Clients are used to buying web services on a per-project basis, and your agency's processes are set up for this.
But you are interested in selling website retainers and getting away from piecemeal project work. It's unstable and unreliable from a staffing and financial standpoint.
So how do you price and package your options? How do you sell these type of retainers to clients?
In this whiteboard video, I break down a number of different options and ideas for you to consider when pricing and packaging your growth-driven design website retainers.
How to break up the growth-driven design quote:
- Price each step (strategy, launch pad, ongoing work) separately. This will require multiple quotes, but it will improve accuracy on very large websites.
- Break it into phases, and sell with two quotes: Phase 1 = Strategy + Launch Pad. Phase 2 = Ongoing work.
- Sell the entire process together at a set monthly fee. This is best for very small websites that are easy to scope.
How to pitch growth-driven design:
- Pitch and quote both the traditional website model and growth-driven design. Educate prospects about why growth-driven design is a better approach, but let clients decide which package they would prefer.
- Pitch growth-driven design and educate prospects on why it’s the best process and why it’s all that you do.
How to price the ongoing services in growth-driven design:
- Break down your process for each step in the cycle, and estimate time for each stage.
- Price your retainer, which at a minimum should be $1,500 per month. A more realistic retainer range is $3,600 to $6,600 per month as you add more hours into the plan.
- Create fast, faster, fastest packages that have more hours for completing more action items each month.
Hi. Luke Summerfield here. Today, we're talking about a few different options and things for you, as an agency, to consider when looking at different ways to package and sell growth-driven design retainers. Now, in this video blog, we're gonna be talking about three kind of different topics. The first one is around how do we look at the overall picture of what we're doing and put together a quote or proposal for a client. So if we take a look at, generally speaking, the growth-driven design process, there's basically three major buckets. The first bucket is the strategy. Again, if this is all foreign to you, you should watch the "What is Growth-Driven Design?" webinar that we have. We'll link to it in the notes below. But generally speaking, you have your strategy. You have your launch pad site, which is kind of the start of your growth-driven design retainer. Then you have your ongoing continuous improvement cycle that you're gonna go through, over and over and over again.
Packaging Growth-Driven Design
So you have basically three different options that I would consider when you're looking at talking to a client and breaking up these different pieces. Now, the option number one, as you can see here, we're going to look at the entire thing and at the beginning of the engagement, so basically when you're going through the sales process, you'll give them one quote or one price, fixed monthly fee, for the entire 12-month duration. Now, this option works really well if it's a fairly small website. When it's a small website, it's a little bit easier to quote. You'd probably be able to get the strategy and the launch pad pieces done within the first month, month and a half, two months. So it's a little bit easier to see the size and magnitude of what you're putting together. It makes it a little bit easier for you to say, "Okay. We can charge them X amount of dollars per month, over 12 months, same price every single month, and be able to still keep the project and all the stuff that we're working on inside of that, within that quote."
The second option you have is to basically break the quote into two pieces. The quote piece number one would be this first two pieces. So you would have one set price for the strategy and the launch pad website. So you would treat that as phase one. Phase one is everything in the strategy, everything in the launch pad site. Then you would give a different quote or an additional quote for the ongoing stuff. Okay. So here's phase one. Phase two is months . . . This would be, essentially, months one. This would be, essentially, months two through 12. You would give a fee for that. Now, the way I would suggest doing it is I would suggest getting them to sign the contract on the set amount here and give them a ballpark range for option two. The benefit of this option is it makes quoting a little bit more accurate because, as you're going through the strategy, as you're building out the launch pad site, when you get to the end of the launch pad site, you're gonna have that laundry list of wish-list ideas. You're gonna have that long brainstorm-to-wish-list idea.
So you'll have a much better scope. You'll have a better understanding of the website, of how it's performing, where they're going. You'll have all of those items that you want to do. It makes it a little bit easier to figure out how much does this ongoing improvement cost. Now, clients want some type of number so they can know, generally, what to expect. So you still want to ballpark it, but let them know, "We'll quote you at this price. This is the ballpark. Once we get out of that phase one, we'll have a much better set-in-stone price." If you feel confident in the amount of work that it'll take for that ongoing, you could set a price right out of the gate. So it's gonna probably depend on the size of the project. A bigger project with more unknowns, you may want to quote this separately. If it's existing clients, or if you kind of know the lay of the land and know how much work something may be, you can set a fixed price for that. Now, the third option is to break each piece . . . break it into three phases. So you have the strategy as a phase, the launch pad site as a phase, and the continuous improvement as a third phase. You would set specific quotes for each one. Again, what I would do is start with a set fee for the strategy, no matter who it is, what client it is. This is how much our strategy costs.
Pricing the Launch Pad Website in Growth-Driven Design
Coming out of the strategy, again, you'll have that big wish list, which will make it more accurate for quoting how much the launch pad website will be. Again, still want to give a range. Then coming out of the launch pad, it'll give you a much better idea of how much the continuous improvement is. So coming out of the strategy, you would essentially give them another quote. You would finalize the quote and the proposal for the launch pad site and the continuous improvement. Now, there's pros and cons to all of these. Again, it may depend on ... It's probably gonna depend on, one, how comfortable you are with this program, and then, two, how much you know about what work needs to go into the client. Again, option one is probably better-suited for smaller websites, maybe a local dentist or law firm or something that's fairly a smaller type of website. Option number three would be probably the best for accurate quoting on a really big project. So if you have multilingual, if you have tons of sub micro-sites within it, if you have a really big e-commerce site, things that are really, really big, you may want to break down into little bit more bite-size pieces, so that it makes the quoting a little more accurate.
So that's kind of the benefit of this piece, is that you get a much more accurate quote. Make sure you're not going out of scope on some of these early pieces, and make sure that you're giving them an accurate price for the ongoing and not finding out that you quoted too little. So it gives you a little flexibility. My preference, if I were to start an agency tomorrow, I would use option two. So I think option two is a good middle-ground. The problem is, as you go further down, it complicates the sales process. So it makes the sales process a little harder, a little longer. You have to do multiple quotes and get multiple approvals, which, if you're doing a really big site, that's kind of just assumed as part of a big site. If you're doing a really small site, you can just do the one. So as you go down in complexity of the sales cycle, you do get a more accurate quote, but there's a trade off there. So that's why option two is a nice one, because you can still get a pretty accurate quote and saying, "Okay. This is the price for here. Then here's a price range for the ongoing." Then get them to basically approve that, when you figure out whatever fits in that range.
All right. If you have questions on that, type in the comments below. Would love to help you out with flushing that out. If you're doing something different in your agency, again, type that in the comments below. Would love to hear it and love to hear what other people are doing.
Options for Pitching Growth-Driven Design to Prospects
Second bucket of topics we're gonna talk about in this blog. Looking at how dedicated you are to growth-driven design . . . The reason that I bring this up is there's a few different ways you can position growth-driven design, in comparison to traditional web design. So the first option is to only sell growth-driven design, and that's your focus, and you're really only interested in working with those types of projects. This really goes back to what we went through in the inbound marketing world. So when we looked at inbound marketing, it was like, "Well, are you gonna take on clients that only want SEO or only want email marketing? Or do you want to focus in on clients that only want inbound marketing and the full breadth of features and only the retainer?"
For those of you who have gone through that transition, there's pros and cons to both, and there's reasons where you may take on some projects that are not all inbound marketing. Same thing happens for growth-driven design. Do you want to do projects here and there? Or do you want to say, "We're only gonna focus on growth-driven design retainers because that's the best for our client results and the best for our agency."? Or are you gonna do a mix of both? So that's a conversation you need to have internally and figure out where you may have some flex or not, but that's the first thing to think about, is, "Are we only gonna sell and only pitch growth-driven design retainers?" The second thing is . . . The second way to go about this is to give the client options. So media junction, who is currently one of our platinum partners, they actually pitch them both through traditional model, and they pitch them the growth-driven design model. They give the client the option to choose which path do they want to take. It's like a "choose your own adventure."
Now, of course, there's a level of education that needs to go on through the sales process for all of these, of why growth-driven design is a better process. So when they're looking at giving them the options of traditional or growth-driven design, they still need to educate them why growth-driven design is a better process that's gonna produce better results and be more agile and flexible and learn more about the users and yada, yada, yada, all those things that we talked about. But that's another approach you could take, is give them a quote for how much will that website take from a traditional website perspective. Right? So maybe the traditional project is $15K. Then give them a quote and explain the process for growth-driven design and say, "It's gonna be an upfront $10K, with $3K monthly ongoing improvement," or whichever one of these options, however you quote that particular option. So that's another way that you can approach it, is give the power to the client. Now, media junction found . . . In a 30-day time span, they had five projects come through the door. I should say five website proposals come through the door. They won all five. Giving them an option of growth-driven design or traditional design, four out of the five clients chose growth-driven design, even though the overall engagement was more, because they understood the value and the impact that growth-driven design has.
So again, another option they have. The other option you have, that I'll throw out there, is you could pitch growth-driven design and decide, based off what the feedback of the client is . . . If they say, "No, we're not interested in doing ongoing every month. We don't want that," then to retroactively go back and say, "Okay. Well, let's look at what we could do for doing this same project, but in a little bit more of the traditional methodology. So that's another option, probably not the best. I would probably recommend sticking with those top two, but again, that would be another option. You always can go back to what they're used to. If they're not comfortable with it, they don't get it, maybe they have to get other buy-in, and it just complicates things way more. Again, if you're open to doing traditional web projects as well, you could pitch them growth-driven design, see their reaction, and you always have that fallback option of the traditional.
Now, the last thing I want to mention here, I put it as a little reminder on the bottom, is that you don’t necessarily have to pitch them all these steps. So let’s say they just launched a site. They have a new site, three months ago. Maybe you just launched a site for them, or maybe they were working with another agency, maybe their existing clients. So this is where up-selling into growth-driven design retainers happens. You don’t need . . . You can do growth-driven design with the existing site. You just would probably only do little pieces of this, and then you would get right into the continuous improvement. Okay? So just keep that in mind as well. Now, one thing that I would probably just like to talk about really quickly is . . . The approach you take may depend on the client and how comfortable the client is, as you’re talking about this through the sales process. So what we’ve been finding is clients that live in the tech space, software companies, positively hardware companies, tech companies. They totally understand this continuous improvement model. So you may want to go directly pitching growth-driven design.
Now, if you’re going with a more manufacturing or something like that, that’s not to say you couldn’t talk to them about growth-driven design and why it’s better. Kind of gauge how their interest levels are, if they get it, if you see those little light bulbs going off in their head. Then you can go for growth-driven design. But if there’s any kind of, “I’m not sure. They don’t seem to get it,” you can always go with that option. So this may be fluid, depending on the prospect that you’re talking to. All right. The last bucket that I’d like to talk about is what size ongoing engagement are we talking about. How do we quote? And how do we think about the ongoing relationship? Now, it’s probably gonna depend on which one of these three options you go with. If you go with option three, you’re gonna have a lot more information to work from, to get a more accurate ongoing quote, depending on how fast they want to go or how much they’re working on it. Same with option two. But here’s some food for thought. Here’s some things to think about, internally at your agency, as you’re thinking about how do you package this thing.
Pricing the Continuous Website Improvements Retainer
So if we look at the continuous improvement model, we have the planning phase, develop phase, learn phase, and transfer phase. If this is all foreign to you, take a step back, go and watch the “What is Growth-Driven Design?” webinar, again, in the show notes. Otherwise, this should seem pretty familiar.
So when you look at the steps of the planning phase, looking at the performance versus the goals, doing some additional user research and quantitative research, brainstorming, talking to the client, talking to the marketing and sales team, there’s kind of a minimum amount of work that needs to go in. If I kind of was just thinking about me going through this process, at a minimum, you’re probably doing three to four hours’ worth of work in this planning phase. Right? Just an hour of brainstorming, an hour of meeting with the sales and marketing team and the client, an hour of doing some additional research and kind of mapping out your sprint, what are you gonna accomplish, prioritizing the wish list. There’s at least three to four hours in this planning phase, and that’s not to say if you want to do additional research. So that’s why I have that plus-research, because you’re always gonna have these scenarios where you need to go above and beyond the information you already have and start pulling in additional research. So there’s always gonna be that piece as well.
Now, the develop phase. The develop phase is really gonna depend. It depends on what action item you’re completing. Is it a copy thing? Is it a complete page redesign? What are we working on? So the develop phase is probably gonna be the one that’s got the most flexibility in it, but generally speaking, I can see it being pretty hard to do anything less than 10 hours in the develop phase. If you think about the amount of time it takes for copyrighting, if you’re doing a design change that requires a wireframe, some clients’ approvals, no matter what that is, there’s probably gonna be at least 10 hours’ worth of work there, depending on the action items. The learning phase is like, “Okay. We’ve collected the data. Now let’s see what did we learn about our user. Now we need to archive that and make that publicly available, and we need to build a report for the client on what we implemented.” So a minimum of one-and-a-half to three hours, depending on what you’re all doing. Again, these are just really general, off the top of my head, what I would think the minimums would be. Then transfer is like, “Okay. We’ve learned this thing. Now let’s go educate the client. Let’s educate the sales and marketing team, give them some recommendations on how they can improve it.” Minimum of an hour to two hours, depending on how much information you have to transfer.
Cost of a Growth-Driven Design Retainer
So when you add all those minimums up, you’re looking at at least 15 hours, to go through this cycle. Right? That cycle . . . When you go through this, it could be going through the cycle for one action item, three action items, 10 action items. It really depends on how many action items you’re trying to implement within this sprint period, what you have in there. Again, that’s where you could start developing as well, kind of different packages, which I’ll talk about in just a second. So the 15 hours. Let’s say hour hourly rate is $100 an hour. Inbound marketing-wise, the industry average is 100 to 150. So we’ll just use 100 to keep the numbers round. So you’re looking at a minimum of $1500 a month for your ongoing inbound marketing, your ongoing growth-driven design retainer. Now the two areas where you’re gonna see some increases and where you, as an agency, should really be trying to push to increase, is the level of research that you’re doing in the planning phase. Right? So the more research you can do, the more you can figure out there’s probably some additional opportunities, depending on the complexity of the site, the size of the site, how many users they have, all of that information. There’s probably some more hours you can put in here, again, doing that initial research in the planning phase.
The second phase is develop. The more hours you put in here . . . This is probably gonna be the phase that you can pack as many hours as you can, because the more hours you put in here, the more action items you can get done. So generally speaking, in the planning phase, if I want to do one action item versus 10 action items, it’s really gonna only increase the amount of hours minimally as I add action items, because there’s only gonna be so much more specific stuff I might have to do. Whereas the develop phase, each action item you have . . . It’s kind of weighted. It has more weight per action item. So this is probably where you want to add some more hours when you’re looking at it. Okay. Another thing to consider is . . . So wrapping that up, $1500 would be the minimum. If I saw anyone who had a growth-driven design retainer under $1500, I would really question, “Are they doing enough? Why is it so inexpensive?” Honestly, it’s probably gonna be more like $2500 minimum, as you add more hours to develop, and you add some more research. It’s probably gonna be more like $2500. But again, gonna depend on the client, gonna depend on what your process is as an agency, but just to give you some rough ballparks on what you can kind of be thinking about.
The other option you have is you could always give, just like we do in the inbound marketing world . . . We have fast, faster, fastest. You could always do three different things. So you’d have fast, meaning 10 hours a month in development, and then the rest of the stuff. You could do faster, which is maybe 20 hours a month. Then fastest is 30. Kind of break it into three buckets, because the more faster you go, the more hours you have, the more action items you can complete, and the faster you can go through, the more things you can complete as you’re going through your cycles. All right. Last thing I want to explain, and then we’re done for the day, is . . . Again, these cycles can span over two months. So if you have something in your action item queue that’s a really big thing . . . Maybe you’re redoing a whole homepage, and you have to do a bunch of different iterations. You’re doing some testing. You’re doing this. You got development.
For whatever reason, their $1500 a month just really isn’t enough hours for you to do it. Again, you could do it in a phased approach and do month one as phase one, month one as phase two. The entire cycle spans over two months. So just kind of keep that in mind. Also, keep in mind that the hours can be a little fluid. There may be some months where you do a little more work, some months you do a little less work. As long as you’re kind of keeping track of what you’re getting done, and you’re showing impacted value of that, that’s okay. So just keep that in mind as well.
So three different buckets that we talked about today, to consider, as we’re talking about pricing and packaging growth-driven design. If you have any comments, questions, or if you’re doing something similar to this or different than this at your agency, comment below. I would love to get a good discussion going on that. Thanks, and we’ll talk soon.
Originally published Jun 29, 2015 7:00:00 AM, updated February 01 2017