Freelance vs. Agency – Which is Better at Selling Web Design?
Prior to selling my web agency last year and starting uGurus, a new venture to help web professionals become more profitable, I pitched a lot of website projects. Unfortunately for a lot of freelancers, I was the “other company” that the customer decided to move forward with. Like Beatrix vs. Master Pai Mei, it wasn’t a contest. If the title of this post led you to believe that I was going to outline a fair and balanced tit for tat, you might want to adjust your sitting position at this time. But…if you think my #1 competitor, as an agency, was other agencies, think again.
I’m not saying that over my tenure of pitching over 950 website projects I didn’t lose a couple of deals to freelancers, but they were far from my worst enemy. And if you are a freelancer, you should worry less about the big guys. This is not a David vs. Goliath tale. There is another villain out there who is much more powerful and elusive. Worse yet, many web designers don’t even know he exists.
Hobbyists and DIYers Need Not Apply
Every business, nonprofit, and person needs a website. The web is the center of our universe. It is how we transmit information, commerce, and revolutions. Combine that with the insanely low barrier to entry for web design and you get what we have today in our market: millions of web hobbyists making a mess of the web, and a small group of web professionals doing this for 100% of their daily diet.
I’m going to ignore the hobbyists in this discussion. I was there at one point in time myself, but hobbyists usually get opportunities because their direct family or friends need a website. Rarely does (or should) a business put any stock in a web designer with little or no portfolio that is working on their craft part-time at an extremely low wage. When I say “freelancer,” I mean the web pros that do this gig full-time.
Surprisingly there are only a few large companies in the space. Most of them work in the domain name and web hosting business with a do-it-yourself website solution. There aren’t a lot of web agencies with over twenty employees, let alone 200. Also, I never thought the DIY solution was much of a competitor either. A sane person wouldn’t be his or her own dentist or doctor right?
Whenever a prospective customer told me they were planning to build their own site and “Just wanted some help in case they got stuck,” I informed them, “When you want to get serious about your business, here is my card.”
The Freelancer Dilemma
Besides starting as a freelancer myself, and working with many freelancers over my sixteen year web tour, I actively consult with a handful of them, helping them grow as web professionals. The primary business objective of every freelancer I meet is to book as many billable hours as humanly possible, while spending as few hours as possible on operations and overhead. The problem is that most of them don’t know that this is their objective.
Many freelancers are constantly trying not to be freelancers. Whether they are trying to start their own virtual agency, or perhaps are aiming for a more traditional brick and mortar establishment. And in the pursuit of these bigger dreams, they have a hard time staying afloat. Let me give you an example. Freelancers love to spend countless hours building their own websites as if they are big companies. I know because I used to do it. I would use the word “we” on our website. Our own site would have a sitemap, just like an agency, with a bunch of pages talking about our company vision, team, and portfolio of projects. I would have lengthy pages about services. I would spend days creating content to rank for generic terms (that agencies were competing for).
It pains me to see so many freelancers trying to compete head on with agencies instead of leveraging their competitive advantage (their extraordinarily low overhead). Many freelancers approach their own marketing as if they need hundreds of customers. The reality is a typical freelancer could make a really good living from only ten or twelve projects per year. With that small of a number, you barely need a website let alone a search marketing campaign.
Most freelancers I know would fare much better if they focused their time selling their services to agencies. The freelancer’s goal should be to create channels of constant and consistent business, versus trying to compete for the end-clients themselves. Focus your message directly at other web, marketing, public relations, and advertising agencies. Showcase your nimbleness and expertise to people that understand the craft. Instead of pursuing end-clients that take countless meetings to close a single deal–and by the very nature require a massive amount of overhead to manage–pursue a small group of agencies to become your salesmen and project managers.
Freelancers that successfully do this avoid the pitfalls of spending all of their time doing non-billable things like selling new clients and project management. By essentially “outsourcing” your sales and project management, you will pack more billable hours into your weekly schedule. However, rare is the freelancer website that speaks directly to this model. There is always one foot out the door hoping to get both the agency-channel customer and the direct client. By having two possible customers, you leave both prospects not sure exactly who you are targeting.
The Agency Advantage
At the peak of my agency, I was selling full-time. I was able to work on my sales craft like any dedicated professional athlete: daily training, expert coaches, and participation in a lot of competitions (deals). By having a team, each person gets to focus on his or her individual specialty.
This concept is called Division of Labor and is backed by economic theory as the most effective way to solve problems. Besides just being able to focus 100% on my job of acquiring new accounts, I knew a few sentences that, delivered in the right way, would make sure the business owner wouldn’t dream of choosing a one-man-band over us.
“If I get hit by a bus, or more likely, am out sick or traveling–don’t worry, my team will pick up the slack. We’ll always make sure you have a point of contact.” or “We don’t rely on a one-person production process, we have an expert designer, expert developer, expert copywriter, expert photographer, expert videographer, and expert project manager to produce the best results possible.” or “While we might be a little more expensive, a typical full build out with us only takes eight weeks because we are able to leverage a team-based process with multiple people working on your project at the same time.”
I wouldn’t spend a lot of time on this, but typically a couple of well placed pre-rebuttals would establish that I wasn’t an “I” but a true “we.” A major factor in any purchase is mitigation of risk. Basically you have to address the fact that the customer is putting up several thousand dollars and you have to make them feel like it isn’t disappearing. For the average agency, this is a slam dunk.
The True Enemy
Even though I believe agencies will always outsell freelancers when placed head to head, the real enemy is a common one: no decision. I lost deals to him more often than any other reason–including competing agencies and freelancers. Businesses, nonprofits, and government agencies choose “no decision” more often than they choose “the other guy.”
Practicing agencies and freelancers face this problem without even knowing it. For years I was bent over who I was competing with on every deal. I used to even ask my prospects for competing proposals (this is a taught sales technique that I stopped employing because you end up focusing on the wrong thing).
Instead of being focused on my customer, I was worried about who I was up against. This obsession distracted me from the real (and invisible) competitor of inaction. Organizations choose nothing because of a few reasons:
- Talking to web companies was exploratory at best (they just wanted options).
- No one addresses their problems well enough to warrant the investment.
- They were unable to find a good match and will restart the search.
- They aren’t educated enough on the problems and potential solutions (everyone sells to the proposal too much versus properly educating their customers).
- Their needs and pain aren’t enough to take action.
Whatever the reason, the reality is freelancers and agencies don’t need to worry about each other. They need to focus their energy on the person who is directly in front of them: the customer.
Spend your time understanding their pains and problems. Get your prospect to fess up to the real reasons they are evaluating a website project. Ask about their buying process, if they’ve budgeted for this type of investment, and if they have ever engaged someone to help before.
I found that when I started worrying about this real competitor, I thought much less often about the other companies in my area. I also spent a lot more time with each prospective customer prior to signing a deal to make sure they truly understood my solution and more importantly, I understood them.
So if you are a freelancer wanting to slap me upside the head, take a moment to thank me for showing you the five point palm exploding heart technique.