.
The undercharging problem
This is a central theme to many premium courses and events on running a freelance or agency business. I am sure you have seen many adverts on how to win $10k+ website project.
I think the reason that there is a common story to many of us who start offering client websites. We begin building for ourselves and friends. A hobby that gave us a creative outlet and learning challenge, but with the bonus that people might pay us to do it. If nothing else, it’s another string to our bow in this age where job security is becoming a thing of the past.
As we get more serious we realize that clients are incredibly time consuming. They don’t speak our techie language, don’t know what’s reasonable and don’t understand the value. We end up putting in more hours than we quoted for and end up feeling undervalued.
The way forward seems obvious
If we are going to create a sustainable business we need to position ourselves to attract better paying clients. That was the conclusion I quickly came to. Fortunately through connections I already knew there were plenty of clients paying 10 times what I charged for the same skill level.
In fact, I learned WordPress by making an unofficial site for work. When my office official adopted this I estimated the rebuild on their platform would have costed 100 times more. It wasn’t better, they just work with bigger budgets and have more stakeholders to bring on-board.
I also knew that positioning was mostly about mindset. For over a decade I had been training staff in the art of cold calling on doorsteps. In spite of my natural hatred for anything salesy skills I knew I could adapt what I had learned there to sell higher cost websites.
But something else happened
By the time I got serious I was already a digital nomad in Asia. Luckily, an old school friend asked me to help with a WordPress project for a large international company she was doing marketing work for. This turned into a number of projects that paid thousands rather than hundreds I was used too. It was a good start.
Then in an unexpected twist my friend asked me if I wanted to help on other jobs. She had been building client sites since 2000 in her area, but the business had started to stagnate. Now with my WordPress knowledge she had a new offering for her many clients who were overdue a redesign. Mostly because mobile responsive design was taking off.
For me this was a backwards step back in terms of pricing. Most (not all) clients were from a rural area where budgets and awareness of digital was nothing like London. She was accepting work at a lower rate than I charged as a hobby, but she was fabulous to work with and the money would be handy as I move forward with my plan.
Except I didn’t. I got very lazy. The jobs were easy and I could travel around and get lot’s of beach time. Due to our lower cost of living we still managed to earn more that we spent.
I learned much from her too. I was logical and precious about the work. She was a warm-hearted local community person with real focus on giving good service. Objectively, much of the work was far from the best, but we got paid for work I would have rejected and the clients were happy.
Did I really need to go hustling for work? Did I really want to work with higher paying organization like the one I just left? I liked this new lifestyle.
Of course, there were problems too
The greatest problem was that her business was slowing down (again). I can only speculate but I suspect this is down to a few factors:
- A lack of incentive. She was busiest in early days of the web when most businesses wanted to claim their internet space. There was a boost again with the growth of mobile web (where I came in) but newer trends like marketing funnels don’t translate so readily to the average small business.
- The popularity of page builders bringing more competition and more clients doing it themselves.
- She had a niche that was greatly transformed by larger players.(this is something for another post).
The other problems are fairly standard, but can have a more damaging impact on lower budget jobs:
- Famine and feast. Fortunately, I could ride not having work for long periods because we no longer had the crippling cost of living in London, but still they are unnerving.
- Delays. Having too many balls in the air as client dragged out projects they were not paying much for. The constant stopping and starting meant they were taking up more time than we had planned to give.
- Payments. Chasing them. I never has a non payer.
But we also found solutions…
Having held back from going after higher paying projects my focus switched to how better to manage the smaller jobs we do. We introduced:
- Hosting and maintenance. When this became possible I set this up at a low cost and made this the first thing we talked to clients about. After a bit of adjustment the take up since has been 100%. This the famine and feast issue, but has become our main focus. Hosting is a subscription everyone knows they have to pay so there are few issues if the price is not greatly higher than what is around
- Build days. Clients book and pay for days or hours of work. This solved the issues with payment and delays.
- Estimates not quotes. With booked days clients controlled their budget and became more pragmatic about what they wanted. It was like switching a buffet to à la carte.
- Promoting our page builder. For many clients nothing actually changed. They liked the idea of more control, but still pay my wife to update content. What I think it has done is prevent some employees with marketing responsibilities from convincing their bosses to adopt something like SquareSpace or Wix to bring everything in-house.
- A focus on training. Over the years we saw more who thought they could make sites themselves so rather than argue this we encouraged them to do that on our platform. This worked well. They either loved learning more or realized it was best left to us. Either way I felt they got a better insight to our value.
Re-evaluating the traditional model
Since I start I had only been exposed to experts that built (or used to build) websites as projects. This requires a proposition, a contract and a quote large enough to educate the client. Quoting for what is effectively a collaboration put us in the position of having to anticipate their effectiveness not just our own. The model itself leads us to the conclusion that its better to lose the low budget clients.
I now consider the mindset that say you can work with low budget client to be just as limiting as the one that says client’s wont to pay $10k+ for a site.
This is what I have found over my years of taking on low budget jobs:
- They’re profitable. You just have to make sure you don’t give more than they pay for. I’ve turned away clients who could have been served just as well with a one click template site (Astra) and a little page builder support. The chances the client over time will want more and end up paying for the things they did not get originally
- The lifetime value of low cost project can be high. Most of the small local trade sites we have done were only a challenge to on-board. Because of our hosting and care plans they have effective become a passive income.
- The clients with lower cost projects have been the most loyal to us. We become their web guys. Those with the larger budgets see us as suppliers that need to regularly be reviewed. Particularly when new management appears. Those who got used to using our page building (Beaver Builder) were hooked to it.
- The loss of a low budget client has little impact on our business.
- Low budget clients often aren’t what you think. I’m about to do a 7th site for one. As the trust has built up the budgets have grown. Another is considering a more expensive rebuild. That first low cost job was often just low risk entry point for those client who needed time to see the value in digital marketing. They were not going to get their through one meeting
- Low budget clients can be on boarded quicker. There is less formality and less rejection. By adopting more agile approach with the risks are reduced for the client ( i.e. book a day or a few hours ) there is less the think about. I learning better all the time how to get client started on something so the become a customer.
- Low budget clients are easier to find. They’re the majority and if no-one will serve them they will give there money to Wix? It strike me that there is a nice gap appearing as the competition has so much confidence in the “charge more” model.
Of course website pricing can easily become a “race to the bottom”. Many have rightly challenged this and it’s been the driver for many of the courses that focus winning $10k+ project. I am not suggesting at all that we should devalue our skills in anyway or lose confidence in what clients are willing to pay. I am only suggesting that quoted projects is not the only way to work.
With a more “agile” approach to client services I believe you can have a model that allows you to adjust your rates and type of work according to your experience and skill and prevent us from rejecting profitable work. But this is something for another post.