Many digital agencies are still pricing website projects and selling their services based on a very specific set of features or design elements priced out as lined items. However, best-in-class agencies have learned to position and sell the value of the methodologies they’ve adopted and perfected as a way to engage their customers in the journey of estimating a website project and building a web platform. We refer to this as Solution-Based Selling or Productized Services.
In 2022, as many as 55% of project managers cite budget overruns as a reason for project failure. Other culprits like poor planning and lack of goal specificity go hand in hand with this statistic when it comes to website project estimates.
The Drawback of Pricing & Scoping to Specific Features & Deliverables
Overpaying for Services
Clients may think it’s a good idea to get very specific about what they want in their website, down to each line of code. However, this causes them to start with statistically inaccurate expectations about website project estimates.
If they have a perfect understanding of the features, functionality, and scope that will create the outcome they want before hiring the development team, then they’re overpaying for what a development team is meant for. And that is to bring clarity to the client’s business objective, which includes discovering, testing, and refining site features. They would be better off outsourcing their job to overseas developers for $30/hour.
Conflicts with Clients
When clients have a specific idea in their head about their project that isn’t realistic financially, developers and designers are actively working to reset the customer’s expectations from day one. This prevents them from doing the actual task of building the site and leads to conflicts with the client over inaccurate estimates, micro-management, rapid changing of ideas and objectives on the part of the client, inaccurate forecasts for deadlines, and confusion about the scope of the project.
Not only will clients and development teams come into conflict over inaccurate website project estimates, but often development teams will argue amongst themselves about what the best course of action is when dealing with a client who has unrealistic expectations. When project managers and developers have competing priorities, both parties may feel that they’ve been set up to fail by the unrealistic expectations placed on them by the client.
The extra time they have to spend on this project eats away at the time they need to be spending on other projects, and because labor costs for quality developers are high, the client ends up spending even MORE money on the project than they previously anticipated. This only increases the dissatisfaction from all sides of the project.
Why Projects Go Over Budget
There are a couple of main culprits when it comes to the reasons website development projects go over budget. First of all, teams will conflate tasks or project planning with resource planning and project accounting. This means that teams allocate resources based on tasks on a list rather than the amount of time it takes to complete that task, which leads to a lack of consistency, continuity, and a highly fragmented workforce. This makes the entire project inefficient from the get-go and causes frustration for both the agency and the client.
Over-ambitious estimating is also a cause of inaccurately estimating a website project–clients believe that they can do more with their money than is feasible because they don’t understand the real costs behind what they are asking developers to do. This could be a result of not looking at historical data on similar projects, which is another common culprit when it comes to budget overruns.
Additionally, if a development team promises a very specific scope and site features without clear business objectives defined for the project, they will be working in the dark in a lot of ways and will have to go back to the drawing board a number of times. This goes back to the inefficiency mentioned earlier. As a solution, clients may think it’s better to simply add more developers to the project as a way to make it go faster, not taking into account the diminishing returns of such an expensive fix.
How to Avoid Overruns
There are a few things to keep in mind that will help prevent you (and your client) from going over budget as you work on website project estimates and eventually build a website.
- Focus on your north star: business objectives. Don’t get bogged down in the specific scope of a project.
- Engage your customers in the trade-off discussions related to scope during the process.
- Embrace a “feature fidelity” methodology. When budget and timeline are constrained, you can fit more scope in if you prioritize the fidelity of each feature. Which features need to be the most awesome, which can be more simple, and how can you be pragmatic in some areas in order to be very strategic in others?
- Embrace an iterative and evolving process for requirements analysis. Use wireframes and prototypes like this to encourage agile design thinking.
- Think in terms of incremental development and engage your client in those incremental decisions to show them you value their input in each step of the process. This dovetails with keeping open lines of communication with the client.
- Separate project accounting and resource planning from your project/task management. You can manage your budget and timeline if you use the schedule and resource plan as a more rigid constraint and rely on the framework and people to work within that. I actually left Nerdery to build a tool called Parallax to help with this exact problem.
As always, communication with the client and within your development team is key when it comes to website project estimates. With these tips in mind, you can reorient your teams toward Solution-Based Selling and Productized Services rather than costly and inaccurate website project estimates.
I highly recommend that you hire a firm that uses Parallax as part of their superior digital project management–such as Engine Room–in order to ensure that you are getting the best possible services from both an engineering standpoint and a project management standpoint. Engine Room provides world-class digital marketing services–built to last, from the ground up. And if you have any questions about Parallax, you can visit www.getparallax.com to contact me.
About the Author
Tom O'Neill was previously the CEO of The Nerdery, a digital consultancy providing custom software development. During Tom’s tenure, he grew The Nerdery from 5 to 500 Nerds with offices across four U.S. cities. Tom has a passion for helping consultancies grow profitably while building strong cultures and teams. He now runs Parallax, a professional services automation platform.
Parallax partners with Engine Room, the world’s preeminent Digital Marketing Technology Firm. To learn more, visit engineroomtech.com