Client Proposal: Why Is The Development Cost So High?

Posted by Chris on Feb 18, 2020 10:57:37 AM

Creative agencies can handle a lot of activities internally, but when it comes to the development piece of a customer’s proposal, they oftentimes don’t have the in-house resources to tackle it themselves.

If you’re reading this article, chances are you received a quote from a development agency and it was much higher than you were expecting.

And we’re sorry for the sticker-shock...

It’s not uncommon for development pricing to err on either side – whether significantly cheaper or more expensive than expected. So, what is it that causes this seemingly volatile pricing behavior?

Development Costs: Influencing Factors

There are tons of factors that influence development pricing, but these are a few peripheral thoughts on the subject:

What’s the “Benchmark”?

“Expensive” is entirely a comparative word. Expensive in relation to what?

Unfortunately, when it comes to development proposals, a lot of companies are caught off guard by pricing simply due to ill-set expectations. And oftentimes, those expectations aren’t derived from real data.

Whether it’s from past “bar-napkin” proposals or simple presumptions made without proper research, false expectations for cost can greatly impact the decision-making process. 

Make sure to evaluate the “benchmark” you’re using when mulling over the pricing in a development proposal to ensure your giving accurate comparisons!

Who Is Developing Your Product?

“We charge more because we’re the best developers in the entire world.” ~ Completely Unique and Original Development Company

Yeah, yeah, yeah. We’ve heard it all.  But, there is some truth to the statement (taken with a grain of salt, of course).

Development firms aren’t raking customers over the coals on pricing because of their level of brand equity the same way many major companies in the marketing industry do. Development companies, as stated in a previous article, are rather linear. The same applies for pricing.

Generally speaking, top-tier developers are going to charge more per hour/project because they have a great deal of experience. That makes an impact in more than one way – not only will the development work be of a higher quality (less bugs/issues and cleaner code), but they will also be more efficient in the amount of work they can finish per hour.  So ultimately, it’s a tradeoff.  One firm may display a higher price per hour, but the final cost depends on the scope of the project, expertise of the developer, and many other factors.

What’s the Process?

People don’t often think of what the “process” of development looks like – at least, insofar as it involves them.  In general, any given project is going to include the following stages, each with different resources involved:

  • Discovery
  • Blueprinting
  • Asset Collection
  • Design
  • Development
  • QA & Testing
  • UAT (User Acceptance Testing)
  • Pre-Launch
  • Deployment
  • Training & Handoff
  • Post-Launch

You want to work with a development company that is going to advise you and participate collaboratively along the way. Someone that will work not as an outsourced service, but as a close member of your team as you progress with a development project. “Why?”, you ask? Well it’s almost as if we’ve rehearsed the answer, so here goes it:

Too many Creative Agencies view development as an ad hoc service that can simply be bought and completed without issue. However, your agency’s clients expect the best solution based on the information they have provided you. An outsourced developer is no where near as close to that information as your business is, making the potential for failure in communication and development much higher than working with someone who partners closely with your firm. Unfortunately, this type of “close partnership” isn’t the way most of the development industry works. So…

What’s the Solution?

As you’ve probably inferred by now, while development pricing may seem illusive at first glance, it’s actually rather straight forward. A high-cost developer probably has a good deal more experience, higher efficiency, and cleaner coding practices than a low-cost developer.  And, working with an experienced development team that has a standard process in place to ensure quality will incur additional hours.

But at the end of the day, hiring a developer isn’t just a question of price, nor is it even a question of quality. It’s a pursuit to find a developer than can come alongside your creative agency as a partner throughout the entire process of executing a client’s proposal. Finding a developer that’s as close to your client’s key communication pieces as your own team is.

That’s what KudosCode specializes in. We focus on bringing clarity between developers and creative agencies – serving as the translator from design to development. We work with our clients throughout the entirety of a project – not just hopping in as an uninvolved 3rd party to execute an ad hoc service. We’re here to translate, to partner, and to build relationships with creative agencies in need of development services. 

We’re here to change the way development services work.  Click here to learn more about our Agency Partner Plan and receive your first month FREE.

Topics: Web Development, Outsourcing, Estimation, Costing, Pricing, Estimates, Proposals

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