Toward a Better Pricing Model for Digital Services
After estimating hundreds of projects over the years we’ve found pricing one of the most difficult aspects of working in digital services, and the one thing that pits clients against firms rather than truly be partners.
Here are four observations:
1) Estimates are almost always wrong.
Somebody loses in this process and it’s usually the client, because the firm has to pad the estimate to account for unknowns, or go back for overruns.
2) Typical flat-rate or hourly pricing do nothing to hold firms accountable for their work.
Our pay-as-you-go model means that you can fire us at any time. We have to stand by our work.
3) The difference between good and great is often just time.
We have long been committed to servicing non profits, human rights and cultural firms, which means budgets are tight. We’ve realized that everyone we worked with had ongoing needs, but budgets didn’t always allow for taking our work from good to great. Everything we do, not just our pricing, is to bridge that gap and to bring best-in-class work to organizations we value.
4) The best way to manage complexity is to break it down until it’s simple.
In response to these ideas we developed a simple pricing model that allows you to scale up and down to your needs.
Here’s what we’ve done to address these issues:
- We’ve been working for years to hone our web development and design process to be as efficient as possible.
- We’ve put together a set of software that is also very efficient to work with both from a process standpoint as well as cost.
We pass that savings on to you.
We’ve analyzed years of data on the time it takes to do a wide variety of tasks to understand what they cost and have developed a general model of pricing. That model also takes into account the efficiencies we’ve gained from our workflow mentioned above.
You’ll find on our pricing page a base rate of $2,600 per month and everything is a multiple of that amount. Even though we quote prices in months, we think of our price as a unit, so you could conceivably have two or more units in a month, or a half-unit in a month, depending on the amount or complexity of work you need done, or increase your plan to increase velocity. Everything flows from there.
In fact, even if you have a set budget, you can easily see if we fit for you, because you can assume that your project is:
- really small: 1-2 units (we rarely do these except for our author product).
- small: 3-6 units.
- medium: 9-14 units
- large: 12-24 units
We also offer lower level maintenance plans for periods of inactivity. After a period of time frame, some, but not all, of our clients scale down to half-unit per month, or even at a low maintenance rate to keep tech support, and have us at the ready for special projects or to address ongoing needs.
We’ve decided that to be long-term partners with our clients, we would absorb the unknowns and risk losing money in hopes that we will be working with you year-in and year-out as your organization grows and changes. We want to be a part of your success, and we believe our pricing model commits us to it.