We get this question all the time. Our typical response is to ask the caller, “How much will you spend for your next office or storefront. This is a good analogy. You could get imported white marble or finished concrete floors. You could get standard or energy efficient windows. T-1 line? Signage? Triple net? Shelving, cabinetry, furniture? Do you want a steam room or ping-pong table? Your hardwood floors could be double or triple sealed.
The point is that the cost of a web site (or anything, really) is totally dependant on what you want and need. Down to the last detail. As you would expect the price to change as you change the detail and requirements to your brick and mortar office or storefront, so you should expect the same from the company building your online office or storefront.
A web site can be a simple, static HTML page or could be a full-featured content management system that can generate hundreds of interrelated pages …or something even more customized. It could have a full database structure that manages your customer data with auto-email features and the capability to group customers by location, date, etc. And it could output reports for marketing campaigns. Your Web site could have an ecommerce system that is highly integrated with your off-line point of sale system to include warehouse management and multiple channels for reporting, trend analysis and a variety of communications tools. Do you want a Flash website developed in Flex with an AIR multimedia interface for your customers? Or do you need a very basic graphical template design? It could be viewable on hand-held devices and/or on any number of monitor screen resolutions. It could be compatible with any number and versions of browsers.
The cost of a website has a broad range that depends entirely on its functional and technical specifications.
Let’s take a simple contact form. Easy, right? Not so fast. There are a lot of details that go into the simplest online form. Here are a few questions that we consider when a client wants a contact form.
This small example makes it clear that even seemingly small tasks require some definition; the web developer needs to know requirements to formulate an estimate. And, of course, the cost of this work will be in proportion to the volume of work required from the developer. To create this simple form it could cost $50 or $500. Until there are established requirements, the costs are uncertain.
“Ok, so how much for a simple website?” Believe it or not, even after we have tried to be clear about the need for established requirements we still get that question. So, today we will go even further to illustrate how much a simple website might cost by breaking down some of the tasks and time involved with getting a person from ‘how much does it cost’ to ‘cool, I have a web site.’
The numbers will vary significantly depending on location and market. So, we will take what the AIGA 2006 Salary Survey shows as the median salary for those that get involved with the creation of a website. For a very ‘simple’ five-page website, we’ll imagine that the client has already prepared a requirements document that doesn’t need any revisions. Let’s just say there is no Flash development or multimedia components. Let us also assume the company logo has already been prepped and does not need any work to integrate into the website design. We’ll suppose there were only two minor revisions to the initial graphics design work and site layout. We will also presume there were only few hours of meetings and phone conversation. In addition, we’ll only include 4 hours of editing content, all of the images purchased and usage rights secured.
By the way, the situation outlined here has never, ever been set up so nicely in the 12 years we’ve been doing this… but just for the sake of demonstration, here’s what only the labor cost matrix might look like:
|Salary||Hrly Rate *||Hrs||Total|
|Owner (oversight and contract review)||$95000||$62||2||$154|
|Marketing/Project Director (contract management, team management, meetings, phone calls, testing, reviews, etc)||72800||48||8||352|
|Web Graphic/Layout Designer||55100||40||8||264|
|Web Developer (coding in CSS and HTML only)||57000||40||10||400|
(* assume the average billable time per person per year is 1428 hours)
We see that the labor costs are $1512. However, if web developer charged their clients only labor costs, they would not be in business very long. There are two other charges necessary in order to stay in business: overhead and profit. 65% of labor costs for agency overhead (such as insurance, taxes, office supplies, computers, network maintenance and equipment, ISP, rent, utilities, etc.) to a tune of $853 and then add 25% for a modest profit margin, totaling $328.
A little about how much a web development company makes: on this example they only realized a $328 gain to their business. Yeah… that’s all. That is, provided they’ve billed every minute of their time – which is rare – so, the ‘real’ net gain is usually less than the calculated profit margin.
Ok then, the cost for a simple five-page website with many very generous assumptions could be around $2500. But is this what a five-page website costs? Probably not – there are many assumptions we’ve made here, and we don’t have a requirements document to review from which we can calculate the actual work load. So, as mentioned earlier, the cost depends on what you need.
Not discussed are complex websites that involve the generation of hundreds of pages, one or more databases, multimedia production, image and branding development, tons of content, multiple forms that need to be validated and brought through business process flow discussions and diagramming, and lots and lots of client meetings and phone conversations.
Another question to ask is, “How important is your company image in a very competitive marketplace?” We have touched on the technological needs of your “storefront” but have not addressed the branding, the image and message you want potential customers to remember. Your Web site is your face to the world. It communicates who you are and what you do. It says, without words, “this is the type of company we are” with its use of imagery. We have seen people overlook this aspect of their marketing and Web site (let alone their other marketing tools) because of expense. Many of these companies decide (or are counseled by other professionals) to seriously consider developing an image unique to their company and type of services. Why would Coors Brewing Company stick with an image that looks like Budweiser? Shouldn’t their logo, signage and Web site reflect their values, their quality and their unique standing in the marketplace? Remember, consumers have short attention spans. They are bombarded by hundreds if not thousands of advertising images each day. So, how important is it to have a unique professionally designed image for your company Web site given the competitive nature of the marketplace?
Some people have said to us, “that is really expensive!” Developing a professional Web site with true marketing power is more than just a person with a computer in their basement or snatching templates made in India off the Internet. It involves many different skill sets, a considerable amount of management, equipment, software, and lots of interaction with the client. Yes, it is expensive to run a 'real' professional web development company.
You could spend less. There are templates you can purchase which will not be unique to your company image. There are many out there who offer you an inexperienced and underdeveloped skill – for less, of course. You can always spend less if you wanted to hire less experienced, less responsive, less equipped, less stable and less proven companies. But therein is the risk. And – here’s a gem that can save you in ways you can’t yet even imagine: typically money saved on the less expensive route is spent later in rebuild costs, damage control, lost sales, and reputation recovery.
If you are considering a Web site for your company, remember, there are many factors that determine cost. There are many solutions available to you. The one that is truly right for you is worth investigating beyond the facade of initial costs. In the final assessment, it won't be about the money you spent on your webiste, it will be about the profit gained.