Ridiculous price-war and undercutting in Web Design

gargargar

The Corinthian wrote: »

If that is your sales strategy, then I suggest you give up now. Or hire a decent IT sales manager.

That is not our sales strategy.

The Corinthian wrote: »

You put yourself on their radar. You go to government tendering sites, you call up the outsourcing departments of large firms and get on their mailing lists. You go to networking events, better still you speak at them. You start sending out press releases whenever you so much as bring in a baby-sitting contract. Organize publicity stunts. You knock on doors, offer to do presentations for companies, buy them lunch.

We do most of the things you mention here. A lot more too. I am involved in a couple community things (even organising them). Have fostered networks with key influencers and newspapers. In relation to press releases, if you want a paper to pick it up, you will need to provide them with quality content. Don't do the cold calling part but might have a think about it.

With regard to public tenders I have mixed feelings. We have gone for a few, some of which I thought we had a great chance. Got very close on one but the problem was company size. It is a lot of work. I know some of the large consultancies have dedicated resources just working on tender submission.

Outsourcing for large companies is not really what we are about. I have worked for 2 of the largest global consultancies and know the game on that front. They get lots of grads and place them for 9 months in some telco. Harder to do that when you are small as your key staff are effectively working for other company. I would prefer to work on a project and have more control, and in house.

gargargar

Trojan wrote: »

I wrote this allegory based on John Andrews' super blog post on SEO but there are many parallels with web design at the low end of the market:

That's an excellent blog post.

The Corinthian

gargargar wrote: »

We do most of the things you mention here. A lot more too.

Then you should already be "showing up on the radar of of larger clients".

With regard to public tenders I have mixed feelings. We have gone for a few, some of which I thought we had a great chance. Got very close on one but the problem was company size. It is a lot of work. I know some of the large consultancies have dedicated resources just working on tender submission.

Inflate your company size. If you've 7 employees and outsource some of your work to an Indian company with 20 and keep 5 freelancers on the books, then say you've got "32 dedicated resources". Many of the larger consultancies historically even went as far as to blatantly lie where it came to this question. Bottom line is have you access to enough resources to do the job and that's what they're worried about - if you do, you let them know that you do.

Outsourcing for large companies is not really what we are about. I have worked for 2 of the largest global consultancies and know the game on that front. They get lots of grads and place them for 9 months in some telco. Harder to do that when you are small as your key staff are effectively working for other company. I would prefer to work on a project and have more control, and in house.

OK, but outsourcing for large companies, other than bringing in money, is a good way to get enterprise level portfolio pieces.

Graham

gargargar wrote: »

With regard to public tenders I have mixed feelings. We have gone for a few, some of which I thought we had a great chance. Got very close on one but the problem was company size. It is a lot of work. I know some of the large consultancies have dedicated resources just working on tender submission.

This is one of those costs that must be taken into account when tendering. There is a very real and significant cost to the whole competitive tender process for all parties involved. This is something many people fail to understand, especially the '*GASP* it cost how much' brigade.

Take comfort in the fact that it gets (slightly) easier/quicker the more you do it and add to this the benefit of getting you on the radar of potential future clients.

Could you partner with a complementary company to share the costs/work-load/rewards?

ChRoMe

gargargar wrote: »

Outsourcing for large companies is not really what we are about. I have worked for 2 of the largest global consultancies and know the game on that front. They get lots of grads and place them for 9 months in some telco. Harder to do that when you are small as your key staff are effectively working for other company. I would prefer to work on a project and have more control, and in house.

If you are not willing to take that revenue stream.... well best of luck because you are going to need it. The cliche response to that fear you have, is "fake it until you make it"

gargargar

ChRoMe wrote: »

If you are not willing to take that revenue stream.... well best of luck because you are going to need it. The cliche response to that fear you have, is "fake it until you make it"

Have you worked as an outsourced resource? My view from the coal face of that work is that it really is a numbers game. If you go down that road you better go hard and grow because you will have a LOT of churn with staff. Couldn't count how many colleague got pissed off (me included) as the felt they took a job with company A but ended up for most of the time working in company B, as a second class citizen (full time there but not a member of the company).

The Corinthian

gargargar wrote: »

Have you worked as an outsourced resource? My view from the coal face of that work is that it really is a numbers game. If you go down that road you better go hard and grow because you will have a LOT of churn with staff. Couldn't count how many colleague got pissed off (me included) as the felt they took a job with company A but ended up for most of the time working in company B, as a second class citizen (full time there but not a member of the company).

While it is true that outsourcing your staff that way will increase the churn rate, it doesn't exactly increase it that much; you'll still get 12 to 18 months out of an employee at least, which will more than pay for the hire and this can be mitigated further through use of a good HR support system.

Bottom line is it brings revenue into a company and has the additional advantage of putting enterprise level projects in your portfolio - opening up possibilities where it comes from transitioning from small to big clients. It may not be ideal for employees (although I never minded it myself), but ultimately you're running a business rather than a charity.

Of course, you can still happily cherry pick what type of work you want if there's lots of it, but given that this entire discussion is premised on the complaint that the small business market is being cannibalized by the industry's bottom feeders and that the enterprise market is a hard nut to crack. So choosing to ignore such a revenue stream may well be an ideological choice, but it's really not a business one when you come down to it.