How I use 2 pricing strategies in my website proposals to charge more

Fraser McCulloch - Thursday, June 01, 2017
website proposal

I use 2 pricing strategies when research and write website design and development proposals that help me charge and earn more for my work.

I called these pricing strategies anchor pricing and I have 2 examples to show you.

Anchor Pricing Strategy Example 1 - Car service website

Anchor Pricing Strategy Example 2 - Recruitment website

I believe many web design companies, digital agencies, web designers, web developers and independent freelancer should adopt this strategy regardless of whether the project is a simple or advanced custom website design.

We need to go beyond design and code and actually write a business proposal with a business plan to help the client reach their goals and objectives.

This is no magic wand website proposal software or template

You can use Word, Google Docs or layout the proposal with software such as Qwilr but your client is looking for a better tomorrow or a solution to his product.

And nothing beats writing a business proposal demonstrating you know his market and how to take him from today to tomorrow.

Why websites are priced too low by web professionals

Every web designer has put a low price into a proposal, at one time or another in their past, in order to get the customer’s business.

I am just as guilty as any other.

  • We under-estimated what the client really wanted or needed.
  • We assumed the client had the content and research done before needing a website.
  • We assumed the client has a good product or service proposition and knew the strength or severity of his competition.
  • We assumed the client would make fast decisions.
  • We assumed that once the client had the website up and running then they would spend more money with us.

Proposing a low price for a website actually hurts the client’s business short and long term.

We, as web professionals, work in a feast or famine cycle and cash flow is absolutely king.

So, at times, we have had to submit to a low price to have money coming into our bank account.

But that hurts Mr Client.

By lowballing the client we skipped the most important parts about the client’s business.

We ended up designing and building a website and did not create a platform that generated awareness of their brand and products or leads and enquiries for their services.

I pay a company 3 times more money than it’s nearest competitor and I get 100 times more in return

There’s normally a reason why some products are inexpensive; they’re not very good.

I pay the same amount of money each month for membership for a prestigious golf club; the golf course has the same number of holes as the nearby golf clubs but the value I get is immeasurable.

Download "How to write a website proposal

Enter your name and email to download my guide on how to write a website proposal

Questions to ask a client before you write a website proposal

I follow a systematic questioning process with clients before I get involved in a website project and it goes like this.

  • What do you charge/average order value?
  • What are the consumer, or end user benefits of your product or service?
  • Who are your competitor and the alternative product or service end users use?
  • What’s your value proposition?
  • Why do you need a website designed (re-designed)?
  • What is the goal or objective of the website?
  • What is the website visitor to enquiry conversion rate?
  • What percentage of enquiries convert to sales?
  • Then I do search query volume discovery.
  • Then I do keyword research to identify easy to rank keyword with high volume and low difficulty.
  • Then I analyse with competitors pay for advertising.
  • Then I am in a position to develop and send a website proposal.

Back To Top

Anchor Pricing Strategy Example 1 - Car service website

anchor pricing strategy

Let me explain how I use anchor pricing in website proposals.

I got a referral from golfing buddy last year.

The prospect told me he re-tunes car engines.

I know little about the ins and outs of cars but I know how to develop and market products and services online.

We scheduled a phone call.

What do you charge/average order value?

I asked about the price of his service or what his average order value might be.

He told me he charges £300.

Easy to question to start with !

Consumer or end user benefits

I asked how knowledgeable people were about the service.

Then I asked about why people used his service or worked with him.

He told me about 2 main benefits of his service.

Car owners get a faster spec and a more fuel efficient car.

Competitor and alternative product/service questions

Then I asked why car mechanics don’t offer this service.

He told me this is a specialised area that most car mechanics don’t offer.

He told me that car manufacturers keep the engine speed optimal; they don’t ‘tune’ up to the level his service provides.

So in order words, he’s tweaking a 120 bhp car to a 140bhp car.

So then I asked him what the difference was between buying a 120bhp and 140 bhp car straight out the car showroom was.

About £3,000.

So now I have the consumer value proposition

To buy a better spec car costs an extra £3000 whereas his engine tune up costs £300.

Why a website design (re-design) question

Then I asked him again why he wanted a new website.

He told me he fell out with the company he started.

I asked him why he fell out with the company he started.

They had neglected their website and the number of leads he received were declining each month and year.

Goal/Objective of website

So then I asked him what his goal was for a new website.

Ideally, 1 paying job per day he told me.

1 job per day x 30 days per month x £300 a job = £9,000 per month or £108,000 per year.

So I knew the goal or core objective for his new website.

Website Visitor to Enquiry Conversion

He told me that his previous company charged him each week for web enquiries.

£120 a week for leads.

I asked how many leads he received each week for his £120.

30 per week 2 years ago.

Now it’s 15 leads per week in a good week.

Or 4 leads a week in a bad week.

So this is great information about his marketing and sales costs.

He is used to paying for business leads.

He is used to budgeting £480 per month or £5760 a year.

I have a client in same industry with a website that converts 4% of visitors into enquiries.

Website Enquiries to Sales Conversion

He told me the conversion rate of leads or website enquiries to sales was around 20%.

(he told me some of the reasons for the low conversion that we could fix if we went ahead with the new website.)

So in my website proposal I would highlight an improvement on the previous 20% of web enquiry to job ratio he was experiencing up to 50%.

That’s 30 sales per month.

Website traffic required each month

Now I am armed with his average order value.

I know his business goal, previous website enquiry conversion rate and sales conversion rate.

Now I can estimate the website traffic required.

Therefore my new client would need around 1500 visits per month.

Now I know the traffic required to meet his goal, but does the search volume exist ?

Search engine volume discovery

Is there enough search volume to achieve his goal ?

First I looked at his competitors and could see how much traffic they were getting from Google.

Do they get more than 1500 organic visits a month ?

I can see 2 competitors; a strong competitors get 9700 visits and a weaker website gets 1300 visits each month from Google.

The latter website gets 1300 visits from 192 referring domains; earning that number of backlinks is hard work but achievable; in my experience, in 6-9 months.

The next way to discover if there’s enough search engine volume to meet his business needs is to find a likely search query prospective customers would make then look at the website traffic of lower ranked websites.

In order words, look at the less successful websites to see how they perform.

And it is generally best to undersell the client expectations.

I picked a keyword relating to the client's services

"car remapping" gets 1600 searches a month and it has moderate keyword difficulty.

Then I looked at a website ranking in position 8,9 or 10.

The company Avon Tuning is at position 9 for this search result.

It has a below average domain rating yet gets 632 visits to their page even though it is only at position 9.

Then I looked at their competitors that have decent level of organic search traffic and have a low domain rating and a small number of backlinks.

Looking at competitors with good organic traffic and a low domain rating and a small number of backlinks tells me there are opportunities to rank a new website in months, not years.

This competitor gets 1400 visits a month, they have 109 links to their website and an average DR (domain)

Next I analysed their top pages and looked at searches with high volume and low keyword difficulty.

Keyword Research - easy to rank keyword with high volume and low difficulty

For the next analysis I look for easy to rank keywords by first looking at some top ranking websites.

I can review this top pages and see their best performing pages.

What's the top search result they rank for?

What traffic does each page gets and how many keywords does that page rank for?

Or I can filter by easy to rank keywords.

Then I can look at another top website.

I am reverse engineering competitive pages as a strategy to try and reach the 1500 visits this client will need.

Advertising analysis

I then use the cost of advertising as an anchor against my website proposal price.

What is the market value of getting those clicks from paid for advertising?

If a business wants guaranteed website traffic they pay for it; they advertise; they pay for clicks to their website.

Google offers an advertising service and to guarantee you get visitors to your website you’d have to pay Google the going rate; that is about £2 per click for this industry.

So the client needs 1500 website visits per month to reach his goal.

The cost per click averages £2.

So £3000 per month is the market value the client would pay for 1500 visits to his website.

My revenue estimate calculated earlier for 1500 visits was £9,000 per month - (30 jobs x £300).

His cost per new job is £3000 divided by 30 jobs = £100 per job.

That’s a fairly high cost per sale; but acquiring customers costs money one way or another.

To put this clearly, it would cost the client £100 to get a new customer that pays him £300.

(£2 per click divided by 4% (the website conversion rate) divided by 50% (the enquiry to job rate) = £100).

Would he pay £100 to get a new customer ?

He was previously paying £120 per week for leads.

On a good week, 15 leads with a 20% conversion rate works out at £8 a lead and £40 per sale.

On a poor week, 4 leads with a 20% conversion rate works out at £30 a lead and £150 a sale.

My proposed cost per new customer of £100 lies somewhere between what he was previously paying.

So my business rationale is fairly accurate.

£3,000 per month or £36,000 is the market price for this website

The market value for this website is £3000 a month or £36,000 per annum if I can generate him 1500 organic visits a month to reach his business goal.

I then anchor against my price; my price could be £2000 a month or £24,000.

It will take time to build links to his website and website traffic during the first 6 months.

So he will likely need to boost traffic with Facebook advertising or Adwords until his new website earns the trust of Google and backlinks are built and search traffic kicks in.

Hence why I would not charge the full market value price.

Monthly content creation

The client needs great page content built around the keyword research I do.

Once I’ve found a relevant easy to rank search query (with lots of related searches) it normally takes me 2 days to research, write and produce one high quality web page.

Today website owners need to write 2000 or so words on a page if they want their page to rank for multiple keywords, be authoritative and helpful for the user and Google.

Monthly link building work

The client needs strong, relevant and industry relevant links built back to his website; since backlinks are the number one ranking factor.

I tend to specialise in broken link building and I typically can earn between 5 and 20 links per campaign.

These campaigns require me to find a broken page, find the name and emails address of those who link to the page, re-create a page of content and do a couple of outreach email campaigns.

That’s takes around 4 or 5 days work per campaign.

So to achieve the 80 referring domains that one of his competitor has will take me 4 or 5 months of consistent link building.

Download "How to write a website proposal

Enter your name and email to download my guide on how to write a website proposal

Back To Top

Anchor Pricing Strategy Example 2 - Recruitment Website

OK, let me give you the next example of a start up business (a recruitment company).

Let’s follow my questioning and discovery process step by step again.

  • What do you charge/average order value?
  • What are the consumer, or end user benefits of your product or service?
  • Who are your competitor and the alternative product or service end users use?
  • What’s your value proposition?
  • Why do you need a website designed (re-designed)?
  • What is the goal or objective of the website?
  • What is the website visitor to enquiry conversion rate?
  • What percentage of enquiries convert to sales?
  • Then I do search query volume discovery.
  • Then I do keyword research to identify easy to rank keyword with high volume and low difficulty.
  • Then I analyse with competitors pay for advertising.
  • Then I am in a position to develop and send a website proposal.

What do you charge/average order value

The average salary in their industry is £50,000, and a recruitment company typically earns 17.5% commission when they find and place a candidate for their hiring client; that’s £8750 of revenue.

Consumer/End user benefits

The client operates in a particular niche of the recruitment market; that being experts in data protection recruitment.

Competitor and alternative product/service questions

Plenty of competitors including the major recruitment job websites in the entire industry.

Value proposition

Since the client “wrote the book” on their specialised area they believed they had a competitive advantage.

Why a website design (re-design) question

I asked them why they approached us and they told me they wanted to work with a web company with experience in recruitment web sites.

Their current website was built on WordPress and since data protection was an issue, hosting their website with a reliable brand such as Adobe, that was PCI and data compliant, would meet their security needs.

I’m sure there are particular security measures a web developer could take for a recruitment website build on WordPress; I guess it’s simply a perception issue the client had.

Goal/Objective of website

Their objective was to place 100 people in a job in a year; 8 per month.

So 8 jobs per month x £8740 x 12 months = £839,040.

Website Visitor to Enquiry Conversion Rate

The client had no history with visitor traffic or enquiry rates so I had to use a case study from another recruitment client; 4% of visitors apply for a job vacancy.

Enquiries to Sales Conversion

Most recruitment websites are going to attract a lot of candidate applications but only one person can convert into a “sale”.

So I used the enquiry to sale conversion rate = 21% to get to the revenue goal of £839,040.

Website traffic required each month

So the website needs 950 visits per month to reach their goal.

Yes you read that low traffic figure correctly.

Search Engine Volume Discovery

So let’s see how we can discover if there’s enough search volume to meet the client’s goal.

First I started with a generic industry search query: “gdpr”.

There are 9200 searches per month for that terms and the keyword difficulty is high; 66.

The client website has a domain rating of 40; so ranking content without page links or on the strength of their website is highly unlikely.

But I looked at some of the other websites in the top 10 search results.

The weakest website is position 5.

It has a domain rating of 60; that’s fairly high and authoritative.

Their page has 13 referring domains.

Their page about ‘gdpr” gets 212 visits and ranks for multiple keywords.

With the client being an authority in this topic, the first piece of advice would be to write and publish their authoritative article about ‘gdpr’ and then reach out and gain more than the 13 links the  website shown above has.

That could earn them 20% of the monthly organic traffic they require (212 visits divided by 900).

But my research also requires me to find “vacancy” related searches.

So I wrote down all the job titles that they expect to recruit for and started my keyword research process.

Keyword Research - easy to rank keyword with high volume and low difficulty

I took all these job titles and ran a keyword search report to find out the total search volume.

25,000 searches a month for these types of jobs.

95% of those searches result in organic search clicks.

95% of these searches have very low keyword difficulty (0-20).

Next I ran a report on the search volume, keyword difficulty and the click estimates.

I excluded the search query “data protection” since the keyword difficulty was too high for a new or low rated domain to rank high for.

There are 2217 clicks from organic search from just 8 job roles.

So the client would need to create powerful web pages for the 4 categories of role; strategic, senior, management and administration roles in their industry.

Write in-depth what hiring employer need and are looking for in these types of roles; at the very least they should be written 2000 words pages; if they really are experts this shouldn’t be a problem to produce this type of content.

Advertising Analysis

The client needs 950 visits per month.

From my research and screenshot below, let's assume the average cost per click is around £4.

So that’s £3600 per month of market value advertising required to get the traffic they need.

To meet their business goals they need to spend around £3600 per month or £43,200 per year.

Website design proposal pitch

As per the previous car service example, the market rate is £43,200 for the website traffic needed to reach their business goals.

£43,200 investment to return the projected revenue of £839,040.

Alternatively, since they are in a start up mode and don’t have £43k to invest, I can use a different anchoring pricing strategy.

If I charged the client £8750 for the web design and development they would need to place 2 people in first month to get a return on their web investment.

So I can anchor revenue from 2 candidate placements (2 x £8750) against £8750 for the website project fee.

And that’s actually how I priced the website project a couple of years ago.

Monthly content creation

However, the client needs great content on their web pages built around what people search for.

The research, creation and development of high quality content still takes time to get ranked.

Once I have found an easy to rank search query (with lots of related searches) it normally takes me 2 days to research, write and produce one high quality web page.

Today you’ll need to write 2000 or so words on a page if you want it to rank for multiple keywords; around 95% of search queries have less than 50 searches a month.

For example, I have a web page about business ideas that ranks for more than 500 search terms, I’m not even on the first page of Google, yet I get around 450 organic visits per month.

Monthly link building work

The client needs strong, relevant and industry related backlinks built.

Developing and implement a link building campaign to build up a website’s trust and boost page positions takes time and effort.

I specialise in broken link building and I typically earn between 5 and 20 links per campaign.

These campaigns require me to find a broken page, find the name and emails address of those who link to the page, re-create a page of content and do a couple of outreach email campaigns.

That’s takes around 4 or 5 days work.

So to achieve the 80 referring domains that one competitor has will take me 4 or 5 months of consistent link building.

One off website project fee versus monthly recurring fee

So adopting a pricing strategy as a one off cost, as opposed to monthly fee including ongoing content creation, advertising and link building may not be in their best business interests.

Download "How to write a website proposal

Enter your name and email to download my guide on how to write a website proposal

Back To Top

How to use my website proposal pricing calculator

I have created a website proposal pricing calculator below.

You enter the following:

  • Average order value
  • Website to enquiry conversion rate
  • Enquiry to sales rate

You then slide the traffic bar until you reach the revenue goal you require.

Summarising website proposal projects

Doing business online has become incredibly competitive.

For a business getting a website designed and built then leaving it and hoping it will work for them just doesn’t cut it anymore anymore.

Consumers now inhabit social networks taking their attention away from Google.

However people still use Google and YouTube to find answers to your questions and problems more than ever.

Whilst getting ranked high and traffic from the search engines is tough my job is made easier by producing great relevant content and encouraging others to link to it.

Many businesses have given up on this as they don’t see the long term value.

And that’s your opportunity; serve Google, give end users content that helps them and the businesses website will get rewarded with visits from Google.

You need to find opportunities, you need to create great content and you need to build great links and you can’t do this just once; it has to be done consistently every month.

Summary

Anchor pricing is without doubt the best strategy for pricing a website for clients.

My process helps clients discover the extent of the market place and competition and what they need to do and sets real expectations of budget and possible results.

Back To Top

Download "How to write a website proposal

Enter your name and email to download my guide on how to write a website proposal


Get in touch

Fill in the form below and let me know how I can help.