Pricing Web Development Services in an African Market

Can we talk about money? Just for a moment? I know, I know, nobody wants to give away their secret sauce, but here’s the thing: your prices say a lot about you and how you do business. Add in the fact that the web development market in West Africa is a) virgin and b) wildly distorted, and figuring out how to price your services quickly becomes a nightmare.

Freelancers and web firms here in West Africa tend to go through a three distinct phases:

1. Plucky young freelancer and entrepreneur
2. Slightly more established entrepreneur who has formalized his business and is starting to pick up bigger clients.
3. Big Man who doesn’t have time to code anymore.

Prices tend to follow the same pattern:

1. Prices are calculated by the minimum required to continue paying for an internet connection while the freelancer continues his day job.
2. Prices are calculated slightly below market rates.
3. Prices are calculated to extract the maximum possible from cushy government and civil service clients.

Nowhere in this progression is a precise calculation of how much the coder needs to live comfortably, keep his business running, and enjoy himself on the weekends. Nowhere in this progression is a look at the impact of price on perception, including a clear calculation of margins and how to improve them.

What businessmen and women perceive when they see your prices

Rock-bottom: Perhaps you’re a student who’s just starting out. You’re trying to built up your portfolio. You’re desperate. You have no negotiating power, and you will accept whatever slim pickings the prospective client throws your way. This includes when the client “forgets” that he still owes you money, forces you to drive across town in the rain, and takes advantage of your inexperience.

Because your prices are rock-bottom, your clients will have trouble reconciling your cheapness with the idea that you do quality work. They’ll expect less from you, and may browbeat you into providing more than you’d agreed on to make up for the perceived lack of quality.

Slightly below market rates: You’re hurting for business, and the quality may not be everything the client hopes for. Because of this perceived lack of value, the client will take you for everything you’re work. Give an inch and they’ll take a mile.

Slightly above market rates: You’re not hurting for business. In fact, the fact that you can afford to charge slightly higher prices implies quality, punctuality, and work ethic. While the client will still fight hard to get his values worth, he won’t push to take advantage you in the same way because he perceives your work as being of a higher quality. Your time is worth something, and your client should know it.

Multi-million CFA government contracts: Why are you reading Appfrica for business advice, anyway?

Didn’t you promise some secret sauce?

Who’s more likely to recommend you to colleagues? A client who values your services and your time or a client who’s deliberately picked the cheapest freelancer of the bunch?

I’ve mentored several web developers in Cotonou now, and they’ve all seen the same thing. They get more work with high prices than with low, because if you’re expensive, you must be good. Lowball prices are fine when you’re just starting out, but they communicate inexperience and desperation.

If you have the financial stability to price yourself slightly above market rates, you’ll find yourself with clients who value your services, rather than those who are just shopping around for the best deal.

Better quality of life + higher margins = happier web developers. No secret to that.