12 Realities of Pricing Design ServicesPublished in Marketing
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
4 Steps to Effective Web Design Pricing – Tutorialaday.com