Despite what they'd lead you to believe, even the toniest Web developers are negotiating prices these days. Increasingly, corporate marketers at companies such as Kimberly Clark, Snap On Tools and others are taking 50% off those shocking sticker prices.
Managing runaway costs
Negotiating volume rates, eliminating hidden charges and juggling deliverables are some of the tactics companies are using to manage runaway development costs.
But the heftiest savings aren't coming from playing hardball. "We don't get into horse trading," says Steve Klinenberg, VP-general manager of Digital Facades, a Santa Monica, Calif.-based developer.
"The reality is, if you want to pay half the design price, you'll get half the design."
Instead, savvy companies are winning concessions by applying a time-honored purchasing tactic -- developing long-term partnerships.
Working with full-service developers, they're consolidating site development, hosting and maintenance with one vendor and outsourcing multiple projects to the same shop.
Kimberly Clark, for one, estimates it shaved at least 10% off its total costs by awarding a multisite assignment, complete with intranet and extranet iterations, to Information Architecture, an Atlanta-based full-service developer.
"We saw this as a two-year commitment in which the developer would handle everything -- from design and production to hosting, updating and site enhancements," says Mark Semmelmayer, Kimberly Clark's associate director of communications services. "By bundling our business, we also avoided a double markup on services ordinarily contracted out."
In fact, most Web shops are hungry for clients, like Mr. Semmelmayer, who see these relationships as more than just a one-site stand. "If I can get a stream of future revenue from a huge client, I'm more willing to bite down on my margins to negotiate," says Amy LeBan, director of marketing strategic relations of Eagle River Interactive, a $40 million Chicago-based Web developer.
Sharing assets saves
Anytime developers can share assets across Internet, intranet, extranet and CD-ROM projects, it will result in cost savings to the client. "We discount based on volume because we can leverage resources," says Digital Facade's Mr. Klinenberg. "It cuts up to 25% of our design and production time, as well as 50% of our paperwork."
Web developers have also been known to ply customers with discounts for awarding them with the plum electronic commerce and corporate intranet assignments. "These are two areas that are particularly hot among developers these days," says Michelle Kensinger, business development manager of San Francisco-based Vivid Studios.
Ms. Kensinger says Vivid may lop as much as 25% off the price because it wants to expand its credentials in this area.
Companies that can't -- or don't want to -- play in the long-term game, are still lowering their costs by simply getting the fat out.
Convinced that developers pad their estimates, Robert Gingras, manager of electronic commerce for Kenosha, Wis.-based Snap On Tools, requested an itemized breakdown of costs from bidders.
As a result, the Milwaukee-based firm sliced 25% off price quotes for its Web site and extranet by eliminating content templates and other "incremental" items not critical for launch.
Downsize wish list
Doing some of the work up-front can also slash costs. Kimberly Clark estimates it saved 50% on design costs for one site by supplying the developer with digital images it had in-house. "Anytime the developer doesn't have to start from scratch, it saves you money," says Mr. Semmelmayer, who is also chairman of the Business Marketing Association.
Vivid's Ms. Kensinger agrees: "On a $200,000 prototype, a client can save as much as $20,000, simply by doing some work up-front."
An often overlooked opportunity for cost avoidance is ongoing maintenance. Most developers can recount horror stories of companies that blow their entire budgets on site development and are unable to maintain their new investment.
Too often, they end up paying more because maintenance was not negotiated as part of the overall contract. "We will negotiate a discounted hourly rate for ongoing service, but it must be done up-front," says Mr. Klinenberg.