Given the large number of WordPress-based discussions on pricing, costs, consultant’s fees and product licenses, it’s no wonder why some people get frustrated about the Community and the understanding of Open Source.
Other than the mentality and the usual incompetent statements such as: “But WordPress is free!” or “There should be a free plugin to do that!’, there’s another reason why some business owners can’t grasp the cost of building a WordPress solution.
Commodities or Needs?
There are usually two types of things that you need to do, build, use or have on a daily basis:
- commodities that just need to do basic work
- high-quality goods or services that are simply the best
Take any service or product as an example and try to apply it in two different contexts.
There are cheap and expensive cars, computers, tablets. There’s a low-cost Internet plan and a high-speed one. There are generic chairs and tables and authentic ones, too.
Would you buy a chair for $3000? Probably not since you’re not going to use it that much, or the difference with the $300 chair would not worth the extra $2700. But if you’re equipping an office that is to be rent for $40,000 a month for executives and funded companies, it may be a good investment.
You may need the highest plan from your Internet Service Provider if you make a living off the Internet, work with large files, manage plenty of servers remotely. But if you’re a general user who spends an hour or two on Facebook in the evening after business hours, and goes fishing over the weekend – it’s not worth the cost.
They just target different audience. There is a market for everything, which is why those service or product vendors are able to survive and make a good profit at the end of the day.
I’m a great supporter of Pareto’s 80/20 principle and I’m currently listening to an audio book called 80/20 Sales and Marketing: The Definitive Guide to Working Less and Making More. It focuses on that given commodities vs. needs problem, and it also reflects the amount of time we spend on things that don’t matter.
If you’re not familiar with the basics, the short version is – 20% of something is responsible for 80% of something else, and vice versa. Like:
- 20% of your clients pay 80% of your revenue
- 20% of your tasks take 80% of your time
- 80% of your users would use 20% of your WordPress plugin’s features
Now, the spicy thing here is: can you afford working with 20% of your customers if they make 80% of your profit?
It’s a good philosophical discussion to have, but the answer, as usual, is: it depends. It depends on whether your 80% are higher than your costs, and whether you can spend a few months finding more of the 20%-type of customers. Or, applied to the plugin example – whether your plugin can survive with the essential 20% of the features, or it still needs the other 80%.
Either way, Pareto’s rule is often an indicator that there is a lot of room for improvement for your business. The questions is whether you have the resources to take it to the next level quickly, or take the long and safer route. Most entrepreneurs leverage 80-20 and build massive businesses, but some fail to implement it properly, or don’t do their math right.
This is applicable for products, but services are more interesting since they are often harder to compare on the outside, or assess before spending some time with several providers at once (which is not cost-effective).
And that’s the thing with WordPress freelancers and development agencies. 80% of the freelancers and WordPress agencies out there can handle 20% of the available work – which is setting up new websites, installing some themes and plugins, and applying some basic CSS changes here and there (if possible). And 80% of the remaining features could be built by the other 20% of the service providers. If we apply the math to the other 20%, we can utilize Pareto’s principle in a better way and find out how many of those 20% can work on the 20% of the 80% – which requires some calculations (that are done in the 80/20 book mentioned above).
I like the story of 10up – one of the WordPress.com VIP providers – since Jake shared in an interview that it resembles the “last 10%” – the finest details for usability, speed, security and everything else that make your business shine like a diamond. They work with great businesses around the world and hire reputable WordPress contributors since they provide value. And that value is way, way different than the one provided by a local freelancer with a few months of practical experience.
Whenever clients ask for WordPress development work, they often focus on the low-cost contractors or agencies. Which is fine as long as they aren’t building their business on top of that new site of theirs.
For example, if your 10-year old daughter wants a site where she can write some poems and collect them (and share them with friends) without planning to become a published author, it’s fine to have a cheap solution, or even a simple installation on a cheap shared hosting. It’s not essential – speed doesn’t matter that much, or even a downtime of 30-40min a month is hardly noticeable.
If your friend wants to build a gallery and store some of their old photos, and browse it once a month – it’s not a billable product, a running business or anything like that – it’s a pet project that doesn’t require some top quality.
Building a WordPress-driven Business
The actual community problem is that business owners look for low-cost quality services in order to build a business that would make a fortune.
If you’ve been following Mad Men or any other TV Show for reputable experts from boutique agencies, you know how much they spend on expensive dinners, office parties, outstanding offices and so on. That presence sells to the high end customers. It conveys trust, profitability and stability, which automatically suggest that those companies are wealthy enough to afford all of that.
The common sense dictates that this economical state is generated by high paying customers who need top notch quality (why would they pay that much otherwise?). And those companies hire recognized experts, conduct internal training courses, take certification exams – you name it.
We’ve received hundreds of requests for completing a website that start with: “Our freelancer went broke”. Reputable companies cannot afford to work with partners and service providers that can’t deal with their own expenses – it’s bad for their internal processes, trainings and reputation.
And it’s important for you to convey trust – which is only natural to successful businesses and entrepreneurs who can afford it since their backlog is full of requests, they decline most of those and work only with the best clients out there.
Every business owner wants to be there. But building that reputation takes time and requires a certain investment. And a potential partner would definitely do a background check of that business, which in the Internet world is usually:
- who works there
- what’s the background of the founders
- what’s the portfolio of the company
- is the website appealing and helpful
- is the business reputable – testimonials, social media following and so on
Business owners looking for cheap labor would end up with a cheap solution as well. No one will sell you the latest Porsche for $5,000 or $10,000. Quality costs money and if you need that quality in order to grow your business, you have to spend more, iterate and take it to the next level.
Otherwise your website will dictate “cheap”, and will most likely be much less usable, way slower and rank bad on search engines. Guess what would your potential partners think about how much you value your own business.
Training Courses and Licenses
Last week I took the HubSpot Inbound Marketing Certification. At DevriX I have to manage our team members working on content marketing and social media marketing, and work closely with our designer on our online presence, landing pages, free ebooks and so on. The course is free – so is the exam itself – and it was totally worth the time polishing my inbound skills that I’ve gained over the past two years.
However, I’m not a full-time marketer. I’m a developer by education and I’ve done that for more than 10 years. But as a business owner, marketing takes a consistent chunk of my time and it was rewarding getting certified and learning the ins and outs of the Inbound Marketing methodology.
But I wouldn’t invest in an expensive training or certification on Inbound Marketing. It’s not worth the money for me right now and I it doesn’t fully utilize the 20% of the things I do on a daily basis that brings 80% of our revenue.
You want to play with the ERP big boys (SAP and Oracle), instead of the so-called Tier II ERP providers (Epicor, Infor, Lawson)? Then you better be prepared to pay a lot more ($9 million to $13 million) and plan for a longer implementation (two to three months longer).
I did however invest time and part of the cost of mile2’s C)SWAE training. It’s total cost is about $3,500 now, I got most of that covered by mile2 since I had to train a few teams in Saudi Arabia for a month, but I paid for my certification and spent quite some time learning all of the details.
I received a direct profit opportunity from it – a well-paid training gig and potential training opportunities in other countries – and security is an essential part of the web development work that we have to implement on a daily basis. So it was totally worth it.
There are free solutions and high cost ones, and it’s up to you how much is that worth to you. It’s all a matter of costs vs. reward – is it worth paying $X in the short/long run for something? Take a look at landing page builders, CRM systems, or any other popular product that has a free version or a premium and expensive product sold by a large company. They sell the same outcome, but in a different way. And the cheap (or free) solution is not a good fit for a large business, let alone an enterprise.
There are also $500, $5,000, $50,000, $500,000 and $5,000,000 websites out there. They are built by different people with different processes, skill sets and usually provide different outcome. While it’s often hard for a non-educated business owner to assess the difference right away, it should be more than clear that the $500 solution is much more basic compared to the $5,000 one, and way tinier and generic than the $50,000. But if your $50,000 system automates some processes that could save you hiring three more people dealing with operations and administration, and looks stunning and appealing to larger partners – that brings a tremendous value to your business.
Are You There Yet?
And this is the main question you need to ask for everything around you. Of course, there are some things in the entertaining industry that you just need to decide for yourself – whether you need a large flat TV at home, an expensive car that you don’t use directly for work or an expensive trip to an exotic location.
Everything else falls in the “costs vs. reward” category. Which includes your WordPress website as well.
You can hire a $10/hr contractor for some basic changes, but they won’t deliver the quality that a $150/hr one will bring on the table. While geoeconomics are important to note here, the web development industry is completely international and experts can easily land projects anywhere around the world for any rate imaginable.
Take some time off and think about your business.
- What have you achieved so far?
- What is the next step?
- Where do you see your business in 3 years from now?
All of the above are essential for your growth, and the more professional you are, the easier it would be to grow your business without any unexpected obstacles.