Article by: Jeff Nordstedt
When contracting with an agency for a web project, most clients prefer the agency to estimate a fixed price to complete the project. The appeal of “cost certainty” is quite strong. However, there are hidden costs to that approach. Let’s consider a few.
Collaboration is Key
More than anything, a successful web project requires collaboration and trust between the client and the agency. At eDesign, we work hard during the discovery phase to identify requirements and obstacles before designing or developing anything. However, even the best discovery process is not a crystal ball. There is always going to be an unturned stone. Even if we ask all the right questions of the right people, things change during the project.
When the pricing model is based on a fixed price, it often is the case that neither side is set up to quickly adapt to changes and new information in a way that is best for the project. Here are a few hypothetical scenarios:
During the project, senior leadership decided to partner with another organization to handle project distribution, and all of the scoped e-commerce functionality is no longer needed. At this point, you have a fixed price higher than what is likely required to complete the project successfully. Often this will lead to everyone looking for features and functions to add to make up the difference. A great user experience is never the result when you start playing with solutions in search of a problem.
A project is scoped to include the addition of a robust thought leadership hub. During the planning (at eDesign, we call it the “Define” phase), the agency and client collaborate on a brilliant content strategy that considers user needs and search demand. The problem is that while the agency is ready to deliver design and development work to support this new tool, the content team client-side has a massive undertaking that involves repurposing content that was previously trapped in PDF or print material and retagging five years’ worth of blog posts to make the planned new tool effective.
The right thing to do now is to pause and think about the value of getting a new site to market quickly. Likely, switching to an MVP (minimum viable product) approach is the right thing to do to get new branding to market before the content marketing initiative is ready to roll out. We have frequently seen clients in this position feel the need to “get all of the websites they can” for the money they have committed to pay. In this scenario, that would result in getting the new brand to market more slowly.
A Different Path
We have found that when we can estimate a monthly spend and combine that with a target launch date or estimated project duration, we can better collaborate with clients on doing what is best for the project. We avoid unintentionally incentivizing clients to get the most website from a fixed spend. We also prevent the need to hold back on innovative ideas or critical efforts for fear of overshooting the budget.
Monthly meetings to plan where effort will be directed in the month ahead and review where time was spent in the preceding month are critical to this approach. Those monthly meetings foster collaboration on critical decisions that could either increase or decrease the size of the project in the months to come based on the value that adjustments would deliver to the bottom line.
With a more flexible pricing model, if we decide that a new idea will likely deliver more critical leads, we can adjust and chase it. If it becomes clear that a planned feature will require more effort than the value it provides, we can decide together to save it for future development or potentially even “kill our darling” to deliver maximum ROI on the project.
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