Pros and Cons of Package-Based Pricing for Web Design

Pricing services is one of the most challenging parts of being a designer. Most designers have an opinion of what their time is worth and what they want to make on an hourly basis, but accurately estimating everything that will be involved with a project and how much time it will take can be very difficult.

In attempt to simplify pricing for both the designer and the client, some designers and agencies use package-based pricing with prices listed on their website. While offering proposals or quotes for each project is more common, package-based pricing is used frequently enought that it warrants consideration from the designer or agency.

In this post we’ll take a detailed look at both the pros and cons of listing your prices publicly. It may be worth noting that Vandelay Design does not use package-based pricing, although this has not always been the case. A few years ago packages were listed on the site before deciding to price projects on a case-by-case basis.

Pros of Package-Based Pricing:

1. Gives Visitors a Clear Picture of What to Expect

Many visitors and potential clients really have no idea what to expect in terms of how much they will need to spend for web design and development services. In some cases this is a result of a lack of experience in dealing with the subject, but another contributing factor is that prices can vary so drastically. If a client is looking simply for a low-cost provider, regardless of the type of project there will always be someone who is willing to take on the work (not necesarilly qualified) for a fraction of what most of the competition would charge. This variance in pricing can make it difficult for clients to know what is included at that price, what quality of work and customer service they will receive, and how this compares to their other options.

Clients like to know what to expect, and package-based pricing can give them the general information before they even contact the designer. If the pricing is out of their budget they can move on to another designer, or they can re-consider what they are willing to spend. Clients can make comparisons much easier with package-based pricing, assuming the details and any potential add-ons are clearly provided.

Pros and Cons of Package-Based Pricing for Web Design

2. Inquiries Will be “Pre-Qualified”

If your website lists the prices of your packages, chances are those clients who cannot afford your services will not take the time to contact you. In this situation, most of the inquiries you receive from potential clients will be of a higher quality because they know about your prices and they are interested (“higher quality” is used here to mean that leads should convert to sales at a higher rate). Of course, you will still get some emails from people who want to see if there are any lower-priced options available or even from people who did not notice the prices on your site, but in general it can help to reduce the amount of time that you spend responding to people who are never going to pay for your services.


Pros and Cons of Package-Based Pricing for Web Design

3. Saves Time Compared to Pricing Each Project

Developing a quote or an estimate can be a time consuming process. You can’t make an accurate guess without knowing basic information about the client and the details of what they are looking for in the project. You’ll also have to estimate how long it will take you to do each aspect of the project and any costs that you may incur along the way. All of this data will be used to make the estimate.

Creating proposals or estimates takes up a lot of time that you could be using to do other things, and offering package-based pricing can eliminate a lot of that. Clients can evaluate the packages that you have to offer and they can decide if it’s a good fit for their needs. It’s possible that you can get started with a client without spending much time at all on priliminary things before the work is secured.

Pros and Cons of Package-Based Pricing for Web Design

4. Allows You to Define Exactly What is Involved and Included

Most designers and companies that list package-based pricing on their websites will include a list of everything that is included with each package. This can be helpful for clarification purposes, from the perspective of both the designer and the client. It’s not uncommon for designers to run into issues with clients where there is some confusion about what is included in the service and what will need to be charged an additional amount. Package-based pricing can help with this situation by clarifying up front. It can protect the designer from scope creep and it also gives the client confidence that they know specifically what they are paying for.

Pros and Cons of Package-Based Pricing for Web Design

5. Allows Clients to Have Options

When package-based pricing is not available and a client gets a proposal or a quote from a designer, they may feel like it’s a take-it-or-leave-it situation. In most cases the designer could probably reduce or increase the scope and price of the project to suit the client’s needs, but this is not always communicated or undestood. Package-based pricing makes it clear to clients what their options are, and they can easily compare the various packages offered by a designer to determine what meets their needs.

Cons of Package-Based Pricing:

1. Reduced Flexibility for Pricing

The main reason that most designers and agencies do not use package-based pricing is that clients and projects are all unique, and this usually requires some flexibility and customization in the pricing and scope of the project. Package-based pricing attempts to put projects into a specific box. Sometimes this works well, but many times the project will have unique characteristics that make it impractical to use a set pricing strategy.

2. May Reduce Number of Inquiries Due to Sticker Shock

Many clients, particularly if you are dealing with small businesses or non-profit organizations, will have unrealistic expectations regarding what they are expecting to pay for web design and development services. When these people see prices listed on your website they may immediately leave if it seems to high, without even examining the details to see what is included as well as to take a look at the quality of your work.

It’s not uncommon for a potential client to receive a quote that they initially feel is too high, but after looking at the details, speaking with the designer, and checking out some competition, they may decide that it’s actually a pretty fair price. In this scenario the designer has the opportunity to clarify the details of the proposal and to pitch it to the potential client. The client may wind up being happy with a price that they initially would have passed up if they had seen it listed as a package price.

3. It’s Difficult to Create Packages if You Offer a Wide Range of Services

Many designers and agencies offer a wide variety of services. Package-based pricing is really only effective in situations where the majority of projects can fit into certain classifications. If you are offering different combinations of services (such as logo design, web design, business card design, SEO, etc.) to your clients, chances are they will not fit into a specific package. The more types of services you offer, the more packages you would need to provide as options, and this can simpy become too overwhelming for clients when there are more than just a few options.

4. Can Be Intrepreted by Clients as a Cookie-Cutter Approach

Clients like to know that their project is important to you and that they are receiving a service that is customized to meet their needs. Package-based pricing can sometimes lead them to feel like they like they are being forced to take a cookie-cutter approach rather than to have their specific needs addressed within the project.

5. You May Still Wind Up Doing a Lot of Custom Quotes

When I used package-based pricing in the past I still wound up preparing a lot of quotes because things just didn’t always fit with one of the packages. I imagine this is also the case for many others who use package-based pricing. While offering packages can certainly save some time in this area, it will not elminate the need to be able to provide custom estimates.

6. Competitors Know What You are Charging

In my opinion this is not really a big deal, and it’s probaly less significant than the other factors listed here, but it’s still something to consider. Many designers aren’t excited about listing their prices publicly so that all of their competitors can see what they are charging.

Conclusion:

There are certainly significant pros and cons for using package-based pricing. The situation where it is most effective is when the projects you are working on are very similar and there is only a difference in terms of scope. For example, PSD to HTML providers typically offer set prices based on factors like the number of pages being coded and the use of a CMS or shopping cart. Add-ons are then available for specific needs and sometimes custom price quotes can be provided depending upon the needs of the client.

In situations where a designer offers a wider selection of services and one project is vastly different from one to the next, package-based pricing will usually not work very well. When packages are used, it’s a good practice to still offer quotes for projects that do not fit within any of the options.

What’s Your Opinion?

Do you use package-based pricing? Why or why not?

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45 Responses

Comments are now closed on this post.

  • Jen, April 28, 2010

    Great article!

    I tried the cookie-cutter approach (2003-ish) and found all the con’s (listed above) to be true, and reasons to change – quickly! It was very limiting, and counter productive.

    Package based pricing work great for hosting companies, and services who’s deliverables do not vary.

    But not on a product (website) which is developed to meet the unique needs of each client and target to their particular market. This requires flexibility and customizations that defines it’s own scope which is almost never the same as the next client.

    The best approach I’ve found is explain and show what I do… and offer a 1 hour complimentary consultation. Here we get to connect on a personal level, pre-qualify potential customers and weed out the undesirables. ;)

    So far, this has been the most successful strategy.

  • Graham Strong, April 28, 2010

    Personally, I think considering your target market is key when deciding whether or not to provide package pricing.

    For example, if your target market is the small business person who simply needs a “web presence” it can be easier for you and them to have a package pricing scheme. Although every project is different, typically these types of clients will have similar needs so estimating time involved with creating “the average, four-page website” can be fairly accurately done.

    Of course, you need to leave a lot of wiggle room both to show flexibility in your services and to account for more complex projects. But if you make it clear that the packages are a starting point and that other options (and prices) are available, there is nothing wrong with package pricing.

    (In fact I would argue that if done right, you get all the pros mentioned above with few of the cons… Pre-qualifying leads is a big one in my mind.)

    On the other hand if your target market is the corporate market for large, enterprise-level websites, package pricing will not be as effective — nor will it be expected. However in this case, price is not usually as crucial to the project either, and posting any sort of pricing could be counter-productive.

    Bottom line: there is no “right” or “wrong” way to do it (in my mind). You have to find out what works best for you and your clients.

    ~Graham

    • Vandelay Website Design, April 28, 2010

      Jen,
      Thanks for sharing your experience. I’m glad you found a system that works for you.

      Graham,
      I agree, there is no right or wrong way.

  • designfollow, April 28, 2010

    great tips

    thank you

  • Pam, April 28, 2010

    OK, first thing, thank you for looking at BOTH sides in one article. ^_^

    Ourselves, we have looked at package-pricing, and have found that with our wide range of services, and because we completely custom our job approaches to each client, it was a nightmare to try and come up with anything reasonable, or concrete. So – scratch that idea!

    Although per-project pricing does have it’s own drawbacks, we have found this to be our best option, and the most flexible for our clients. It has also given us the added benefit of being incredibly versatile for the non-profit sector where needed.

    One approach I personally like, is including a FAQ section, to address the purple elephant of “How much does custom webdevelopment cost?” . I hope to be able to include a section like this in our website over the next while. If interested, the group Onwired has a great example http://onwired.com/how-much-will-it-cost/

    Pam
    Ryvon Designs

  • Wype Agency, April 28, 2010

    To my mind, this is not the best option for a web agency or freelance. As Jen said, it’s a good way for services that do not vary between customers.
    For a service such as PSD to XHTML, maybe. But everything else must be, at some point, customised. And all the cons you wrote in your article become true. In addition, the same idea can give several different outputs, depending on the budget or features that are added.

  • Rachel, April 28, 2010

    Great Article..Very useful information..thanks for posting

  • T.Scarboni, April 28, 2010

    I like the different types of articles and the information thats given from this blog. You guys did a great job with the tutorials on website creation the last articles and this one was no differ.

  • Chris janus, April 28, 2010

    i considered these exact points when determining how i would go about pricing my services. in the end, i stuck with custom quotes for every project because each project really is unique and has such different requirements and scope.

    i find that good communication really helps avoid any issues regarding scope definition or price flexibility. when i consult customers and/or send them the project agreement/proposal, i spell out exactly what IS included as well as any common services that are NOT included.

    i also make sure customers understand that i am flexible and can work with their budget when sending my quotes/proposals. i break down and price as many pieces of the project as i can in my quotes; if my quote is past their budget, then i communicate further to determine what can be done within their range or at some later point.

  • Lucian, April 29, 2010

    Price packages for web design don’t work really well, as there are so many variables. Instead a price range might work better.
    I priced using the package method, in the beginning, when I didn’t know what to charge exactly, but you quickly find yourself way to limited and trapped in a price.

  • rezyde, April 29, 2010

    I just found using a web designer and sitting down with them was so much better than using a cookie cutter approach.

  • CodeMyConcept, April 29, 2010

    I personally believe (I sound like Miss Carolina…lol!) That providing set packages for the customers is definitely a way to keep things organized, clear and better not only for the designers or even freelancers, but also for the customers: they get a clue on what to ask for and how much such work would be.

  • Eric, April 29, 2010

    I just stumbled upon your blog and I must say it is a great resource, thorough and well written! I will continue to check back with you guys for more great insight!

  • Rhonda, April 29, 2010

    These are some great points. I was just thinking about what I would do as far as pricing goes. As a designer, I agree that you should have at least a price range to give clients because packages are hard to do when you have a lot of options. Yet different things work for different people. Thanks for sharing. This is helpful.

  • nyca, April 30, 2010

    Thanks for posting, very informative ! :)

  • Anthony Alexander, April 30, 2010

    Very good article. I need to do some research into my price plans as right now it’s based on a multiple of the current price of my favorite liquor. I promised I’d slit my wrists if I ever felt the need to state “prices as low as”or “starting from” but then again that’s what I said about Mexican whores. I won’t take it personal, it’s just business. . Arrrrrrrrribbbaaaa

  • media designer, April 30, 2010

    @Jen That’s great advice. Personally, I’ve found most of the cons to be pros – such as reducing the number of enquiries. Prequalifying, for me, is essential and worth few tire kickers.

    • media designer,
      I agree with you that fewer inquiries is not necessarily a bad thing.

  • Donovan, April 30, 2010

    The problem with providing pricing up front is always scope creep. Inevitably the clients requirements change or they want an individual touch which requires a redesign from your “package” which means a custom solution. It is always difficult to supply a base price for design.

  • LocoMind, April 30, 2010

    Wow expensive prices for Web Design. But then again, you are paying for the name, and quality!

  • уеб дизайн, April 30, 2010

    Great article as usual!

  • Zuphix, May 1, 2010

    Although I agree with most of you that a predefined package pricing is not the best when you offer a wide range of services, we have come to the conclusion that most of our customized projects start with same features and needs (research, layout, design,coding) so we have designed “Internal” predefined packages as starting points that help us prepare and deliver a quick proposal to the client. We only add the additional features that a client would need in a more complex project.

    So it is good to be open to a more kind of a hybrid pricing structure.

  • Allan Kent Pedersen, May 1, 2010

    Package prices can be a good thing if it is quite clear what the costumer gets for the money so a package consisting of common tasks can work well together with individual priced tasks which gives(lets be honest) the possibility to have different prices depending on whether the customer can afford it or not.

  • yunussvrr, May 2, 2010

    media designer,
    I agree with you that fewer inquiries is not necessarily a bad thing.

  • website design bristol, May 2, 2010

    Great balanced points of view.
    Also agree with pre qualifying, saves a whole lot of time and hassle.
    Who has a set of qualifying questions they use at the outset? Recommended to do a list of some.

  • Alex, May 3, 2010

    great article with a nice balance by looking thoroughly at both sides!
    I must say that I agree with Jen. As most of my clients so far are individuals who are just starting their company, they would probably be put off by package prices in the first instance, because they are not aware of the work involved. That’s why I prefer to send my clients a questionnaire in order to gather more information about their projects before having a 1 hour consultation session. After that, they have a better understanding and value the work that I do for them better.

  • Jen, May 3, 2010

    I’ve been following the comments, and have appreciated the different opinions.

    Those given by website developers who’ve been in the business any length of time still seem to be the most insightful.

    @ Allan… I’m curious what you’d consider a ‘common’ task in website development?

    The only thing I came up with was the installation/configuration of the CMS website solutions I offer (Joomla & WordPress)

    Even this can be far from common and predictable.

    i.e.: A client required me to install Joomla! CMS on a ‘cheap’ hosting company. Something that should have taken a few hours dragged on and on, on account of this hosting company’s poor server configuration. SO… even the most ‘common’ of tasks have the potential of major scope creep.

    @ media desiger @ Vandalay – I don’t think the point is to reduce the number of inquiries, but to increase the number of inquiries – qualified inquiries. Package pricing could work for or against you depending on the client and how realistic your package prices are.

    Letting the client know that the cost of their project hinges on it’s complexity still appeals to most peoples’ common sense, and encourages an inquiry. As we all seem to agree.. the key is to very quickly prequalify each inquiry.

    Your thoughts? :)

  • Jen, May 3, 2010

    @ Alex Excellent idea!!! :D

  • Graham Strong, May 3, 2010

    @Jen – although pre-qualifying is very important, I don’t think it’s the only point. For me, adding pricing packages is a customer service move.

    Many clients want a ballpark figure on how much a website is going to cost. There are many people who honestly have no clue if they are looking at $100, $1,000 or $10,000 for a website — or what that includes.

    Perhaps you have heard it yourself from clients — they go to a website and they are perturbed or perplexed or out-and-out mad because they can’t find prices! They feel like the designer is hiding something, or they are going to be “ripped off” some how. Not logical, perhaps, but that is the feeling that many have. I think you can serve these potential clients well by putting up some sort of pricing structure on your website.

    I don’t think it’s that difficult. You can usually give a pretty good ballpark quote for those clients who want (for example) a four-page brochure-style website. Describe what they get — and what they don’t get — for that price, and I think you can make everyone happy.

    (BTW, the way I discovered this myself is by going over the website design quotes I had given — many seemed to fall into the same range of needs and, not surprisingly, the same price range. So why not cut to the chase and put a “general” website proposal and quote on the table so that they can get an idea of what they’re looking at?)

    As you mention in your question to Allan, some server configurations are whack (I’ve seen some crazy ones myself) and will require extra time. I would not hesitate to mention this to a client, and even point them to a better, more reliable hosting company.

    Bottom line, I feel that for certain target markets it is beneficial to give some idea of pricing, with — as I mentioned above — a lot of wiggle room for “extras” and unforeseen problems.

    ~Graham

  • Good comments and article…I am just redeveloping my website too and agree with a few comments above…knowing who your target market is, is the key. If you’re selling to small businesses and start ups with no money, then packages are a good idea. If you’re after bigger clients then I wouldn’t have prices up there but would focus on showing them what sets you apart from others and whats in it for the client.
    I think a flash based Q & A would be good that takes people through various q’s before giving them a ball park figure on what they can expect.

  • Web Templates, May 3, 2010

    Sometimes sticker shock helps separate the wheat from the chaffe on custom work, not necessarily a bad thing ;-)

  • Some good arguments for both approaches.

  • Nina Anthony, May 4, 2010

    I’m a search marketing consultant for a non-profit economic development organization that provides SEO consulting to small businesses. I’ve found that the pros and cons mentioned in this post also apply to pricing optimization services.

    My organization currently uses the package-based pricing for our SEO consulting services because the majority of our clients are small businesses who have existing sites with a minimal number of pages that require optimization “after-the-fact.”. These clients generally have no idea what SEO involves and what it costs and would shy away from sites that don’t provide them with an idea of what they will get for their money. Since our for-profit competitors in the SEO industry tend to charge much more than we charge, we feel it’s important to advertise our more affordable pricing designed for small businesses.

    However, we make it clear on our website that optiimizing a site isn’t a always a one-size-fits all situation. When we meet with a client for the first time, we are usually able to assess whether or not a client would fit neatly into one of our packages. If, for example, we encounter a client who is in the planning stages of a new e-commerce site with hundreds of products and pages, we make it clear that a custom quote is required. In short, I think it’s best to offer both packages and custom pricing.

  • Daniel Watson, May 4, 2010

    Fortunately we have had a lot of luck when it comes to fixed price deliverables. I think a lot it has to do with the fact that we can quantify our deliverable in a way that makes sense.

    The first post on this thread hit it on the mark when they said that you can’t offer fixed prices when the deliverables change so quickly. Thats one of the reasons we stripped design from our offerings and focused on the development. It is much more definitive when it comes to pricing.

    One recommendation I’d make for anyone is to consider what they’d have to change in order to make the deliverables fit into a mold….

  • florida web design, May 5, 2010

    We’ve used the “Per project” pricing structure for many years. Definately your sticker shock con has been an issue. We are considering packaged-pricing. Good article!

  • robt, May 6, 2010

    Great idea for a post.. I’m constantly struggling to decide weather to use pre-defined packages or not.

    I think if you are approaching each project differently there should be a unique quote for each one.

    If using a CMS (wordpress, drupal) I guess using a base price would be sensible. The process would be pretty similar each time.

  • Jonathan, May 8, 2010

    I’ve read all of the comments but I haven’t found anyone mention just the use of base prices on their website to provide an initial ‘basic’ price so that they know at least, the minimum they will spend for a custom-designed website. As the demands and complexities increase, so will the price. The difficulty of course will come with the additional pricing so there is a trade-off.

    Any thoughts?

  • Dietmar, May 11, 2010

    Thanx for the article, I think the best way for pricing is a mixture of modular and fixed pricings: Presenting the visitors some pre-made packages they can choose from together with the possibility to add or remove some modules (like SEO issues).

    But what about you? Aren’t you afraid of showing the prices to other competitors? I mean, knowing what you are charging for a service can help the others to decrease their prices for getting a visitor to a customer…?

  • McKinley Media Group, June 19, 2010

    This is a great post. I have been thinking about post pricing for years. I think starting at pricing is a great idea.

    Thanks

  • The Marketing Manager, July 11, 2010

    Comes down to quality and time and effort placed in. When the proposal is evaluated, and discussed with clients – its best to provide the BEST possible price.

    There are companies which are under-charging, although are providing expenses that a client will need to get (such as hosting, emailing) and over price those other services – or extra templates or work that needs to be done for client.

    Its wise to confirm and read all the terms and conditions with how these companies work that are already on the net. I found that alot of companies have provided a ‘template – do it yourself” and customers have come to us and couldnt do it themselves and had difficulty. These are traps.

    The best way to find a ‘deal’ is by shopping around – and getting a quality approach by getting the consultant to come through and understand what your business is. Get them to see how and what you do, then back back with a a quote.

    Once you assess the effort placed – then this is a way to evaluate and ask questions!

    For example: we offer an assessment to clients, going into their business (big and small) and providing them with a report on what they are doing thats absolutely great, and whats a waste of money. the best and effective way to save and what works. Keeping it clean and effective for the clients, then provide a reasonable realistic price thats personalised.

    Ali Gungor
    The Marketing Manager

  • Chris, October 14, 2010

    We are just starting out doing websites from scratch. Most of our past experience is working within an already-established site complex. For now, we have very little data on how much time/expense some of the basic tasks take — for instance, writing copy, designing simple custom themes, setting up forums, etc.

    So we’re going with a strategy of offering two basic packages: one simple, one expandable. When we talk to clients we make very clear which things are included (our brochure says them too).

    We also make it clear that we’re willing to swap some tasks for other tasks — for instance, fewer pages overall, but we’ll set you up with Google ads. Other things, we simply tell the client that’s not included but we charge X dollars an hour and can come up with an estimate for extra features. We don’t have the experience to tell just yet how well this will work.

    We too have spent too many hours trying to install a Drupal site on a cheap host. We won’t do this any more. We simply explain that the Drupal CMS has certain requirements, so we will only work with hosting services that we know can handle it. If they want to keep their free-or-very-cheap hosting, we can do an HTML/CSS site for them but not Drupal.

    We have been concentrating on selling whole-site projects so far and not our other services, but I expect we will have to set base prices for some of those too (i.e. print design, logos, editing).

    We will probably want to move to a different system when we have more experience and more data to base estimates on.

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