Lowball Design Pricing

When I first started out in this business, I needed to build a portfolio — and fast.  So I offered several companies a new website (design and development) for $50.00.  I thought these small companies and in some cases, entrepreneurs, would jump at that opportunity — not even give it a second thought.  I mean, even if I didn’t deliver a fantastic website for them, they only lost $50, right? 

Except, nobody took me up on that offer.  I followed up with phone calls and emails, and they all said the same thing… “Thanks, but no thanks”.  It took me almost a year to figure out why that offer didn’t work.

Fast-forward a few years later, and my prices for website design start in the thousands – very competitive with the industry.  Yet, on occasion, some “lowballer” out there will outbid the job at 1/10th of the cost I provided.  A client will come to me and say “This guy came in at under half of what you’re charging. We have to go with him.”  If the project is for a very small business, sometimes I lose out to the lowballer.  This is almost never the case with larger companies though.  With established larger companies, they follow the traditional 3-bid rule.  These companies will then throw out the lowest bid and pick from the top two (which usually are relatively close in price to each other).  Why do they ignore the lowest bid you ask?   It’s because they understand the value of good design, and if the design company doesn’t value their own work enough to price it accordingly, then how can the hiring company take them seriously.

Lowballers operate on volume.  They need to win every job that comes there way — their survival depends on it.   A reputable designer though, will carefully consider each project, determine if both the company and project fits within their mission and company framework, and take on only those projects that they believe can help both the design company and hiring company. 

Unfortunately, lowballers don’t see this.  Creative consultant, Leslie Burns-Dell’Acqua, says it best.  “They don’t seem to understand the value of, well, value. But it shouldn’t be that difficult of a concept. For example, when you buy a car you know that a BMW is going to cost more than a Kia. Why? Because the BMW is a greater value—it has a higher resale price, it has a good reputation and will last, it’s better designed (both inside and out), and it gives others the impression that you are more successful. For that value you pay considerably more than for the Kia.”

Heres a great “Lowball” ad.  How many of  these websites will he have to do to make a living?  Will he be around next year to still “maintain” your website?

Clients aren’t stupid—they want to save money, of course, but they also understand that spending money for value is a good business decision.  If they’re spending $50,000 on an ad campaign, they understand that the design had better be compelling, appropriate, targeted, and deliver the results they’re after.  For a designer to only bid $2,500 on the same project clearly demonstrates that they don’t understand the value fo the ad campaign nor the value of their own work.

Price-shopping is responsible, but it’s also only just one factor in choosing the right designer for your project.  There is so much that should go into a design project to ensure its success.  To name a few; consistency with company tone, target-centric, relatable, appropriate media selection, fit into overal marketing campaign, etc.  And let’s not forget the business-end of things, such as liability insurance, errors-and-ommissions insurance, fiscally responsible operations, professional project management and scheduling, etc.  All of this is on top of the talented designers and developers that put your campaign together.

As for lowballers, there will always be a place for them — and they might even stick around for a year or so if they get the volume they require to survive.  Afterall, I started as a lowballer too — that is, until it was time to close up shop or start valuing my work as much as my clients did.