Partner With Us

The changing marketplace for Web usability consulting has arrived at Creative Good, an Alley-based boutique firm that specializes in user experience research and site testing.

The company had to lay off "much of its staff " of 15-17 this week, which includes part-timers and contractors. As word of the cuts trickled out to e-mail inboxes around the Alley, company founder Mark Hurst confirmed the decision.

Hurst, who also edits and publishes the popular user-focused newsletter Good Experience, said the marketplace for engagements has shifted to smaller contracts. As a result of shorter turnaround time on jobs, the firm had to scale back.

"Clients are looking for smaller, more focused user experience projects," he said. The firm is still winning new business for Web site usability tests, and its reports on topics such as e-commerce and wireless devices are still in the works. "There is a lot of health in Creative Good. But the climate right now doesn't support big consulting projects," Hurst said.

Creative Good's cutbacks are typical of the scaling back underway among boutique agencies right now, many of which ramped up in the past few years to keep up with client's Web strategy demands.

Now, with many companies' Web strategies in full swing, amid a wait-and-see approach on spending as more data on the economy filters out, contracts have become smaller in scope.

In the industry, for example, a typical six-month small consulting contract ranging from $150,000 to $500,000 of a year ago has become more like $40,000 to $150,000 for a few weeks' work, say insiders. While those rates are just averages and don't reflect Creative Good's prices on engagements, the trend means that smaller jobs drive up the cost of sales and impacts the all-important utilization rates on headcounts.

"We have a smaller team," Hurst said. "We do more focused projects in a smaller amount of time and can still deliver high quality."

And it's not just the little guys who have to shift their approach to the marketplace. For companies that depend on large consulting packages, including a big team, a big price tag and a longer delivery time, the selling environment is even tougher right now, he said.

(Clarifies range of contract prices in 7th paragraph)

* Got a news tip? E-mail story ideas and comments to atnewyork@internet.com.