So then I tried craigslist. I received a lot of interest, but found only one good candidate. But this candidate found another contract before I could get back to them. Craigslist is cool for simpler things like company logos, but didn't work for me on the web designer front.
So, I contacted a prof who taught a project course at a design school (university) in my area. I asked this professor to ask his best student to contact me. I looked over the student's portfolio and was really impressed. This design student turned out very good work for a very reasonable price.
Past custom references, portfolio and most importantly designer's overall attitude.
How much would you expect to pay roughly?
Too vague to answer...really depends on WHAT exactly you've hired the designer to do. Is it to take a detailed concept YOU give him and convert it into a design(cheap)? Is it to THINK through your technical product, think how users will use it, then design(more work)?
What if the design fails to impress potential users?
I don't know any designer who will guarantee that your users will like the design so this one is tough.
-Zaid
http://www.barenakedapp.com/the-team/how-we-picked-the-designer
Figuring out the best designer for your site is, generally, more art than science. Just like choosing a developer. One thing you can do to reduce your risk is to hire someone for a small task first (say, do the logo), and if you like their work, ask them to do the whole project.
Pay this person well as you get what you pay for. Web design like many other disciplines in the web field, is a highly lucrative job with new opportunities coming along everyday. It's important for the survival of your own company to make sure you make the hotshot you hired feel satisfied with the salary and your company.
However, if you are just looking for a junior person on the cheap, you can find that but then you get junior, cheap results. It's better to bring in junior people to work under your senior person and build him/her into a senior from there.
Web design is not rocket science. With all the tools and stuff available to designers today, there is no reason the "clothes" of a site should ever go over a few ,000'.
Don't pay 20-30k. Leave that for big/unsophisticated companies.
p.s. A lot of designers do suck. With developers, many can get the task done "eventually", but with designers, many can't get what you want... ever.
Unfortunately, it's a lot like hiring a programmer in other ways -- the best designers will easily be ten times as good as the worst ones, and there's no necessary correlation between skill and rate.
So returning to the original question: look at the web designer's portfolio. Ask questions about web standards and (X)HTML compliance, usability, A/B testing, cross-platform CSS issues, readability, copywriting, audience. A good designer will understand these things and be able to explain them to you in terms you'll understand. Make sure you turn on your BS detector too, though, as a bad designer will try to baffle you with buzzwords.
And one of my favorite interview questions, when looking at a designer's portfolio, is "Why doesn't Site X validate?" The point is not to get the right answer, because there isn't one, but to figure out how the designer approaches these tradeoffs. I've also never interviewed a web designer who provided a portfolio of only valid HTML and CSS.
And what if it fails to impress potential users? Then your web designer wasn't very competent, because that's exactly the sort of thing he's supposed to understand about your audience. A good web designer will bounce ideas off of focus groups and do usability testing, and then when the site goes live will conduct A/B tests.
Finally, the best way to make sure that the site doesn't impress potential users is to micromanage the web designer. You need to ask him or her about the web analytics numbers, but if you insist on wordsmithing on every page and monkeying about with fonts and layout yourself, you might as well just do the site yourself. (This is something I've seen repeatedly: the web site winds up being designed for and by senior management against the advice of the web designer, the potential users stay away in droves, and the web designer is blamed.)
First requirement for web designers I hire: I need to be able to read the damned page.