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>Real World Pricing Examples The following are examples of WebSpecks engagements. They involve the design, development and maintenance of various Web 2.0 Customer Facing solutions. You can read about them and see how much we charged and what we did for the money we earned... or you can click on the icon at right and calculate your own ballpark price for our services.
Solutions shown below demonstrate WebSpecks capabilities in designing and implementing Websites, Social Networking systems, Information Management systems, Influence Networks, Market Stimulation and Web 2.0 IT and IS infrastructures. Actual fees, and how they were earned, are disclosed below.[1] Client names have been withheld due to confidentiality agreements. Please select an example from the following: >Client #1: For Profit Health-Education Service Provider; $39,000 project >Client #2: Early-stage Biotech Company; $60,000 project >Client #3: US-Mexican Startup in Need of Basic Websites Capabilities; No fee charged
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>Client #1: For Profit Health-Education Service Provider WebSpecks' Fees: $39,000 Total Engagement Time: 3 Months Type of Engagement: Websites, Social Network, Influence Network and Market Stimulation Platform Design
WebSpecks Involvement: Design and specify Market Stimulation and Management solution.
Project Scope: Engagement involved design of a new Web 2.0 site structure, the purpose of which was to stimulate and create a cohesive market segment out of a large (> 10 million), diverse population of citizens suffering from a specific health condition. The site had the purpose of stimulating user interest until a market was created, creating cohesiveness within the market, enrolling participants as Members, and then serving those members by providing access to health information regarding their condition, as well as physicians and hospitals who could serve their needs. Parallel efforts involved creating ‘Member stickiness’, i.e. developing ways to encourage Member retention and new member growth. The solution would be built in-house by Client's own IT department. Details: The solution involved creating social interactive mechanisms (read: chat rooms, blogs, like-minded communities, et al) to support the needs of the target community. Measurable objectives included attaining a high signup-to-visitor ratio, high levels of 'Member activity retention over months', high levels of new visitors being drawn in by friend-peer activity, and high levels of professional visitors being drawn in because of Member (read: potential patient) activity. Generic Site Modules (defined as features which are available to the entire community) included: Home Page, Message Board, Chat Rooms, Member Roster, Events Calendar, Shared Picture Section, Shopping Section, Most Popular Content Section, Latest Community Content Section, Latest News Section, Members Only Section, Vendor Section, specific Health Information Section, Member Community Sections (for those suffering from specific health issues), Physician Section, Hospital Section, Surgeon Section, Q&A Library, Member Reunion Section, Section for postings relating to State/County/City activities, Health Insurers Section, Professionals Community Section, Aftercare Section. Unique technical features which supported the platform’s operation included dynamic data forms and content management. Communication features extended beyond the Web to include interactive capabilities aimed at 1) stimulating increased Member involvement (e.g. automated fax capabilities, Member boards, chat rooms, etc.), 2) automated means for professionals to join the community (physician, surgeon and hospital self sign-up), education postings, an advisor network, self monitoring programs, essential goals and more. Sections made available to Members included: Member profiles, self administration for Members, personal comment section, blogs, health tracking, surveys, reviews, document help center, shopping and activity history, customer service section, news/article submission section, friends list section, guest book, profile templates, photo section, ID card printing, personal message center, profile viewing section, user rating section, registration section, sponsor section, sponsor website promotion, banner ad subscription section. Results: Project design was completed in January 2005; technical platform was completed in 2006. Membership rapidly increased to >250,000 new members and continues to grow at a compound rate of > 120% annually. Over 70% of all physicians serving this market are currently Members of this website-stimulated community. Client continues to earn its principal revenue via sponsor supported banner ads from this site. Because web advertising revenue generated from this site is so significant, Members continue to receive all of the health, education, peer-support and other services provided without charge or fee.
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>Client #2: Early-stage Biotech Company WebSpecks' Fees: $60,000
Total Engagement Time:
5 Months WebSpecks Involvement: Engagement involved a complete corporate review and analysis of current business mechanisms, including business processes, customer facing systems, business plan review and rewrite, technical infrastructures, corporate goals, objectives, customer facing systems, use and application of technology, et al. A key objective was to develop a better means for management of the product sale and fulfillment process, with emphasis on using Web 2.0 systems in support thereof. Project Scope: Client manufactured unique nutrition supplements for patients with specific health conditions, using a simple eMail-based web site to support product sales. One obvious result of WebSpecks’ review was that a more effective eCommerce site was needed to support product sales. However, the fact that additional products from third party biotech companies were also sold by the company on its web site provided an opportunity for cost subsidization of the overall marketing, selling, inventory, warehousing and shipping operation. Review of the company’s operations disclosed that most of the third party biotech companies (vendors) were too small to manage their own real time inventory, shipping and warehousing operations, with the result that, in order for Client to meet his own customer’s shipping expectations, he needed to perform these service for the third party vendors. At the time, this service was being performed without charge, as Client considered it a contingent necessity in meeting his own time-to-ship objectives. Review by WebSpecks of typical vendor operations also revealed that few of the vendors had their own eCommerce web site, mostly due to cost and a general unfamiliarity with eCommerce technology. WebSpecks’ view was that this combination of factors provided Client with a chance to build his site in a manner so that it not only supported his needs, but also provided a ‘template’ that could be remarketed by him to each vendor, as a unique stand alone site for their own use. Thus, for a small fee, each vendor would be able to have their own website, which although independent in look and feel, would be supported by back-end functioning drawn from the technical platform supporting Client’s own site. Site maintenance and management fees would be charged by Client to each vendor for this service, however, the services provided would include not only an eCommerce web site, but also inventory management, warehousing and shipping services (for orders placed through each vendor’s site). Inventory control, warehousing and shipping would of course be provided directly out of Client’s own warehouse. By carefully planning the fee structure, WebSpecks was able to leverage the solution so that the fees earned in ‘helping’ vendors cross subsidized not only the Client’s own eCommerce operation, but also his entire warehousing and shipping operation. Additional benefits that would stem from this included: 1) since shipping would take place out of Client’s facility, vendors would have to inventory their product in Client’s warehouse, thus cutting down on Client’s need for product purchase funding (a reduction of some $380,000 annually in bank borrowings), and 2) product orders placed on vendor sites, since they would be channeled through Client’s own eCommerce site, would provide Client with additional real time and historical market information (vendor sales levels, unit sales volumes, et al). Finally, to keep development costs at an absolute minimum, WebSpecks suggested that the eCommerce platform be developed off shore, in India. Details: WebSpecks developed and issued an RFP to international vendors. A web development company in India was selected to develop the application, the Client’s own website, and all vendor sites. On behalf of the Client, WebSpecks negotiated contract terms, conditions and fees with the Indian development company, and oversaw their work. A summary of the application developed is as follows: Pages for the application were divided into two sets - Site Administration Pages (for in-house use) and Administration Pages (for use by vendors). Examples of Site Administration Pages include a site administrator login page, general administration page, product management page, link-buttons for Web-store ‘combo’ product management, add/edit category buttons, add/edit image-overlay buttons, and more. As an example, the Web-store product management page would allow administrators to configure Web-store products in real time, while the product listing page would provide for real time addition of new products. Data tracking was a key part of the overall solution. Various data could be listed and tracked for each product, including item codes, SKU, product name, units, categories, text descriptions, price, price structures, sort-orders, refill eligibility, features, shipping requirements, classification, product thumbnail images, product options, allowed product combos, product discount options, vendor, inventory levels, reorder levels, reorder triggers and more. Error Messages were supported, as were Dependencies. The application was developed using HTML, Perl and MySQL. Results: Project design was completed in September 2005; technical platform was completed in late 2006. Sixty percent of Client’s small vendor partners subscribed for eCommerce, inventory, warehousing and shipping services. The Client continues to earn fees from these services, all of which go towards subsidizing Client’s own inventory and product management system. The additional customer exposure gained by funneling vendor orders through Client’s website has enabled Client to experience consistent, steady customer growth without incurring additional product marketing expense. Vendor order history tracking has allowed Client to anticipate market shifts, with this information being used to formulate new products based on evolving consumer trends.
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>Client #3: US–Mexican Startup in Need of Basic Website Capabilities; No fee charged
WebSpecks' Fees:
$0
WebSpecks Involvement: New US–Mexican startup had plans to build global Medical Travel company but needed funding. Company approached WebSpecks for core design of market stimulation platform to support business. WebSpecks initial analysis suggested costs for such a Web 2.0 platform would run $300,000 - $400,000. Since company was only recently formed and was still seeking capitalization, WebSpecks suggested several steps be taken: 1) WebSpecks assist in completing business plan, in which would be included request for funding for Web 2.0 Market Stimulation platform, 2) management would include request for this additional funding as part of their efforts in speaking with potential investors, 3) if required, WebSpecks would participate in investor presentations to explain the roll of technology in company's business model, 4) 1 page placeholder websites would be constructed by WebSpecks to demonstrate to investors scope of company’s intention, 5) as funds became available sites would be upgraded to include full content and links, 6) when all sites were completed and funding received, development would begin on Market Stimulation platform itself. WebSpecks proposed that as a gesture of goodwill it would develop the placeholder websites free of charge. Project Scope: Market Stimulation platforms leverage their success off of three things: 1) an effective network of interlinked sites, 2) social networking features which attract and hold customers and 3) automated intelligence which tracks and responds to customer needs. WebSpecks designed an overall grid of interlinked sites, based on the '11 vertical market disciplines' the Client was targeting (i.e., Client had intents of focusing Medical Travel sales on 11 market sectors). Since each of the 11 market sectors would require its own unique website to promote the services of the company, a non-linear approach to information distribution was required. The network WebSpecks designed to address this issue looked as follows:
...with each node representing one of the 11 vertical
markets. Within each node of course will ultimately be a complete website
structure, likely built along the following lines (currently, all that
exists are placeholder sites):
The non-linear approach shown in the first graphic above was selected based on the relationship of linear viewing needs to nonlinear hyperlinked needs. As the reader can see below, with 11 vertical markets, a linear narrative approach would have made the overall site structure too confusing for the average customer to be able to navigate.[2]
Again, stage one of the project involved building simple, 1 page placeholder sites for each of the nodes. WebSpecks performed this task without fee, as a goodwill gesture intended to demonstrate both the Company’s capabilities and its desire to establish a long term relationship with the Client. Details: WebSpecks drafted the copy content for each site, created a common look and feel for all sites, assisted the Client in registering domain names and establishing hosting, built the sites, linked them, uploaded the sites and now maintains them. Design time for the infrastructure and specification of technical requirements took 2 weeks, site construction was performed as time allowed over a three month period. Results: Placeholder sites were completed in April 2007. Client is currently seeking investors for its revised business plan. WebSpecks assisted in writing the business plan and developing a Pro Forma for the Client, again without fee, and is assisting in investor presentations.
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Our pricing is generally quoted as "Fixed Fee, Not To Exceed". This means that we offer a fixed fee for our services, where the fee is based on hourly rates for the work done. In order to arrive at the Fixed Fee, we estimate the number of hours involved and the type of staff person that will be needed to do the work. Basically, the number of hours, times the hourly rate for that staff person, equals the estimated Fixed Fee for that staff person. When the fees for all of the people involved are added up, we have a final Fixed Fee. During the project we track our hours and report them to you bi-monthly. At the end of the project we 'settle up' with you. If the time we work is less than what we estimated, you win... you only pay for the actual time worked, not the higher estimate. If the time we worked exceeds our estimates then you still win, as we fix our fee at the earlier estimate and swallow the extra time we spent and the losses we may have incurred. How accurate are our estimates? Most of the time we come in within 10% of our estimate. However, there are times when we spend considerably longer to do a job than we thought... and in those cases our customer wins since the fee is fixed at the lower estimated value. Want to try your hand at estimating what it costs to build a basic web site? Try this: Assumptions
1) It takes 1.5 days of work to confer with you and then build several prototype templates or layouts from which you can pick the final style you prefer. 2) For a site with from 5 - 10 pages, it takes 3 days of work to gather, create and develop proprietary graphics and animations. 3) It takes a Programmer about 1.3 days to program each page of a website. 4) For every 5 pages programmed, it takes 0.5 days to check, validate and correct the links involved. 5) For each 5 pages it takes 1.5 days to build the key phrase list for each page of the site, insert the phrases into the header code and redraft the copy to match the key phrases (or vice-versa). 6) For a site with between 5 - 10 pages it takes 1 day to validate the code, check it against all browser versions and types and publish the site. 7) It takes a Project Manager about 10% as much time as all the time the Programmer spends to oversee the project, make sure work progresses on time, is done right and that the code is properly written and documented. 8) It takes 0.5 days to tidy up the site and submit it to all search engines. Calculations Assuming a 7 page site, calculations would look like this: 1) Template: 1.5 days x 8 hours/day x $185/hour (Consultant) = $2,220 2) Graphics: 3 days x 8 hours/day x $185/hour (Consultant) = $4,440 3) Pages: 1.3 days x 8 hours/day x 7 pages x $135/hour (Programmer) = $9,828 4) Links: 0.7 days x 8 hours/day x $135/hour (Programmer) = $756 5) Key Phrases: 2.1 days x 8 hours/day x $185/hour (Consultant) = $3,108 6) Validate Code: 1.0 days x 8 hours x $235/hour (Project Manager) = $1,880 7) Project Oversight: 10% x 78.4 hours x $235/hour (Project Manager) = $1,842 8) Clean Up: 0.5 days x 8 hours x $235/hour (Project Manager) = $940 Total = $25,014 What's Missing? The above represents a sophisticated but basic website. It does not include eCommerce applications (i.e. 'Shopping baskets' and the like), forms, databases, market stimulation mechanisms, social networking platforms, blogs, comment pages, user review pages or the like. How Can You Reduce The Price? If you create the graphics on your own, then much of the cost for us to produce graphics that do not violate someone else's copyrights can be reduced. Notwithstanding this, unless you are truly adept at creating graphics, there will still be some time needed to optimize your graphics for each page and the internet in general. If your sales or marketing department can develop their own list of key phrases, write most of the content that goes into each page, and match it to the key phrase list, then much of the cost associated with developing the key phrase list can be reduced too. Working together with us on these and other items, and with your extensive and active input, the price of $25,014 could easily be reduced to as little as $18,500 for a project of this type. How long will it take to do the whole thing? Plan on 6 weeks. |
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[1] Engagements listed were performed directly by WebSpecks Incorporated, or by its predecessor Pacific Associates, Ltd. [2] Above graphics were taken from, are courtesy of and are the copyright property of Web Style Guide: Basic Design Principles for Creating Web Sites, Second Edition, by Patrick J. Lynch, Sarah Horton. |
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Copyright 2006-2010, WebSpecks Incorporated |
