For most designers pricing services is not something that is the highlight of the job. Still, it is something that you’ll have to deal with if you’re freelancing or working for a small firm. Here’s my take on pricing web design services.
1. There’s no exact formula.
Unfortunately, there’s no right or wrong way to price your services. Every designer needs to develop his or her own method for pricing, and even then, you probably won’t be able to follow the same formula on every project. Because each job will be different, it’s difficult to develop a method that will work well every time.
2. Both hourly pricing and project-based pricing have pros and cons.
Everyone has different ways of doing things and this is very evident by the information that you will see about how you should base your pricing. Some, like Matt Griffin, feel that you shouldn’t charge by the hour. In general, project-based billing is more common than hourly rates, but that is somewhat of a gray area. Following Matt’s article, Intervals posted 7 Reasons You Should Charge by the Hour .
Here are some resources for choosing a pricing strategy:
- What You Should Charge and Why You Should Stick to Your Price - Positive Space
- Trading the Hourly Rate for Task-Based Pay: Should You Do It - Freelance Switch
- Deciding When to Use Project Pricing - Wake Up Later
3. Pricing is a necessary part of freelancing.
I think most designers would like to focus on the work and forget about things like pricing. Unfortunately, if you’re freelancing it’s a necessary evil. Whether you like it or not you will have to deal with the issue. For many of us it’s something that we’ll never really enjoy, but we need to at least become comfortable with it. Freelancers wear a lot of hats, and pricing is just one of them.
4. Mistakes are a part of the process.
I think everyone has at some point gotten themselves into a position where they wish they could go back and set a different price. In some cases you may be justified to increase the price do to changed circumstances or additions by the client, but this may not always be the case. If you’ve made a mistake in pricing, realize that it’s normal and learn from it. The more you learn from your experience the less of a guessing game it will be.
5. Your prices will affect your own outlook on your services and it will also impact your client’s opinion of your services.
When you see a low-priced designer what’s the first thing you think? He or she must not be very skilled or experienced, right? It’s pretty obvious that your prices will impact the mentality of your potential clients. Some will only be looking for bargain-basement pricing, but others will be measuring you by what you charge, whether they realize it or not.
However, your prices have a bigger reach than just the opinions of your clients - they also impact your view of your own services and abilities. By pricing your services very low you’ll eventually convince yourself that you’re not worth more. On the other hand, pricing your services high (and being able to land clients) will give you the confidence that you can be an elite designer. Of course, your mental approach can only take you so far, but it’s my opinion that this plays a role in your success based on your perception.
For more on this subject see my post at Freelance Switch, The Subtle Effects of Pricing on the Mentality of Clients.
6. Uncertainty is Common.
Freelancers who have been designing and pricing services for years may have the whole thing down, but if you’re feeling uncertain about pricing, don’t feel like you’re alone. Most freelancers struggle with pricing, so being uncertain doesn’t mean that you’re inferior. Take the time to educate yourself (some of the links in this post should help) and keep working on developing a better system or model.
7. The variety of prices is as wide as the variety of talent levels.
Just because you see another freelancer pricing services ridiculously high or low, don’t feel like you have to do the same. Anyone can sell web design services. Some are not very talented or experienced, and some have unbelievable abilities and incredible experience. Most are somewhere in the middle.
While clients may argue by comparing your prices to another freelancer, be ready to backup your pricing strategy be explaining why you are worth what you are charging. You can find someone willing to do the job for just about any price if you look hard enough, but in general, you will get what you pay for.
8. Losing a job isn’t always a bad thing.
Newer freelancers are often tempted to price their services at whatever level will get them the job. If the experience and building your portfolio is what’s most important to you at the moment, this might not be a bad idea. Otherwise, if you need to earn enough money to support yourself and your family, losing out on a job because of price may not be a bad thing at all.
We all have a limited amount of time available, and taking a job that doesn’t pay what you need to make isn’t going to be ideal. Hopefully if you pass up on a job because of the price, something else will come along that meets your needs. Taking that low-paying job can hog your time so that you can’t take other opportunities that come along. This is just something that you’ll have to weigh as you go.
9. Pricing can be a good way to weed out the tire kickers.
I think most freelancers get plenty of emails from potential clients who are pretty unlikely to follow through with the project. Typically, these tire kickers are looking for quotes, but they’ll usually have some reason that they don’t want to move forward or they’ll have some hang up on the price.
While it’s understandable that everyone has a price that they can afford and something that they can’t afford, but I’d prefer to identify the tire kickers as soon as possible so I don’t waste too much time answering questions and making no money. One of the downfalls of pricing your services low is that you’ll get more of these types of clients, and they’ll hang around for a while longer. Price your services higher and you’ll find that a higher percentage of your potential clients are serious about working with you.
10. Some potential clients will think your prices are high no matter what you charge.
Some clients will understand what’s involved with designing and developing a website and others will not. Because there are people out there willing to design a website for next to nothing, some clients will think that you should be willing to do the same, even if your service is completely different. Try not to worry about turning clients off, and focus more on proving a service that’s worth the price (and being able to explain why it’s worth the price).
11. Charging more than you quoted may be necessary.
I think we’ve all had those clients that keep adding new things to be done or changing their minds about what they want. When using project-based pricing this can cost you time and money. However, some situations will justify an increase in the price. Of course this needs to be communicated with the client, but it is an option.
Picture this scenario - You take your care to a mechanic and get a quote for repairs. Once they get inside they find that something else is wrong and needs to be fixed for your car to run properly. Are they going to charge more for the additional labor and parts? Yes. Many times the situations you will find yourself in will be similar.
12. Starting out you’ll probably have to charge less than you’d like.
Most freelancers will find that they need to prove themselves before they’re able to land jobs that pay what they would like to make. Building your portfolio and your experience is a natural part of freelancing. Of course, if you’re coming from a design firm where you’ve already established yourself, this may not be the case.
What would you add?
What have you learned from pricing services? Is there anything here that you see differently?
Additional resources for pricing design services:
Factors to Consider When Pricing Design Services - Most Inspired
The Costs of Underpricing Your Design Services - Most Inspired
Is Charging More the Right Thing to Do? - Men with Pens
How Much Should a Web Design Cost? - Pearsonified
Nine Factors to Consider When Determining Your Price - Freelance Switch
The Economics of Web Design Pricing - Ben Bleikamp
Why Your Rates are Painfully Lower Than They Should Be - Freelance Folder
Freelancer Pricing: Finding Your Buoyancy Point - Rubiqube
4 Steps to Effective Web Design Pricing - Tutorialaday.com
40 comments from readers
1 James Chartrand - Men with Pens Jul 2, 2008 at 10:32 pm
Oh right on, Steven.
This is one of the best posts on pricing that I’ve ever seen, and you’ve taken a fantastic global look at all sorts of arguments. This should be one of your ‘must reads’, definitely.
I appreciate the time and effort it must’ve taken to write this up, too. You certainly didn’t do anything by halves here.
Cheers, and thanks for the link, of course.
2 Wsdcent Jul 2, 2008 at 11:18 pm
Great post.
Surelly is so dificult to price a design. Thanks for sharing here with us
3 Vandelay Design Jul 2, 2008 at 11:26 pm
James,
Thanks for your feedback. I was a bit hesitant to post this because I think so many other designers have more experience than me. I thought maybe I’m just a moron when it comes to pricing and others have it all figured out, but when I did some research it seemed like I could add to the discussion.
Wsdcent,
Thanks for your comment.
4 James Chartrand - Men with Pens Jul 2, 2008 at 11:30 pm
I’ve learned that the posts we hesitate to publish are the ones that are usually our best. Then we sit there and go, “Huh? How’d that happen?”
We’ve been trying to figure it out for a few years, and I think it’s just one of those mysteries. There are a thousand ways to price, no one’s right, no one’s wrong, and at the end of the day, if you feel you did right, then that’s the right price for you, I think.
At least, that’s kind of how I go about it. Sort of. Sometimes.
I’ll have to reread this a few times and do some discussion about it on my own blog - it’s too good to stay just here.
5 Shanna Jul 2, 2008 at 11:45 pm
as already mentioned… this is so totally right on. Thanks Steven. I hate hate pricing out project. Most of the time I opt for project based, b/c it is easier to track.. but on some projects, I have totally regretted that. Many times I have bumped my pricing a bit.. only to be pleasantly surprised with the result.
When you are confident, and busy enough.. ALWAYS test the waters with pricing.. JMO. What have you got to loose if you are already busy!
6 E. Nicole Jul 3, 2008 at 12:34 am
Excellent write up! I think the one thing I would add without a doubt is that sometimes, there’s not enough money in the WORLD to compensate you for the time you’ll spend on certain clients, and you WILL feel it in your pocket if you don’t plan accordingly. I guess that would tie in with quoting more than usual… especially when you can feel it in their correspondence that they’re going to potentially be a pain, LOL.
PS: “Freelancers *wear* a lot of hats…”
7 David Airey Jul 3, 2008 at 4:35 am
Excellent round-up, Steven. You were definitely right to move past any reluctance to publish. My pricing posts just touch on everything you’ve collected.
8 VandelayDesign Jul 3, 2008 at 6:46 am
James,
I think you’re right. It’s not that rare that those posts become some of our best. That’s probably because we do some of our better work when we’re stretched out of our comfort zone. That would be awesome if you do some sort of response/follow up.
Shanna,
Yeah, having the freedom to test some things is definitely a good thing. If you’re not afraid to lose a job you can take some changes.
E. Nicole,
Amen. If a client makes you hate your work, why would you want them? … And thanks for catching my typo - it’s fixed.
David,
Thanks. I appreciate it.
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10 liam Jul 3, 2008 at 10:26 am
Some very well made points with some great explanations. It’s a topic which needs serious consideration when thinking of starting in the industry. Points #11 & #12 are particularly important to bear in mind. Great post!
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12 Hendry Lee Jul 3, 2008 at 1:17 pm
Whenever in doubt, test. That’s how I come up with different prices for my niche products. I think the same advice is applicable for services.
If someone tells you your price is too high, you don’t want them to be your client. Focus on the 20% who bring you 80% of the business.
I like the term “firing a client.”
There are high paying clients who are great to work with. I like the 8th point most.
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15 Tracey Grady Jul 3, 2008 at 9:25 pm
I found myself nodding my head with every point that you made. I think that if you set a pricing level that you think comfortably reflects your services and ability, you will more likely feel confident about the amount you quote, and you’ll be able to project the image that you’re charging at an appropriate level. If prospective clients respect you as a contractor, they’ll respect what you charge as well.
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17 Jean Gogolin Jul 4, 2008 at 8:38 am
Good, carefully thought out post.
I would add only one thing: never barter!
18 Shanna Jul 4, 2008 at 9:29 am
@Jean.. oh SUCH a good point. Never barter! It just never turns out like you would think.
19 Pricing Your Design and Writing Services | Men With Pens Jul 4, 2008 at 9:55 am
[…] post on 12 Realities of Pricing Web Design Services will tell you. (Don’t let the word ‘design’ in the title put you off – […]
20 Vandelay Design Jul 4, 2008 at 10:48 am
Tracey,
That’s a good point about being comfortable with the price you’re charging. Charging too much can actually be intimidating if you truly don’t feel that your work is worth that amount.
21 12 Realities of Pricing Design Services | CrazyLeaf Design Blog Jul 4, 2008 at 11:06 am
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22 Aaron Stanley Jul 4, 2008 at 1:43 pm
There’s one point you didn’t mention, but Tracey alluded to… and that is, pricing is all about psychology and mindset. I learned this the hard way.
If you feel you’re not worth a certain price, or subconsciously you feel you don’t deserve to make a certain amount of money, you’ll always be uncomfortable with charging above a certain amount.
You’ll sort of default to the income level you feel comfortable with. So part of setting your fees is just feeling comfortable with it–that you deserve it.
There’s also the buyer psychology.
The market is made up of a broad spectrum. There are extreme price shoppers who will always think you’re expensive no matter how cheap your services are… and then there are those high-end buyers who will pay premium prices for great quality work.
(And part of communicating that you do great work is charging a premium rate!)
Which end of the market would you rather work with?
The thing is… since there are no rules, you’ve got to make your own. And that’s REALLY good news because it means you can decide on your own what you should be making… get comfortable with it… and start charging that amount. Don’t wait for anyone’s permission because it won’t happen.
23 James Chartrand - Men with Pens Jul 4, 2008 at 2:06 pm
This topic always stirs my thoughts, because it’s a given some people are going to attach personal self-worth to a price tag. In my mind, our self-worth is what it is to us and no price tag determines our value as a person.
So, charging what you are worth is a slippery skating rink, I think.
I don’t think that charging lower rates should be something that brings down confidence of skills or undermines personal value.
We’re not at the high end of things - and we don’t want to be there. Our price tag is no reflection of our talent, ability, skill and value to a customer, and we have a different thought process about pricing.
Like Aaron says, people should charge what feels comfortable to them in line with their values, beliefs and interpretations. Makes sense.
24 Vandelay Design Jul 4, 2008 at 2:22 pm
Aaron,
Thanks for your comment. I completely agree that the price of services like design are going to include a lot of psychology on the [art of the buyer and the service provider. As you said, that can be a good thing if you’re comfortable.
James,
I agree with what you’re saying. My comment earlier about charging what you’re worth really goes back to my early days of design when I was more interested in learning and gaining experience than making significant money. There were times where I could have charged more than what I did, but to me I needed to be comfortable and that meant charging a lower price because I knew that my skills weren’t complete (well, they’ll never be truly complete).
I agree with your philosophy and I think it’s important that we don’t let our prices determine our self worth.
25 Matthew Griffin Jul 4, 2008 at 2:52 pm
Thanks for the link, Steven.
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27 Julia Jul 6, 2008 at 4:57 pm
As someone who’s about to take the freelancing plunge, this whole rate debate is something I’ve been struggling with. I know what I _should_ be making, and what I’d _like_ to make on these projects, however as a newbie, should I ask for these rates? IMO, yes, as many have already stated. I feel I _am_ worth these rates, & I sure hope my potential clients agree!
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38 Cor le Roux Jul 19, 2008 at 3:55 pm
Thank you for this informative write up Steve.
I’m also about to take the freelancing plunge soon. One thing that was of great concern was my pricing structure, but this post certainly answered most of my questions. It’s indeed good to know that there are no hard and fast rules when it comes to pricing.
39 Zeke Shore Aug 1, 2008 at 11:09 pm
In regards to #2… I always use a combination… lots web 2.0 start ups hire me for a series projects (logo, website, development, etc)… in this case i always charge by the hour because I am providing an ongoing design service. When there is one final deliverable, I quote the client a project estimate (which is my hourly rate times how long i think it will take… but I always verbalize this process to the client). I have found that clients like knowing who the quote is established, and it makes things easier if i miss-judge the hours. just my two cents.
40 This Week’s Favourites – July 19th 2008 | terrytoledo.com Aug 6, 2008 at 2:15 am
[…] some cracking posts on the topic of design, one article I found particularly useful this week was 12 Realities of Pricing Design Services. As any designer knows pricing up a project or job can be a nightmare, this post has 12 fantastic […]