I once read about a "poor widow" who's son broken leg was ultimately amputated due to delays in finding a free clinic to treat his injury. Years later, Hetty Green - the Witch of Wall Street - died leaving an estate worth millions. We call this type of person a "miser."
In late 2010, I spoke with a prospective client about a new website. His needs were fairly straightforward: all the standard pages, a few online forms, the ability to self-manage site content, and he needed the site live in less than a week to correspond with several presentations he had lined up. The business was well capitalized, and he assured me additional work would follow as the business grew (wish I had a dollar for every time I've heard that one.) After some discussion, I agreed to develop a site that met all his requirements and his deadline for a very reasonable fee of $1800.
His reply: "Wow, that's really expensive!"
My reply: "Expensive? Compared to what?"
Of course I know what he's comparing it to. His nephew (aunt, friend's wife, take your pick) who is "just getting started" and offered to build his website for free. Or "those commercials" offering a website for $9.99 a month. Or his good buddy who just got an entire website for his multi-million dollar company for, "...well I'm not sure exactly how much, but it was definitely less than your price." (Oh yeah, I've heard that one a thousand times too. So why didn't you use that resource?)
So was $1800 too expensive? Let's break it down and see...
This gentleman's first year projected annual revenues were $300K-$500K. Other than the website, his only other marketing materials would be a business stationary package (letterhead, envelopes, business cards) and brochures he would hand out in person. The brochures were free from the manufacturers he represented, and the stationary package would cost around $200. Add in the $1800 website and we have a total "marketing investment" of $2000, or roughly 0.5% of his projected annual revenue. Not exactly breaking the bank, and nowhere near typical business budgets - even for a startup.
About this same time, a leak in our master bathroom required our shower be completely re-tiled. Care to guess what the repair estimates were? Try $1600-$3000 for labor, with another $800+ in materials. Now I'm all for a nice shower, but a $3000 shower isn't going to make me a dime in business. On the other hand, here's a businessman projecting up to $500K in first year revenues, with business presentations already lined up, squirming over $1800 that essentially represented his sole marketing investment. Sound foolish? You bet it is.
To make a long story short, I stuck to my price and he promised to get back to me the next day. After a week of "thinking about it" (didn't he need the site finished in a week?) he finally decided to go with "another option". At the time I'm writing this article, about 3 months have passed. He still doesn't have a website, he's burned through most of the initial funding, and he's struggling to keep the business going.
Would a website alone ensured success? Probably not. Did a shortsighted and miserly attitude toward reasonable marketing investments hurt his business? You bet it did, and it cost him an arm and a leg.
