How Will Web Designers Survive the Crunch?

Credit Crunch and Global Financial Crisis have become somewhat buzz words over the last couple of weeks, buzz words they might be but they actually reflect something very real happening around us and seemingly getting worse.

I have read a few articles online about how high street retailers are being hit badly however, online sales are up in comparison to last year. Does this mean for web designers the credit crunch is going to gently pass us by? I fear not.

From my experience with my clients over the past couple of weeks, I’ve seen some interesting patterns emerge, aside from them changing banks and their cheques being written on mostly one banks chequebooks.

They are definitely taking longer to pay, without a doubt. A nightmare when trying to keep hold of cash flow on a business. There is also a hesitancy around new projects, not that they’re all holding back but it is taking them longer to get their wheels in motion. When they do decide they want to go ahead, they are looking for cost cutting measures, especially with e-commerce, and opting for a lot of Paypal driven sites with the option to upgrade to Worldpay and the like at a later date.

One client asked for their FTP details so they could get their little sisters friend to make them a website – a terrible shame after nailing their new branding last year it is now a great advert for Comic Sans. No matter what I said to this client or however much I tried to educate her, cost was the driving issue. I’m lucky in that the main bulk of my clients are very loyal and are staying put but others just starting out might find this a cause for concern.

So what do we do? We always know there’s someone who will be cheaper than us out there, that’s not a new problem but should we loose a client to someone, we can’t afford to just let that client go, they need to be replaced. Dropping your rates to ridiculously low, and filling your days with double the amount of clients than normal, not only makes you stressed for less or the same money, undoubtedly the standard of your work will drop.

How do we go about replacing clients or gaining new ones at a time when people are at their most cautious? Does being a studio with premises give you an advantage over someone who works from home? Being a freelancer at this point could give you an advantage over a studio as you have fewer overheads, but studios have the physical presence which acts as a 24/7 billboard advert to draw in new clients. Who knows, only our clients can make those decisions. In my area, traditional local newspaper advertising has rock bottomed and you can now pick up a quarter page advert for about £30 per addition – I’m guessing others must be the same, which means this could be an affordable option for some people.

How are you finding the credit crunch? Some people are reporting being busier than ever while others are finding things slowing down a little. Do you have any plans in place or are you taking each day as it comes? I’d love to hear your thoughts to try and gain a bigger picture of how the web world is feeling right now…

Share:
  • Great Article….

    I’m finding personally with freelance job that current clients/projects are being pushed. Particularly those where funding is being provided (DTI/BusinessLink etc) – these organisations are now issuing short deadlines on completions, which in a way is a good thing for receiving funds, however a bad thing for getting timescales sorted!

    C.

  • I think smart web companies will see this whole thing out, not by cutting their costs to win business, but by educating their clients as to how the web can benefit their businesses more than any other medium. The internet is a great leveller: the small guys can take on the big guys and win. It can help a business reach new markets and clients, it can help businesses save and make money.

    As a small business ourselves, I believe that we (and most people probably reading your blog post) are likely to be more sympathetic to businesses for whom the stresses brought on by the Credit Crunch are causing them to rethink their web strategies than larger agencies might be. Hopefully, that synergy should help us win new business and retain the clients we have. We just need to be thinking of smarter ways of helping our clients than simply knocking a few quid off our hourly rates in order to win business.

  • I have very often found that giving a client their ftp details is a good thing for more business as once their “friend” has effectively “broken” their site they come back to you to “fix” it.
    Do you think having a physical presence (your studio) draws in a lot more clients when you are working in an online world? I would be interested in how many people walk in off the street to buy a website?
    Your point about the high street taking a hit is interesting, I wonder if more people are going online because it saves on travelling (therefore fuel) and most online shops are cheaper (due to the lack of physical presence i.e. Amazon).
    Certainly, we are experiencing interesting times.

  • I do think the C****t Crunch will not have as big an impact on the web industry as other sectors. If anything, I feel businesses will be turning more to the web as they seek cost-effective means for marketing whilst consumers seek to economise.
    Importantly – and I might be being a wee bit naive here – this might actually be a positive time for the web industry sector.
    Those commissioning web sites will perhaps seek to get a better value in their web sites as they seek a better return of investment. It is certainly possible that those developers and designers who adopt a web standards approach emphasising accessibility, SEO and progressive enhancement will be more attractive to those companises/organisations/individuals who start to assess the money that they are spending on commissioning/maintaining websites.
    Am not saying that this hasn’t previously been the case but with the web 2.0 fad I was increasingly seeing requests for websites that exuded style (and currency) over substance – more flash, less bang.
    Speaking to a photographer friend of mine over the weekend they were actually seeing a rise in work as people began to realise the difference between cost and value in commissioning work.
    Saying that, with belts tightened it might end up proving to be the day of the bedroom developer 😀

  • I currently have so much work to do for returning customers that i haven’t had time to take in new, but there might be a slight decrease in email/phone inquiries.

    Most noticeable is the increase in clients who think i charge to much pr. hour 🙂 but for now they atleast pay 🙂

    Great article!

  • Interesting read, Sarah. Personally I started up freelancing just over three months ago and business is going better than I ever hoped it would. My schedule is chocker and I’m turning work away. There are a few things that I think people who work on the web and freelance can be optimistic about:

    Marketing on the web is a LOT cheaper than traditional media so companies may look to get ‘better value’ out of their marketing budgets. Email marketing may be a good service to offer!

    Also, large companies may have to lay off staff – however, work still needs doing and history tells us that when companies lay off permanent staff, freelancers often benefit.

    Saying all that, no-one can tell what’s round the corner and what’s going to happen in the next year or so. It’s not just the credit crunch to worry about – inflation is high, unemployment is rising, and we’re probably going to be in a recession next time the figures are out. It’s certainly not a time to be jumping with joy, but I think we us freelance web people can be cautiously optimistic.

  • Sarah

    @Adam – I recently turned down the studio merger between them and You Know Who which means I’m just freelancing for them, I still work at home. It’s interesting, I don’t think in the time I’ve been there anyone has come in off the street and asked for a website however it’s normally bundled with the fact the company I freelance for do Signage for shops and vehicle graphics, which means they deal with a lot of startups that need the whole package, instead of shopping around they assume that someone that does signage will also be a great web developer.

    Odd huh!

  • I’m not sure how it will affect or is affecting freelancers (rather than just web designers) as I’m not a freelancer. But I think it will make it even more difficult to become a freelancer.

    Already freelancers have their “loyal clients” as Sarah has mentioned, but what if you don’t have loyal clients yet? How do up and comers handle this problem? I guess you will have to reduce prices further, show some outstanding work, network even more and bid harder on the job boards.

  • As I’m trying to get into an agency myself, I’ve noticed that more agencies are looking to expand their freelance base at the minute and not hire people permanently. This suggests to me that they’re are playing it safe at the minute and seeing how things play out.

  • Great discussion to be having!

    I agree with Aaron.

    I have found the amount of inquiries and discussions I am having with potential clients increasing – people are looking to the web to generate income to supplement decreasing footfall, or as a more cost effective advertising medium.

    That said I still have a vague plan to cover myself if times get harder (very sensible for any freelancer!) – this includes an alternative income stream (printing in my case), keeping in touch with your existing clients, and developing the services you offer (web support, email marketing etc.)

  • Interesting blog post.

    I have also written about the crunch at http://bit.ly/2Le0Su

    I think the tech world has a lot to be positive about. Yes I know that eBay have laid off 10% of staff, but really bloated organizations (such as eBay) use times such as this for streamlining. If they were in trouble the recent acquisition of ‘Bill Me Later’ would have fallen at the first hurdle.

    The impending recession also forces us all to look at our core, in good times we tend to diversify. Ditching the ‘bits on the side’ in favor of making our proven areas of success better is healthy for innovation and ultimately bottom line.

    So yes, we will all feel the effect, but if your smart there will also be a lot of great opportunities.

  • There was an interesting keynote by Tim Bray (Sun) at FOWA on Friday morning about ‘Getting through the tough times’.

    http://events.carsonified.com/fowa/2008/london/highlights/tim-bray/

  • Btw I came across this. It’s FOWA with Tim Bray, about the tough times.

    http://events.carsonified.com/fowa/2008/london/highlights/tim-bray/

  • oops just noticed the post above me lol:S sorry

  • Well, but its also the opportunity ( Pareto principle ) to focus on the good clients and fire the bad ones, right ?

  • I’ve seen that some clients are taking longer to pay in recent weeks but am still reasonably busy with regular clients. I’d have to say that reducing rates is most definitely not the way to go. Instead, I will be hoping to contact some not-so-regular clients and try and persuade them that now is the time for their long overdue website update/ecommerce software update.

  • Pingback: Can web designers be optimistic as the crunch begins to bite? :: Aaron Russell()

  • Pingback: How will the credit crunch affect the web industry? | Scott Mallinson - web designer and developer()

  • Hi Sarah,

    First time visitor (I think), arrived via Aaron Russell’s great website.

    I’ve been self-employed for three and a half years now, and even though the past two weeks has seen a decrease in new enquiries, business has been great, and I’m keeping busy. My rates have increased too, which helps with any slower than normal spells.

    I’m happy I have low overheads, and even though physical premises do act as advertising, they have nowhere near the same reach my online presence brings.

    Ciao for now.

  • I would say that I have seen some positivity coming out of the credit crunch. I’ve been swamped with e-commerce sites that need redesigning – almost like clients are anticipating hard times and investing in their business to help them through it.

  • Tim Malm

    Value is a theme that echos in so many of the responses to Sarah’s piece. You will loose clients who have no money, let’s all agree that they’re the best to loose. When the others ask why so much or why not less? Calmly and carefully explain for them what they are receiving. Tell them the value story, no one knows it better than you! If you can’t tell it, be ready to say goodbye. I recommend always including in the conversation the phrase, “never have to worry.” When you’ve had the value conversation with the client, “never have to worry” are sweet words to repeat as you hand over the FTP, or any other login info. I know.

    I’m located in Sunnyvale, CA aka “Silicon Valley” and have been self employed for almost 20 years. Boom and bust the typical cycle here, where at least the weather is pleasant. I’m a burned out, independent desktop and network IT support provider, moving into ‘your’ webspace. I was in commercial art production before the dawn of digital anything. The only computers were green screen, hard code, analog typesetting or early typesetting preview/layout terminals and such. All code driven interfaces.

    CSS and XHTML are something, and something to learn! Really, what fun to finally be able to position and format content so precisely in a browser window. As someone just entering the field, I’m convinced that I must have a greater understanding and facility with the concepts and the tools than my competition. Or look like I do… I’m still figuring out which part of the web design space to take on, and am thinking in terms of scale rather than volume. As if my thinking has any bearing on the future. We’ll see what happens, the need to “get it up on the web” seems greater than ever. In the mean time, boom or bust, hiring or firing, you’ve got to hire the IT guy in to unlock their account or set up the next new user. Why is HE reading that book on CSS? 🙂 Cheers!

  • Dan

    Really nice article Sarah, Some interesting questions.

    Personally I see the financial crisis like congestion on a motorway. The majority of the problem is down to people over-reacting. On the motorway, if one person brakes, their brake lights cause people behind to apply their brakes and the problem cascades. In this case the first numpty to apply their brakes is, the fat-cat bankers who noticed that their bonuses were slightly lighter than last year. They then panic and yell “shark!” and the news media say that this is the sign of a “Credit crunch” people see that, panic and spend less. This hits business, comes back to banks and the problem cascades.

    Web Design seems to be one of the markets that are in the proverbial fastest moving lane in the motorway jam. The credit crunch will affect us but not as much as other markets such as advertising.

    But at £30 for a quarter page ad in the local rag?! Let’s all advertise our services for cheap! It will help our business and help get their lane moving quicker too.

    Dan

  • Pingback: Designing through a recession | David Airey » graphic designer, logo designer()

  • Pingback: Designing throug a ‘recession’()

  • We have 4 people working for us in a fairly cheap office doing mainly web design and we have so far not really felt any change. We have been growing for some time now and this has continued into the credit crunch. We have put it down to staying focused on doing what we do and doing it well.

    I think people sometimes forget that business is business, the pitch might have changed but the game is very much the same. As long as there is a genuine long term demand for a product or service you provide and you are able to supply that product or service at a fair price you should be fine. Many of the problems we have seen in the big companies have grown from issues starting years back.

  • 3 years on and things have changed a bit. Mobile apps are the big things now with most clients at least asking about it if not spending 50% of their web budget on it. Web sites are being built with WordPress more and more and small businesses use Facebook rather than spend a gazillion dollars on marketing sites. I don’t know for sure what the next big thing will be but it yo are just throwing up Drupal or Joomla sites these days, your days are numbered.

  • Pingback: Concern in the Design Industry – Economy | bridgethigton()