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The website RFP, understand tiers to avoid tears

The website RFP, understand tiers to avoid tears This post is written to give an idea of how the web design industry is structured. It should be of interest to web design companies, as well as to people looking for a web design company to get a better idea of what kind of company to be talking to, what kind of process to go through, and the kind of price range you should plan to receive quotes for when you put out a website RFP (request for proposals).

There are eight main kinds of web design company, ordered roughly by price:
  • Offshore: an individual or team working offshore for low rates, usually as virtual employees.
  • Freelancer: an individual skilled in at least one particular area of web design who will work for you on a temporary contract.
  • Web design service: a company doing very simple web implementations very cheaply in a matter of hours; often an IT or PR company will offer this amongst their range of services.
  • Consultant: for complex projects, often an external consultant is called in, who will recommend multiple other companies to do an implementation together (often one of them being a commercial CMS vendor).
  • Specialist web design company/creative agency: a company specialising in implementing custom designs, but not new programming.
  • Web development company: a company specialising in implementing new code for sophisticated web sites, but not particularly attractive ones.
  • Web design and development company: a company that has the skills of a specialist web design company and web development company (this is what ocProducts is).
  • Full service marketing/creative agency: a company that provides the full range of marketing services, including web design, but also PR, print advertising, market research, TV adverts, and other services. The advantage to a full service agency is you get a single company that can integrate all your marketing, but the disadvantage is the expense of the extra levels of management (which will include some very highly paid senior people), and the chance for miscommunication and misunderstanding between those levels.
It can be really tricky to tell these apart though, many of them will call themselves creative agencies (even freelancers do) and sometimes you really need to read between the lines.

Often companies needing a web site will avoid web design companies entirely and go for one of the following approaches:
  • Set something quick and simple up on a service like Google Sites.
  • Build internally using a CMS and a template. This tends to happen when there's an internal stakeholder in the client company who has a particular technical flair, so it's a bit of an exception.
  • Set up a CMS internally, then use support services to get the more complex stuff done (this is what we do for ocPortal users with our Experts By The Hour support service). Truth be told, it's fairly rare for this to happen because usually a client makes an upfront decision on whether to do something entirely themselves, or to hire someone else to do it all; people rarely go half and half.
  • Build something with a skilled in-house team
Getting complex? All this is before we even consider project tiering.

You can break the industry down into three tiers:
  1. Low end
  2. Mid-market
  3. High end
Each of these tiers operates with a fundamentally different set of rules, because they work with different kinds of clients on different kinds of project.

All the seven kinds of web design company will operate across different pricing tiers, although it is rare to find a company willing to work across every tier.

The low end ($500-$1,500)

The low end of the web design market works with a very “street smart” kind of attitude. It is price-sensitive, with a high focus on driving straight-forward sale conversions, to build straight-forward websites. There tends to only be basic design focus, enough to make things tidy, and very little focus on branding; sometimes use of templates can make this a bit harder to detect. However, there is a great focus on SEO, and providing websites that (like the web designer themselves) work via driving straight-forward sales conversions. In other words, the web design company and the client typically have a similar kind of mindset:
  • keep things simple
  • concentrate on SEO
  • drive sales hard
  • keep the price low
  • because cost is low, and also the earning potential is quite low due to the low-end quality of the built websites, all involved in the market tend to operate quite low on the earning pyramid (with an aspiration to raise higher of course)
For some companies, this works very well. Companies employing tradesmen that do not have a need to particularly focus on brand, and where the website only needs to be pretty simple.

Don't expect companies to properly respond to a website RFP on the low end.

The problem comes when clients expect more than just a straight-forward site. Because the business model of it all is “keep it simple, sell it cheap and hard”, the client with higher expectations will often expect far more than they are buying. This comes from there being such a large range of website qualities out there, and that most people spend most of their time interacting with very high quality websites that cost unimaginable amounts of money to build (such as Facebook). If clients are well educated on the nature of the web industry, it's okay, but if not, they may end up in a situation where they will either drive an naïve upstart web designer to make a loss, or just end up dissatisfied when a sales-orientated web designer won't serve their expectations.

The mid-market ($1,500-$20,000)

In the mid-market, things are done to a much higher quality, and there's much more emphasis on planning, branding and on implementing unique solutions. For most companies, this is justified, because they have an important image and brand to maintain, and the cheap salesy look doesn't work for them. The added process and quality inevitably leads to a higher cost, which makes it difficult for web design companies to explain because Google searches always show web design companies advertising low end prices. People with past experience with web projects tend to know you get what you pay for, but new buyers tend to go with too cheap a company for their first project.

Some companies on the mid-market will do a proper website RFP response, some will not.

Another difference with the low end, is that in the mid-market people tend to be more “solution focused” than “product focused” or “feature focus”. The web design company will usually choose what CMS to use without the client having any idea about it.

The choice of CMS is usually the standard CMS the web design company uses, which tends to be one which is “industry standard”. Employees love this because using a standard gives them transferable job skills. Employers love it because they can plug people easily into training courses and hire people with the CMS on their résumé. We at ocProducts hate it because it keeps the industry locked into non-innovative systems.

The high end ($20,000-$1,000,000)

On the high end things change around quite a lot. Often the web designer will advise to the client a lot more, rather than the client saying exactly what they wanted. The web designer will have to make these suggestions based on experience, as well as by doing extended stakeholder discussions with the client company. Usually a solution will come with a training package for a whole team.

The client tends to be very risk adverse, expecting a web design company who already has many years of experience working on these high-value projects – but they are willing to pay highly for the security they seek. Sometimes it can seem quite irrational just how risk-adverse large organisations can be, and it often comes down to the “nobody got fired for buying IBM” syndrome.

The maturity, brand name, management team, and turnover, of the web design company are of more concern than the particular low-level details of experience and authority. The reason is that at this kind of level, size really matters most, and there is a large amount of management complexity. If the management is mature and experienced, then people on a lower level with whatever requisite skills that are appropriate may be hired as required after a contract is signed.

On the high end, things almost always will start with a website RFP. In fact, Government in the EU is required legally to do this, to ensure they give fair consideration to all bids. Small web design companies need to be careful to realise though that the comparison process will be heavily decked against them, and the chance of them winning this level of work is almost nil.

ocProducts tends to operate in the mid-market. We certainly don't work too deep into the low end because our staff are too skilled to compete just on price, and we have a brand that creates high expectations and too much of a reputation at stake to risk lowering our design standards. We can work on the high end, but because we're a young innovator, it doesn't tend to fit too well to the risk-adversity of the buyers (it's such a shame, so often on the high end organisations guarantee themselves mediocrity, missing out on quality and innovation).

This was article 6 of 8 in my "Web industry Exposé" series of blog posts.

If you think it's good advice, please share this link with others. If you think I'm wrong or have something to say, please discuss below.

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