When engaging with an agency for a web project, many clients lean towards requesting a fixed price estimate for the sake of cost certainty. However, this seemingly appealing approach often comes with hidden costs that warrant careful consideration. Let's delve into the intricacies of these concealed expenses.
Collaboration as the cornerstone
Above all else, the success of a web project hinges on the seamless collaboration and trust established between the client and the agency. At M3, we invest significant effort during the 'Discovery Phase' to identify requirements and potential obstacles before initiating the design and development process. However, even the most thorough discovery process cannot predict every twist and turn. Changes are inevitable during the course of a project.
When the pricing model is based on a fixed price, both the client and the agency might struggle to swiftly adapt to evolving circumstances and new information in a manner that best serves the project. Let's explore a few hypothetical scenarios to shed light on this issue:
Scenario one
In the midst of the project, senior leadership decides to form a partnership with another organisation to handle project distribution, rendering a significant portion of the initially scoped e-commerce functionality to be unnecessary. Consequently, the fixed price set for the project surpasses what is actually required for successful completion. In such cases, there is often a tendency to seek additional features and functions to justify the higher cost. Unfortunately, this approach rarely leads to a great user experience, as it involves finding solutions for the sake of finding problems.
Scenario two
A project is initially scoped to incorporate the development of an extensive thought leadership hub. During the planning phase (referred to as the 'Define Phase' at M3), the agency and the client collaborate on a brilliant content strategy that takes into account user needs and search demand. However, a roadblock arises when the client's content team realises the enormous task of repurposing content previously locked in PDF or print formats and reorganising five years' worth of blog posts to effectively support the planned new tool.
At this juncture, it is crucial to pause and reflect on the value of expediting the launch of a new site. Shifting gears toward a minimum viable product (MVP) approach often becomes the optimal choice to bring the new branding to market before the content marketing initiative can be fully implemented. In such scenarios, clients who find themselves in this predicament may feel compelled to maximise their investment by demanding more functionality for the committed budget, ultimately slowing down the introduction of the new brand.
Forging a different path
We have discovered that there is an alternative path that can effectively address the challenges associated with fixed price estimates for web projects. Instead of solely relying on a fixed price model, we suggest embracing a more flexible approach that involves proposing an initial ranged cost for the entire project. This approach includes a dedicated fixed price discovery phase, at the conclusion of which the overall project cost will be solidified.
By offering a ranged cost estimate, we strike a balance between providing clients with cost certainty and allowing room for adjustments based on evolving project requirements. Let's delve into the details of this approach and explore its benefits.
Fixed price discovery phase: setting the foundation
To begin the project, we propose a fixed price discovery phase. This phase is dedicated to thoroughly understanding the client's goals, gathering requirements, conducting research, and outlining the project's scope. By assigning a fixed price to the Discovery Phase, we ensure that the crucial groundwork is covered within a predetermined budget. This approach allows both the client and our agency to align expectations and establish a solid foundation for the rest of the project.
Firming up the overall project cost: informed decision-making
As the Discovery Phase progresses, we maintain open lines of communication with the client through regular meetings and checkpoints. This enables us to closely monitor the project's evolution and make necessary adjustments within the established ranged cost framework. Towards the end of the Discovery Phase or a designated milestone, we conduct a comprehensive review and analysis of the project's scope, requirements, and any changes that have occurred. Based on this assessment, we work collaboratively with the client to firm up the overall project cost, providing them with a more precise estimation that aligns with the project's current status and future objectives.
Benefits of the ranged cost approach:
- Cost certainty with flexibility: The initial ranged cost estimation strikes a balance between providing clients with a level of cost certainty while allowing for flexibility to adapt to evolving project needs.
- Collaboration and informed decision-making: Regular meetings and checkpoints foster collaboration, enabling informed decision-making that optimises project outcomes within the established cost boundaries.
- Transparency and trust: By engaging in open and transparent discussions about project costs and adjustments, we build trust and strengthen the partnership between the client and M3.
- Mitigating unforeseen costs: The ranged cost approach accounts for potential unforeseen circumstances, minimising the risk of significant budget overruns.
By embracing this alternative path that combines a fixed price Discovery Phase and a ranged cost estimation for the project as a whole, we can effectively navigate the complexities of web projects while ensuring transparency, collaboration, and successful outcomes.
Contact our team of digital experts to discuss how this approach can be tailored to meet your specific business goals and project requirements.
