Simple, honest and funny advice on design pricing methods
I found a post this morning which is a great short but sweet explanation as to why there is no universal right or wrong to pricing methods. It outlines a few examples of possibly methods and ways of thinking about the value of your work with humorous real life examples. This really made me smile as it answered the questions I think we all ask when we first start quoting prices for design work.
After 5 years basing quotes on company rate cards at the agencies I was working for, I did indeed ask myself all the obvious questions when it came to pricing the design services of my own company Blink:
- How much am I worth as a single entity or small company?
- Do I charge the company time at an hourly / daily or quote per project?
- Is a quick fix that takes me 30 minutes, but saves the client thousands of pounds worth more than just a half hour fee?
- Do I need a rate card for different services?
- Am I underpricing my company now we are in a recession?
- Where does competitive become working at a loss?
- And at what point does pricing too low hinder my company’s credibility and do me a disservice?
- At what point is valuing myself price my company out of the market completely? Even if i think the work is worth it?
- How much money do I need just to eat a month?
- Do I need to eat every month?
How to price is quite an evolving process so I don’t think my method will ever become completely static (as the industry and technology constantly change), however for me I have found that a mixed approach works well. For small jobs or on-site work for clients on a rolling bases a day rate does the trick. For longer single projects an individual quote based on time and resources needed is more appropriate – along with a ‘shopping wish list’ of features and services so the client can cherry pick what to have and what to cut so they can tailor their project to their own budget. In fact, of all the advice I can give (other than don’t sell yourself short and read the post I will link to later) I would say this is the below points are the best pieces of advice I can give:
If a client has a fixed budget but their requirements exceed what is reasonable for the cost, don’t just say ‘no’ or prescribe to them what they can have for their money. Instead work out with them what aspects of the project are core (this maybe branding, stationary and a simple website for a new company) then create a shopping list for them of everything else (in this example maybe this would include things like a blog, a short introductory flash animation on their site and a print advert design). Each item having a cost associated with it. This way a client knows what the basics cost and can pick and choose what extras they can afford immediately and what they will have to leave until they are making a profit to have created. Why do this? Sure the client may just say they want everything at the lower price and you will have to decline – but more often than not clients are reasonable people, and just haven’t realised the work involved to create the result they want. They may take just the basics now and come back in future for some of those snazzy extra features they couldn’t afford to begin with. Repeat business is the best kind. Business via referrals is just as great. This methodology will help you on both these counts as well as create happy clients. Win / win.
My other main piece of advice would be this: NEVER TAKE ON WORK AT A LOSS FOR THE PROSPECT OF LATER FAIRLY PAID WORK. Yep, that one is in capitals. I see this a lot on the online design bidding work sites. If you accept a very low rate for a project then that is the value of work you can provide to the client. Design really is a mixture of design expertise and time spent, so if only a few pence are spent then the result will inevitably be worth exactly that – high quality work leads to repeat business and satisfaction for both your client and your company portfolio. Quality always trumps quantity for many people, and those are the sorts of clients with whom your company will build the most rewarding long term client relationships with. If a new business project is very likely to lead to an ongoing or long term client / provider relationship you may wish to discount them in some way at a fair rate possibly by offering a money off voucher for their first project or perhaps even a money off credit coupon for their next project with the purchase of the first. Occasionally I have found a reduced rate a great bargaining chip for long term work by signing a contract with the client whereby they guarantee a certain amount of work at this reduced price. The volume of long term work gains the company a long term happy repeat business client worth the reduced rate.
It is tempting when you are new to the industry and just starting your business or work is low to take on cut rate work or even free work. But in the long term, unless you are just building a portfolio, concentrate on self promotion and findind new clients during these times. If your business has just a little commercial work or need a portfolio building and want to do cheap or free work to help you learn, ensure the work you do benefits you – work for charities or local business’ and friends who will really appreciate your efforts and could not have the work done any other way. Or enter competitions (checking they are legitimate and well known) to gain exposure and practice. Another option is to take on internships where the design company will really help you learn as well as help you get used to a real working environment. Of course, as soon as you start getting real clients in, these are the activities that have to go immediately in favour of self promotion and the client work itself.
Wandering slowly back to my initial point – there is really no single way to price your work or time, the key is to ensure the pricing methods are fair to all sides. Have a read of the article I spotted this morning as the advice is universal. It applies not just to small business, freelance illustrator, graphic design or web pricing – but indeed anything you do in any industry for any client.
So, which method will you take for your next project quote? The hammer? The Picasso in the Park method?
Let me know your thoughts as I am curious to see who uses this approach and who believes firmly in a per hour or per day flat fee system or rate card system. Do you have fixed fees for business cards or leaflets? Is anyone still charging per page for websites, even though a page could take 30 mins for one design or 2 days for another? Or indeed anything else anyone has to comment.
You can view the great little post that sparked this little ramble on pricing here:
Goskylar.com blog post on freelance pricing
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