The smart way to price your website project (and why one model is ideal)

When you collaborate with an agency partner on a software development project, ‌pricing models typically fall into one of the three common approaches:

Time and materials (T&M)

Under a T&M structure, your organization is charged for every hour spent on your project. While this model suits staff augmentation arrangements where your organization leads and manages the team, it’s less ideal for project-based work. Why? The client bears the most risk when the unexpected happens, leading to potential overruns on your budget and missed deadlines.

Fixed bid

Fixed-bid projects outline the budget and scope from the beginning. This structure works best for projects with set deliverables like website audits or standalone design and discovery projects. However, a fixed-bid approach is especially ill-suited for software development, which is often dependent on the need to incorporate new information uncovered during the process.

Fixed price with a variable scope

Four Kitchens has found “fixed price with a variable scope” especially suited for large projects. As a client, your organization gains a clear deadline coupled with broad goals for your website. But you have vital flexibility in establishing the details. This approach allows us to build on new information and shift priorities accordingly.

One of the strengths of a fixed price with a variable scope structure is how well it protects your launch dates. This model enables an agency like ours to apply what we learn as a project progresses and adjust what features are included and at what depth to stay on schedule.

Fixed price with variable scope projects offer the following advantages:

1. Predictable project timeline and budget
2. New ideas and information improve the outcome of a project rather than derailing it
3. Stronger collaboration and better problem solving for you and your agency partner throughout the engagement

As a project moves forward, we expect to address a range of issues with your project’s expected needs. Your organization may realize some features can wait until after launch, or they may not be needed any longer. Every project starts with a list of important features. But there are only a few that are ultimately important enough for launch.

The distinction between ‘unexpected’ and ‘out of control’

While website projects are complex, you should understand that a fixed price with a variable scope model isn’t the best structure simply because the process can be chaotic. There’s a big difference between encountering a surprise during a project and gaining a new understanding.

A surprise is something that your team has no time to react to. A new understanding means we have uncovered information we can use to adapt your project and its priorities. To apply a home improvement analogy, it’s the difference between finding a leak while updating your plumbing versus a burst pipe.

A successful software development project is full of new understandings that provide valuable insights. Fixed price with a variable scope ensures your website evolves based on those learnings.

Building an understanding of your project is crucial to its success. Four Kitchens gathers new information at each of the following project phases:

Discovery

Discovery is designed to enable you and your team to develop a more complete understanding of your project than you can achieve alone. As we dig in and ask questions, we often help clients gain clarity on the problems their project needs to resolve.

This phase establishes priorities for new features, but not necessarily with the goal of removing them from a project. Sometimes the shift means changing the depth of how they work at launch.

Design

As the saying goes, “a picture is worth a thousand words.” Seeing your project’s ideas visualized for the first time in the Design phase can dramatically shift the understanding of a project. By the end of this phase, the vision for your project typically reflects an outcome that is a stronger solution than the initial concept.

Development

Hands-on experience is vital to any project’s success. Four Kitchens uses an agile workflow that delivers new working features every two weeks. As a result, we’re able to adapt quickly and dig deeper to refine what’s been created or stop and shift direction. Our developers also learn more during this phase, which allows for more accurate prioritization and refinement of features.

This phase is especially important when your project includes a website migration. When a website includes thousands of pieces of content created by many hands over the years, few organizations understand the nuance of every detail. The development stage provides an opportunity to bridge this knowledge gap

Launch

The post-launch period is an underappreciated opportunity for gaining insights about your projects. As users interact with the new website or part of its functionality, your organization can gather data to inform future enhancements. This phase often leads to a shift in priorities for ongoing development plans.

Through each of these stages, the fixed price with a variable scope model allows for your project to reflect the results of new information without derailing the project. This approach ensures that the results of a project are not just what was planned, but what will best resolve problems for your organization.

By balancing stability with adaptability, a fixed price with a variable scope model addresses the common pitfalls of traditional software development. Your organization gains a predictable timeline to launch while also ensuring your project responds to all the latest information.

Ultimately, the fixed price with a variable scope approach leads to more successful project outcomes. It empowers organizations to navigate website projects with new confidence, balancing the need for predictability with the ability to respond to unknown variables.

If this sounds like an approach that will generate the best results for your organization’s website, we should talk.