Do you feel like you're leaving money on the table and scaring off potential clients with your pricing? If so, you're not alone. Many designers struggle with pricing their work effectively. In this blog post, I'm going to share the strategies and techniques I've learned over the past 10 years of running my own design business. These strategies have helped me perfect the art of pricing and have allowed me to work with a wide range of clients, regardless of their budget.
There are primarily three types of pricing: hourly based pricing, fixed pricing, and value-based pricing. While hourly pricing is the most common approach, it often fails to capture the true value you bring to the client. For example, if you create something in just one hour that generates significant value for the client, that value is not accurately reflected in an hourly rate. As a result, it's important to move away from hourly pricing as quickly as possible.
Fixed pricing is another option, where you set a fixed price for a specific service or product. While this approach is better than hourly pricing, it still doesn't capture the actual value you provide. For instance, creating a website for a global brand like Nike would have far more value than a smaller local business, and its price should reflect that.
This brings us to value-based pricing, which focuses on understanding the true value of what you offer to the client. The traditional approach to value-based pricing involves having a conversation with the client to determine how much money your work will generate for their business. However, this approach has its limitations. Clients often struggle to predict the exact financial impact of a new website or brand. Additionally, as a designer, it's challenging to guarantee a specific income for the client, considering there are external factors that can influence their overall performance.
Instead, I recommend a modified value-based approach. Rather than focusing solely on the specific financial impact of your work, consider the type of business you're working with. Understand where your client falls on the spectrum between small businesses and large corporations. You can gauge this by looking at factors like recent funding, the size of their team, and their overall business scale. By understanding the client's business and budget, you can adapt your pricing accordingly.
Once you have a general idea of where your client falls on the spectrum, it's time to have a conversation with them to gather more information. Ask them questions about their business, their current situation, and if they have a budget in mind for the project. If they have a budget, great! You can work with that. But if they don't, it's best to provide a range of costs based on your understanding of their needs.
When presenting the pricing options, always state the highest price first. This pricing structure helps anchor the client's perception, making the lower prices seem more reasonable. By offering a range of options, you give the client the opportunity to choose based on their budget and the level of service they require.
In your proposal, outline the specific offerings for each pricing option. The first option should be the all-inclusive, premium offering with the highest price. The second option should be a standard approach at a mid-level price, and the third option should be a basic offering at a lower price point.
To further ensure the client's commitment to the project, request a 50% upfront payment. This not only demonstrates their seriousness but also helps cover your initial costs and time.
These simple pricing strategies allow you to maximize your earning potential while offering flexibility to clients with varying budgets. By tailoring your pricing to the value you provide and understanding the type of clients you work with, you can build a successful one-person design business and escape the matrix.
If you're interested in learning more about running a one-person design business or need guidance on pricing and client acquisition, I invite you to check out my free brand discovery survey and the freedom roadmap in the description below. For those looking for personalized coaching, I offer a three-month program where I help you find and close high-paying clients, improve your design skills, and build a killer portfolio. Apply for the coaching program by completing the form linked in my description.
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I am a brand strategist and designer for small-mid sized tech startups. I will help you grow your dream one-person businesses so you can live with freedom & autonomy.
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