12 Realities of Pricing Design Services

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:

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

Published July 2nd, 2008 by

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101 Responses

Comments are now closed on this post.

  • 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.

  • Wsdcent, July 2, 2008

    Great post.
    Surelly is so dificult to price a design. Thanks for sharing here with us

  • Vandelay Design, July 2, 2008

    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.

  • 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.

  • Shanna, July 2, 2008

    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!

  • E. Nicole, July 3, 2008

    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…” ;)

  • David Airey, July 3, 2008

    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.

  • VandelayDesign, July 3, 2008

    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.

  • liam, July 3, 2008

    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!

  • Hendry Lee, July 3, 2008

    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.

  • Tracey Grady, July 3, 2008

    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.

  • Jean Gogolin, July 4, 2008

    Good, carefully thought out post.
    I would add only one thing: never barter!

  • Shanna, July 4, 2008

    @Jean.. oh SUCH a good point. Never barter! It just never turns out like you would think. ;)

  • Vandelay Design, July 4, 2008

    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.

  • Aaron Stanley, July 4, 2008

    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.

  • 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.

  • Vandelay Design, July 4, 2008

    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.

  • Matthew Griffin, July 4, 2008

    Thanks for the link, Steven.

  • Julia, July 6, 2008

    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! :-)

  • Nice Post
    Thanx for sharing :)
    Stumbled your Url Cheers!

  • Recruitment Agency, July 11, 2008

    Nice post
    Thanks for sharing with us!

  • SEO Webmasters, July 12, 2008

    Good Informative post
    Will Keep in touch with you :)

  • Cor le Roux, July 19, 2008

    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.

  • Zeke Shore, August 1, 2008

    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.

  • This was a great article and it is cool to see that there are other people out there that go through the same thoughts I had when starting out. keep the great articles coming!

  • David Field, August 27, 2008

    I don’t know what you’re all talking about.

    Pricing is easy and automatic if you follow The Golden Rule – “Charge as much as you can ask for without laughing.”

  • thanushka, September 22, 2008

    Find the annual salary that a person of your skills and experience gets. Then divide it by the number of productive hours. (remove vacations, weekends etc) Average is around 1500 HPY. Then divide it by salary per year. That is your hourly charge. Then carefully decide on how much time the project takes to do. Remember this is what you do for a living. Price should be fair on both the client and you. Try to talk in your client to ‘pay per revisions’ if the client is a P..I…A… ;)

  • Coghill Cartooning, September 30, 2008

    Nice post. There are some good insights that many might not know to look for until getting burned a few times. A great heads-up, and a reminder to those that have been there, but keep forgetting.

  • Such a tough issue, its all kind of a gray area, it really depends in the end on what the client is willing to pay and then remember point number 10.

  • Miss Blossom, February 17, 2009

    Some really relevant points raised here. I review my pricing constantly, taking into account how fast and how much knowledge and specialist expertise I bring into an hour, as well as what my competition are charging, as well as what the customers will want to pay in my niche area. If I charge too much my customers run a mile, and if I am too cheap they treat me like an idiot. Mostly though, these days, people are happy to pay whatever I charge because I do unique work in a particular style and market.
    I also think it is important to be fair in business so I do charge a little less than some other poeple/studios at my level, because it’s fair to the customer.

  • Kerry, March 9, 2009

    Hello,
    I’m on the opposite side and am looking for a good designer(s) for a new website. I don’t need any programming, just a great design. What would you recommend I do to find some great designers?

    Kerry

  • Ktown Photographer, March 19, 2009

    great list. I find it so hard to price out designs for clients.

  • Web Design, April 4, 2009

    Pricing a job is often harder than doing the job itself, from even a very small brief you can instantly churn the cogs in your head to determine how much effort/time and different skills come into play before you even think of the price/cost/investment.

    Point 10 is very common nowadays especially with people tightening their purse strings, totally agree on why working with you should not be about the money, it should be about how you can help and make a difference. Of course most of us are looking long term with working with clients, especially if both parties benefit.
    Above all though it’s about providing good service and costs should be seen as investments and putting their businesses forward in the best light possible.

  • Werbemittel, April 16, 2009

    pricing design is very important for marketing it is very interesting and useful.Every designer needs to develop his or her own method for pricing.

  • This is a brilliant ready reckoner for all those times when you are feeling a bit uneasy and confused over the pricing of designing jobs. Very helpful. Thanks for the informative post.

  • I would add – asking for a 50% downpayment to begin the project is a wise move. It’s another method of weeding out the tyre kickers because it shows the client is serious. It also motivates you to progress the project because you’ve already been paid – and you’re chasing the final carrot at the end of the project!

  • Kristof, May 21, 2009

    Spot on. Very useful info for all freelancers. Followup post should be on actually collecting the money you charged.

  • Albert Pak, May 21, 2009

    Great article, very nice tips :)

  • Houston Web Design, May 28, 2009

    I have struggled with pricing for a long time. I now feel comfortable getting paid what I am worth. I think it is important to have some sort of system for pricing design services. Not having one causes me to take way to much time to come up with a quote. The design part is critical but selling the job properly is very important. I think that a bid should spell out what you are gong to do in detail so that any additions can be marked up properly. Most other industtries do this and I would like to be the same.

  • Website Design Services, July 6, 2009

    In the past, I struggled with under-charging my services because I had the wasn’t-good-enough mentality. Just recently, I realized I was a good designer, even great compared to others. With that realization, I started to charge higher while proving others I was professional and skilled.

  • Webline, July 20, 2009

    Those are very important tips to consider. Thank you very much for sharing.

  • Latest News, July 31, 2009

    Great Idea, am working on freelance projects and its just started i know the pricing policies where kept very low these days..

  • freelance worker bangladesh, August 18, 2009

    the pricing is really important factor for design works.i have experienced that even if offer lower rate buyer confuses about the quality, so quality & price both to be considered in the designing world.

  • Alaska Web Design, September 1, 2009

    This post affirms what we have struggled with for years. At Affordable Alaska Web Design Company we are afraid of pricing ourselves out of the market or having the client refuse.

    Since design work is often word of mouth, we frequently are swayed by the complaining client. This was a good post.

  • Dan, October 29, 2009

    This is a fantastic article. And the posts attached to it are just as good as the original post. Here are my two cents (grossly over market value! )

    Before I even talk pricing with a client, I learn their business inside and out. I speak to the owners/executives, the front line employees, the front office staff, etc. I want to get a good feel of not only what the client does, but who they are as individuals. Going out on a limb here, I feel that a design project, should match the “feel” of anyone potential customers of my client will talk to.

    In my presentation, I research local competition, national competition of my client. What do their sites look like, what features do they have. I throw this into a pie chart. I use the “features” of the competition’s site to baseline the work needed. I include screen shots of their websites. This is design work, clients are better informed with visual aids.

    Factors for pricing:
    1) How much work needs to be done, see references above.
    2) I produce at least three proposal ideas- using features to increase, decrease bottom line pricing. My rate is always standard, I do not give on my pricing. EVER.
    3) Economy/size of the local area. If there is a ton of competition in an area, it will take more features, etc to set them apart. Smaller towns where there is less competition, we may be able to organize the features to maximize the ROI.
    4) I do not negotiate on pricing. However, I will use “features” as bargaining chips. There are always chunks of code we have stashed away that we use on a regular basis, like form handlers. If a client wants to negotiate, I may toss in the form handler for “free”. This allows them to feel like they are getting something extra, and yet I have lost no additional time because i already have the script.
    5) Educate Educate Educate. In my bid package, I include informational resources with supporting information. For instance, an article on how corporate branding is essential for expanding visibility and increased business.

    I have found that the more education you provide the client, the more comfortable they feel with your skillsets and ability to produce the desired result.

    Just my two cents.

  • SWP, November 4, 2009

    nice article, great tips

  • Nashville Marketing Company, November 13, 2009

    The key is to also not undervalue your services. Many freelancers will these days.

  • RJC, February 5, 2010

    It feels like if you are freelancing, you are taking a consultative capacity. You are right about wearing multiple hats.

    Freelancing is after all a business. Also as a designer/developer, you are already wearing multiple hats because of all the different technologies.

    The fact that pricing is dependent on skill, reputation and service makes it even more intriguing.

    However, nowadays, there are many web services that are automated, things could change soon for freelancers.

  • kelowna photog, March 15, 2010

    I was recently told by a client that I should charge way more, not sure if I should as I do it as a hobby. If I can make a little money, that the payoff for me.

  • Kelowna Printers, March 30, 2010

    Pricing on design has always been a challenge. When we charge by the project we have found, we need strict guild lines that the client must be aware of upfront. By the hour seems to work well as long as you keep the client informed about the tab and where it is at.

  • Josefina Agüello, August 26, 2010

    Excellent post, very complete.
    I think pricing is the most difficult part of freelancing. I always offer a lower price =/

    Very nice tips thanks for sharing!

    Josefina Argüello – E-marketing

  • carson, December 3, 2010

    thanks for the tips, just went through and changed my pricing. I will have to go through and make sure I take these tips into consideration.

  • studiojones, March 13, 2011

    Great tips. I like that you started by saying there’s no exact formula—because there really isn’t. I’ve learned that as long as you don’t undervalue your time and effort—or rake people over the coals with ridiculous pricing you’ll feel good about what you charged. It’s all about being comfortable with the amount and being fairly compensated for your work.

  • Web Design Oxford, January 5, 2012

    I think anyone who owns a design company has run across this problem, and this article rocks. However, I am facing the pricing issue today in a strange situation.

    I have a client that wants designs for a clothing label. An artist friend of mine said that I should give him a lower price and ask for royalties…or a much much higher price for full buy out. Has anyone else experienced this model? Need some advice. Thanks in advance…Jeannie x