The problem with most web design and SEO agencies.
I think an interesting point to start out with is the relative response time between a large firm and a freelancer like myself. When you hire a freelancer or just want to employ someone directly in-house, you may find that their response times, or “customer service” isn’t as great as that from big companies or firms.
When I ran a small company I had a structure as follows. We had a sales team, an account manager/assistant, a graphic designer, a developer and myself as the overall manager. The sales team consists of the initial outreach and the closer. They were also responsible for our sales materials. Which also touches upon another point I want to raise – the generic proposals and sales materials utilised by most companies in this industry. I imagine it’s similar in other industries, but in the efforts to scale it causes issues when the company is trying to offer marketing and advertising services for websites that are supposed to be unique. The fact that a company must send out very large numbers of these proposals to prospective clients means it makes more sense for them to use templates which cheapen and reduce the quality of work done. Since this template forms the basis for the work contract signed by the customer, the strategy and plan that is executed for the client itself by necessity are also generic – meaning the overall result is terrible. I have actually attached examples of these very generic templates we used to use for our salespeople when we did this kind of work.
So you have the initial salesperson who just does “outreach” (spam) to large numbers of people. They may send short emails or make cold calls – whatever it takes to get some kind of response. After a while, they amass a list of “potentially interested clients”. Out of these, something like 10% actually converts to customers so it doesn’t make sense to actually spend too much time or money on the individual proposals. So they all get generic templates. The initial salesperson doesn’t send these, however – they pass on the hot leads on to the more experienced “closer”. Level 2, or L2, Will personally follow up with this entire list. If you have ever shopped around SEO or web design services, you have no doubt experienced this kind of “harassment” where you get continuous follow-up calls and messages. They will very quickly send you an email with a supposedly “custom” proposal for you and your business, ready to sign with a dotted line (which usually happens to have a very high generic price attached to it too).
There are a lot more generic documents too, there’s a generic fee schedule, marketing plan, SEO plan, terms and conditions and so on.
The rest of the process is like this. The price is high enough to cover the cost of the salespeople, office, profit for the owner, salaries etc…
Something like less than 10% of sent proposals are expected to close (since you only need to show a slight semblance of interest as a potential customer to receive one) so the prices are usually 10x higher than what they need to be to compensate for the time/effort required to find and service customers, support staff, rent, etc… Imagine basic “social media” packages for $5k per month. Websites for $15k, and so on.
L2 ends up getting a few gullible but wealthy Australian businesses to sign a lock-in contract and make a large upfront payment. And this is basically 90% of what makes an Australian webshop profitable. This is where 90% of their effort is focused.
At this point, all of the “customer care” and service you received up to the point of you making the payment all but disappear. Once you’ve signed the contract and made the payment, the company now moves their focus to close their next client and increase their revenue further.
Any work they do for you, any time they spend on your website at this point is actually eating into their profits. The less work and time they spend on your project, the more money they make. Usually, the account manager will pass your brain on to the one person who manages the actual product development – in most Australian companies at this point they pass your account on to someone in India. You’ve paid $10k for your website, and the company, in turn, pays their Indian partner $300-$400 to actually produce your website for you. Their pure 10x profit of $9.5k is reasonable enough to keep the salaries paid, the lights on and the rent paid.
As you can see, this is a wildly inefficient process. In my company, I tried to solve this problem by actually providing quality work for my clients. But this proved almost impossible. To provide quality work, not only would the initial client proposals have to be generated after extensive research and discussion (which would result in tons of wasted time, or requiring our customers to actually PAY for the proposal, competing with other companies who offer “free” proposals”) but I’d also have to make sure that the project itself is passed onto a high-quality developer or marketer. And on top of that, customers expected round-the-clock customer support – in other words, they expected to be able to call or email us whenever they wanted and to receive a quick response any time. To facilitate this, we would need to hire and employ a full-time secretary or support person – whom the clients end up paying for anyway. Bigger companies can afford to do this at the expense of delivering high-quality work.
This 24/7 support and fast responsiveness isn’t something you could expect from a freelancer or a self-employed web developer/marketer, even though they would most likely do a much better job. And it’s because I no longer have a PA or secretary that I cannot always make a response on the same day or even the day after. I don’t have a team I can delegate work to anymore.
So continuing on with the story – I tried to hire people that would fulfil the contracts for me. So we’d spend a lot of time crafting quality proposals for our clients and giving them reasonable prices. Often they would take the proposal and run away with it, or give it to one of our competitors (which was frustrating) or they would try to negotiate the price down, which would mean that we had no choice to cut corners. Because the fact is, after they’ve paid – the LESS work we do for them (and hence the fewer expenses we spare for our clients) the more money we get to take home at the end of the day. This is not to even mention the issues with scope-creep – clients asking for more features but expecting the same flat-cost. For a company to successfully provide all this flexibility and support at a “reasonable” cost, is impossible. They either outsource or charge very large sums of money – but usually, they do both to boost their profits.
And the entire industry gets a bad name because of it.
In my case, I realised that no matter who I hired or how much I paid them, I always had to personally get involved in every project. The people who had the skillset to actually deliver quality work were all off running their own companies and charging $150+ per hour. So the bottleneck became me. My company could only produce work as fast as I could do it. Hiring staff usually meant I had to sit down and re-do a lot of the work they did.
When we used templates to give our customers proposals, either the templates were not truly appropriate and wielded little to no results, or offered so much to the client that we could not possibly fulfil them at the stated price.
Some of our salespeople would promise whatever it took just to get a sale commission, and we would be stuck with a contract that was offering a client a $10k website for $1.5k.
Most clients didn’t want to pay hourly – they wanted an estimation of a flat upfront cost – but the reality is that it’s almost impossible to predict how long it’s going to take to modify or fix issues in an existing website because we don’t know how many mistakes the previous web developer made.
Furthermore, it’s even more difficult to predict how long it’s going to take or how much effort (and hence money) it’s going to take to have a website rank in the top #3 on Google. So most companies solve this by simply charing the upper-bound of how much time it could possibly take to complete the task. Which usually means the client is getting ripped off.
So for all these reasons, although it may seem like a big firm is professional and reliable with their offices, secretaries and flashy pamphlets and sales materials, the reality is that’s all an illusion designed to fool businesses into signing lock-in contracts. Once they have you – you’re locked into a year of billings and terrible quality websites and marketing work that could even harm your business.