A Pricing Experiment

For potential clients, the web design and development marketplace must be like walking through a Moroccan Bazaar replete with monkeys and midgets. Everywhere they turn, vendors are vying for their attention and shouting about the latest web technology and the greatest design solutions and the best deals. Buyers are understandably dazzled and confused by the plethora of choices they confront whilst having to be constantly vigilant against unidentifiable pickpockets.

Over the past few years, I've compiled a list of over 300 people and companies in the greater Atlanta area who offer similar services. I suspect this number is low, very low, and I am willing to bet that comparisons between major markets would reveal nearly identical statistics. 

Atlanta is a tough market during a good economy. I've watched local rates plummet over the past four or five years due in part to the recession, but also due to a staggering overabundance of vendors. Nevertheless, the percentage of truly talented, committed, professional web designers and developers remains very, very small. 

A couple of months ago, I received an inquiry from a company I thought would be a good fit for 16toads and decided to pursue the job. My communications with this potential client were excellent, and I felt very comfortable that I had a good shot at landing the project. The client was also forthcoming about having spoken to two other vendors, one local and one out-of-state.

But I had a gut feeling. 

It is worth noting that both of the other shops I was competing against were familiar names among the larger design and development community. 

I decided to take a chance and conducted an experiment.

I bid low.

A week passed. Knowing full well that I hadn't been selected, I followed up with the client by phone after the deadline they had set for choosing a vendor.

He explained that he was very impressed with 16toads's work and our proposed solution; however, "We decided to go with [the other local shop] because they promised to meet all of our requirements in the initial build and were 'cheaper.'" 

Given a two-month timeline and a laundry list of requirements for the project, which included custom design, CMS development, custom programming, multiple site management, and a wish list that included RWD, I have to ask a simple question, "How do these other companies (my competitors) survive?" 

The bigger question this raises is how many corners will they be cutting to meet the client's requirements and expectations? 

If even the "best" among us are charging absurdly low rates for expansive solutions, we have no right to wonder why our services are so consistently undervalued.