If you take anything at all from this post, let it be this:
You’re worth it.
That price that you have in your head that keeps bumping around, with one half of you saying “Yes, I would love to make that much for this job” and the other asking “But…is that actually fair?”
You. Are. Worth. It.
You’ll hear that line repeated rather a lot. Get used to it.
At March’s Rise & Design we gave each other a massive boost, reminding that yes, we are totally awesome and we deserve fair pricing for the great work we do. We discussed value pricing, product pricing, hourly vs project prices, and oh so much more.
Honestly, we talked about so much stuff this is the first time I’ve had to pick and choose what to focus on in the recap, because unless you write me and say “BUT ANNA I WANT TO READ 3,000 WORDS,” I’m going to try and keep this as succinct as possible. Register your complaints here.
P.S. This was written by conversion copywriter Anna Hetzel who is one of you: she is constantly trying to figure out what her work is worth. Let’s figure this out together.
P.P.S All these beautiful photos were taken by the über talented Sean Gorant.
One of the biggest debates in the freelance/entrepreneur creative community is the pros and cons of hourly vs project based pay. There was a good mix of Rise & Designers who used both methods. We’ll focus on hourly first.
+ Well, it’s way easier to track which means it is something that your clients can sink their teeth into. In a sense, by using hourly pay you are speaking their language.
+ You are covered when a project ends up taking way longer than expected.
- What hourly pay doesn’t take into account is all that skill and expertise you had to accumulate in order to be able to do a project in a day. In other words, you can’t value price your work with hourly pay.
- You are worth more than $15/hr. You are worth more than $50/hr. Your potential clients will probably balk at a $100+ hourly rate even if you are more than worth it. It takes more convincing and education for clients to see the validation in that number. The real con here? All they’ll be thinking about is what it looks like if those $100+ hours start piling up.
Ways to strike a balance:
Set yourself an hourly minimum so you can guarantee you are at least getting a baseline fee. This will help alleviate the stress of worrying about how fast you work. You can also set a flat fee for the project with expected hours included. Be open and transparent about the hours the project takes, and anything above the original proposal means extra for the client.
But wait: if you go above the expected hours spent, be sure to explain to your client that it could mean there was a change in scope, direction, expectation, or understanding of the project. This is (usually) not on you.
We’ll just jump right in.
+ It’s much easier to do value-based pricing. What does that mean, Anna? Well, so glad you asked, gentle reader. Instead of looking at how much time a project will take you, look at the value you are offering your client. You aren’t just creating a logo for them, you are giving them brand recognition and authority in everything they do. That’s almost unquantifiable.
Another example: if you are building a new website for them and you project that new beautiful website will bring them in double, or even triple, their current revenue, you can justify your worth to that client. Show them the possibility of how your work can bring them business.
+ Hey, you are good at what you do. And you have gone to school / had so many years of experience / have helped so many clients find success that it doesn’t matter how long it takes you to complete a project. What matters is what it does for the client in the end. When thinking about pricing put all of that expertise into your price. Remember: you are worth it.
- It can be a bit more arbitrary from a client standpoint who tend to think in hours rather than value. You have the extra task of educating the client of what your work will do for them and why you are worth it.
- Sometimes projects take longer than expected and it has nothing to do with the client. Let’s be honest- there are some projects that take you a bit to wrap your head around. Project-based pricing is a balancing act of time vs value and it takes practice to figure that out.
Pricing for products
Pricing for physical products is a whole different ball game. There are different factors you have to consider: markup, supplies, time in development, shipping, competitive pricing, and royalties.
This all requires a bit of math, but the big note here is this: don’t forget what it took you to develop that amazing idea. You have years of experience that you are bringing to this one design. Please have that factor into your price. You are worth it.
What about royalties, you might ask? Great question. We had two opinions offered during Rise & Design. One was “HECK NO” don’t accept them: charge a set amount and don’t worry about if it does well or not. If it does well that client will be coming back for more. The other was “HECK YES” accept them: royalties give you power and validation and it helps you feel like you’re not just giving away your work.
The question of fair- raising your rates
Ok so cool you’ve figured out how to price your work. But you’re ready to grow. You’re ready to take your business to the next level, or in the words of Patrick, “level grind.” How do you start raising those rates without feeling like you’re being unfair?
If you’re interacting with a repeat client just be transparent. Remind them that inflation happens and that your expertise has grown. You can point out the value you’ve brought them with past work to help justify (to them, not to you) your price hike.
If it’s a new client, things are a bit different. If you’re thinking about raising your rates it means that your skill has grown and it probably also means that you’re in higher demand. It is ok to say that. Tell them that you have more clients so yes, your time is worth more. For all that potential client knows, you are in high demand. And you know what? You are!
At the end of the day, make sure the conversation is about them. They don’t care that you need to pay rent. They want to hear this: “We want to help you grow but this is what we need to make that happen.” Fit yourself into their story, not yours. Price anchor yourself against a past client to further validate your pricing.
PS. If you are closing more than 50% of your leads, you’re not charging enough. Raise your rates!
Help them dream- it all comes down to empathy
Pricing fairly and raising your rates all boils down to empathy. Your job is to not only deliver on the project but to help the client dream of the possibility of what the project will do for their business. You can’t promise specific results but you can promise customer satisfaction. You can promise an end product that will move their business forward.
When you are conducting your first calls with the potential client, be sure to ask them these key questions:
“Why are you here?”
“What will happen if you don’t do this project?”
“What is your ideal outcome for this project? How will it help your business?”
This will give you fodder for speaking to their deepest needs and desires. At the end of the day a creative’s job is to be a business whisperer. You have to get to the core of the “why.” Knowing and understanding that why will not only make you invaluable to the client but it will also help you deliver an even better product. The more you include them when you create, the more acceptance there is.
The other beautiful thing about empathy is sometimes the client just isn’t ready for your quality of work. Let them know you’ll be there when they are ready, but be honest with them and yourself. They will learn the hard way (ie go to Fiverr), get a terrible product, and wish they had started with you at the very beginning. Be nice!
You are a badass- battling the imposter syndrome
We couldn’t talk about pricing without talking about the elephant in the room. Imposter syndrome is a very real thing and the bad news is that it never really goes away. But don’t fear, gentle creative! There is still hope! There is always hope.
If you are pitching to a client who is in an industry you’ve never worked with before and they ask you about it, it’s ok. Stop sweating. Remind yourself this: your industry is [enter what you do here] You are a professional, and part of what you do is the research to get to know that industry backwards and forwards. Remind them of your professionalism.
Boost your confidence and theirs. Show the potential client numbers from projects you have done in the past of how your work helped others. If you don’t know those numbers go out and get them. Not only will that totally boost your confidence but you’ll start a new interaction with an old client, inadvertently remind them that you’re awesome, and who knows!? Maybe they have another project in the wings for you.
Key tip: make yourself a cheat sheet of awesomeness. Put down your wins, the numbers, the clients, and look at it before meetings to boost you up (and to have something to reference when the potential client is like “Mmmmm I don’t see how this is going to be worth it.”).
The a**hole speech
This tip is pretty short. Set expectations at the very beginning. Tell them when you are available. Tell them what your job is, tell them what it isn’t. The important thing is to actually have this conversation. Don’t skip it. If you skip it you run the risk of being burned, burnt out, underpaid, or overworked.
Planet Money- Grey Goose Interview- How they changed their brand and went after a different type of client, even though the product was the same.
You’re My Favorite Client- Mike Montiero - Ask the right questions and be a total pro.
Design Is A Job- Mike Montiero - How do we deal with clients? How do we convey value?
Fuck you, pay me – Mike Montiero - ... self-explanatory
Breaking the Time Barrier – Mike McDermitt - Actually download it for free with that link. Just read this. Ok?
Quote Higher Rates: If you close more than 50% of your leads, you’re not charging enough - Yeah. My mind was blown too.