How to Respond When They Say "The cost is higher than I expected."

Posted on 5/26/2015 by Sue Mayo Smith in web development costs

“The cost is higher than I expected.” That’s what our client said when we presented our website build and Internet marketing proposal for a new project. Personally, I think that is true in most of the transactions I find myself in when I’m the buyer so those words resonated loudly in my own ears.

Why does good web development cost so much?

How do we, as digital marketers and website developers, help set expectations correctly, and how do you make a value assessment when our clients don’t buy website and digital marketing services every day?

I did some research relative to what the statistics show as being the ‘norm’ for annual spending in these areas.  I must admit that I was surprised by the data I found.  I share some highlights for your consideration (all stats are national):

- In 2013, on average, a company spent 2.5% of their annual revenues on digital marketing. So the company that is bringing in 1 million dollars a year is spending $25,000 on Internet marketing. Wow.

Companies spent 10.2% to 16.4% of their total annual budgets on marketing when deriving 10% or more of total revenues from online activities.

- The average marketing budget is 7%-11% (with the majority being 10%) of annual revenues. Again, the company that is bringing in 1 million dollars a year is spending $100,000 on total marketing – traditional and Internet.

In 2014, the spend on digital marketing represented 25% of the total marketing budget – in 2015, that is projected to increase to 33%

This data was sourced from, and can be obtained, via Gartner at http://www.gartner.com/newsroom/id2895817

 

I share these stats simply as an informational point.  While stats are stats, they hopefully add some perspective to the project scope. The percentages above go up if the company is introducing a new product or product line or entering a new market.  The trick is getting some of my clients to believe it.

 


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