How Profitable Is Web Design… Really?

How many website owners know they’ve made a profit from the money they spend on web design and marketing?

Well, a few days ago I had just that thought going round my head, so yesterday I fired out an email to my mailing list.

Here are the questions I asked

  1. What’s the minimum amount you can confidently say you’ve invested in web design and marketing?
  2. What’s the minimum amount of gross profit you can confidently say you’ve made from web design and marketing?
You may find the results surprising! (All numbers are in US dollars.)
Web Revenues vs Spend

Web Revenues vs Spend

The Results: More Website Owners Lose Money

I got 43 quick responses. Of those…

  • 21 made a loss
  • 19 made a profit
  • 3 broke even

So only 19 out of 43 (that’s just 44 percent) of respondents KNOW that they have made money from web design.

I’ve plotted the results in the graph you can see here, which reveals some interesting details.

Anyone in the pink area has made a loss, i.e. got less profit back than they invested. Anyone in the green area has made a profit.

Of course, there’s a wide spread. We have people who have invested hundreds, and other who have invested tens of thousands.

What Do These Data Tell Us?

Generally, there seems to be a loose positive correlation between investment and profits. The more you invest, the more you should expect to make. That’s pretty obvious.

It’s interesting to notice that nobody who spent over $10,000 has lost money. All 21 who are reporting a loss (so far) from their investment invested under $10,000.

So we could speculate maybe there’s a tipping point beneath which your investment is less likely to be enough to stimulate sufficient interest, or make enough of an impact on the market?

However, there’s also a nice cluster of dots who have invested well under $5000 and made profits! As well as several site owners who have invested up to $5000 or $10,000 and made nothing at all!

That would seem to suggest that particularly at the lower end of the market there is very little correlation at all. In fact, if you just look at the sub-$10,000 investors, there are more results along the edges (invested little but got good returns, or invested little and got very low profits).

Clearly, some website owners (or their marketing people) are doing the right thing, but far too many are not.

So Why The Huge Variation?

I’d say the short answer is, a lot of us are not investing wisely.

There are a few reasons behind that, chiefly:

  1. There are a lot of very bad web designers providing very bad marketing services out there.
  2. The sector is still fairly young, and clients don’t know what to ask for.

It’s actually really hard to find a web designer who’ll give you any indication of when and how you’ll see your investment come back with interest.

It’s even harder to find one that will only take you on as a client if they can guarantee you’ll see a profit. (My agency, Scratch Web Marketing is a rare exception.)

Why Can’t Most Web Designers Promise Profits?

First,  because they don’t realise that online marketing is enough of a science that it’s even possible!

Second, because they don’t have enough knowledge of the techniques and processes required to deliver profits.

The marketers in my agency (and on my course) do. Here’s how we do it…

  1. Whenever a new prospect approaches us, we ask whether they can offer something unique that solves a very real problem for a significant sized market in a distinctive way.
  2. Assuming they do, we undertake a piece of consulting work to investigate the market, evaluate the prospect’s proposition, its strengths and weaknesses, the competition, all possible traffic sources, and run a forecast to estimate as scientifically as possible how much we’ll be able to make for this client. The price of this piece of work is $999 (and it’s probably the best $999 it’s possible to spend on marketing insights.)
  3. If we can’t make them enough profits to be worth our while, we’ll give the client a “red light” report, essentially saying, “Your money will be better spent in this area.”
  4. If we know we’ll be able to make them good profits, we’ll put together a proposal that details exactly what we’ll do, how, and when, so that the client can know exactly how much they can invest with confidence over time.
  5. Finally, we don’t deliver a “first best guess” website and walk away. No, when we take on a client, we take them on for months or years. As long as it takes to deliver on our promise of guaranteed profits, and for as long as it continues to benefit the client.

Web Designers and Marketers!

If the thought of guaranteeing your clients real profits makes your palms sweat, that’s a good sign. It means you have integrity and you care.

It also means you don’t have all the skills yet to be able to stride into the marketplace with confidence, knowing that you’re doing good work that will put your clients well into that green “profit” area.

But don’t worry. Join me and my team on the Pro Web Design Course, and you’ll start mastering the thought processes and methods of the world’s top online marketers.

Website Owners!

Ask yourself, truthfully, are you in the pink zone or the green zone?

If you know you’re in profit, you’re investing wisely, and doing the right things. Keep doing it.

If you are not, you need to fire whoever’s doing your web design and marketing. Seriously. I’m not messing around here. This is your money. You have a right to see it grow. The Web is the fastest, most efficient, most measurable, most flexible, and cheapest way to make money ever invented!

Fire that guy (here are 10 good reasons). And then speak to an agency that will only take your money if they can promise to give you more in return. Every time. Guaranteed.

 

One Comment Leave a comment

  1. myfreelance101 says:

    The graph seem to be real in the real world!, the little you invest means the little gain you would have (most of the time). I think most of the people who fails in the business simple go to war without a weapon, it is really hard to strive a web design business if you only know web design graphics and html codes.

    I also run a small web design business and I can say that it is growing little by little. My simple formula was rather simple and quite unusual, I simple work as a Freelance web developer in top freelancing sites in the web for a year, by that time I have collected trusted friends and clients who would want to work with me directly.

    Although I know that it is growing, I don’t stop from educating myself, I even enrolled to Ben’s Pro Web Design Course (btw, that was awesome, lots of things to be realize in the world of web design) which I think is the best asset to keep up with the pace of web design business.