How Much Should I Spend on a New Website Design

There is something wrong with how organizations budget and hire designers. Rather than invest money over a long period of time, most organizations make a lump sum investment every few years greatly impacting the success your website.

When we make a lump sum investment and then neglect our website, after 3-6 months our presence quickly becomes obsolete, and our initial investment wasted.

Organizations that do not have monthly funds allocated typically work like this: every few years an executive makes the determination that the current website is dated. Funds are then allocated based off what the company “thinks” a new website will cost. A new website is born, but just like before there is no on-going investment which means the initial investment again is quickly thrown away.

It’s understandable why organizations do this. Most of the time designers can’t give tangible reasons why a website fails at generating leads or increasing sales. So clients don’t see a website as meaningful marketing, it’s disposable like a brochure.

How much should I spend?

We must understand that a website is much more than a piece of marketing, yet that’s how we budget for it. A website can provide customer support, expand your market reach, extend business hours, improve time management, find new talent, generate leads, reduce your cost of sale, and more.

With that said the question is: How much should I spend on a new website?

The simple answer is, as much as you can afford. The greater the budget the larger the return barring you hire a professional design agency. As long as you are seeing a return on your investment why should you stop spending?

What a professional agency can do with a $25k investment over a $5k budget is astronomical. These budget differences can make a substantial impact on your overall return.

So when you are determining what you can spend figure out the following:

•How much can I make as a lump sum investment?
•How much am I willing to spend yearly once the website is live.

Determine how much your organization can realistically spend and then reach out to agencies you feel will be a good fit.. Be upfront with your designer. If you’re unable to disclose what you’re willing to spend then you shouldn’t be talking to them.

How design agencies get paid

A majority of projects go by a fixed pricing model, and that’s how we work at Madtown. This ensures that you get what you pay for, and the price doesn’t increase later.

Other agencies work on an hourly model, which works fairly well, but you never know what the final price will become until the project is complete. The model isn’t bad; just clients need to know what they are getting into.

Ways to pay

Most agencies require a large deposit up front (usually 50%) and the remainder upon completion. You just committed your entire budget to one large project, but what happens if it doesn’t work out? What if midway through the price increases or worse you realize this agency wasn’t the right one and you just wasted your entire budget on a bad agency. That’s a large investment to lose.

A phased approach.

We don’t ask companies to commit the entire budget, it doesn’t make sense for either parties and always focuses on the one and done design projects that fail so quickly.

We’ve broken our process into a very small first step where you can try us out, and determine for yourself if we should work together with a small initial investment. This way, if you think you’ve made the mistake of hiring the wrong design agency you can walk away for very little loss. The alternative is hiring a designer who’s asking for a large investment up front; that’s quite a risk.

In conclusion

Determine how much you can realistically spend and put a large emphasis on finding the right designer.  Do set a realistic budget, and find out if the agency can meet your business goals within that budget.   Your website is your most valuable business tool treat as such by realistically investing as much as possible.

Avoid continuing to invest large amounts of money every few years.  This only results in a quick burst of sales, and quickly fades after a few months along with any ROI.  Look to invest long term through iteration and regular website tweaks.

Be careful of agencies who want you to commit your whole budget. Valuable dollars can get wasted because they couldn’t deliver what they promised. Instead determine how much you can spend, invest a little, and with a small successful outcome invest a lot.

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