Believe me, there is no such thing as the “right” price of design
As I discuss how to decide on price of design, it could help a lot if you stop worrying about the price of India or America and focus on your pricing. I am in South Africa. I earn enough to afford myself the occasional holidays from December to January on any place on the planet.
As a Freelance Designer or Design Firm:
You need to stop listening to people talking about how cheap the cost of design is in Africa or Asia. You need to close your ear to client talking about how cheap their previous designers were.
You need to erase all conversations that justified cheap pricing of design. You need to stop being such a wimp, just grit your teeth and continue reading. You do not have to thank me, my clients pay me enough. While you moan and groan and battle to pay your bills, I just ordered 3 iPhone 6′s for myself, my girlfriend and my 16 month year old son. Why? Because I can.
The most expensive painting ever sold cost USD$250 million
It is called The Card Players by Paul Cézanne and it was created by one man, Paul Cazanne. This painting was not created by a company of 250 employees who work 9 hour days and 6 day weeks. It was created by one man. So what makes you think that just because you are one designer you should charge peanuts and that because you are a company, you should charge millions?
Here is the real catch: Paul could NEVER have sold that art himself for THAT much. It took the royal family of Qatar, without quibbling on price, to outbid all other buyers, at $250 million. It was their perception of how much the art was worth, fro them to pay that much.
Perceived Worth
There are thousands of artists in the world who theoretically could have created works just like that of Paul. They just would not sell as well as Paul’s art. The reasons is because of the history associated with Paul’s work, how the buyers of the art valued it and how much they were willing to purchase it for. Is it worth USD$500 million to me and you? No. Is it worth that much to the owner, the Royal family of Qatar? Yes.
Design As a Service Has a Perceived Worth
The golden question is how much your work is perceived to be valued at. Why would a client who has $20 000 in their bank balance pay you more than half of it and not go to someone else who will do it for $500 ? Why pay you $10 000 and not just hire someone else who will charge $500 for it?
Increase The Perceived Worth Of Your Services
You Do Not Want The Client’s Money, You Want To Manage Their Investments
Make this your mantra. The best negotiators in the world know that. Its about time that you know it too. So when you go into a negotiation, stop imagining those 0′s and that inflated bank balance.
This is an exchange. Stop thinking about how it will benefit you and start thinking about the value of what you will be giving to the client. You are essentially managing their investment on a design that they wish to create.
Your client will detect the fact that you do not want their money and this will help increase their perceived value of your work. It is in-built in our systems that the most talented individuals rarely focus on financial gain. You need to become on of those individuals.
Create a Separate Billing, Accounts and Legal Department
Under no circumstances should YOU even think of calling a client to request a payment. Ask you sister or brother to do it. They must introduce themselves as a simple, “Hi So-and-so, my name is Samantha from the accounts department at CompanyName. You recently completed a job with Name-of-designer and I would like us to discuss your payment schedule for services rendered to you.” If a client takes more than two weeks to settle an account – pay them a visit, YOURSELF. And explain that in under 2 minutes, you need a plausible explanation and that you will not return and your accounts department will deal with late payments and if they cannot do that, they will hand over matters to the Legal Department.
Create a Blisteringly Good Portfolio
As you improve your design skills – you will increasingly know how deliver design that has a high ratio of delivering the exact message that the client requires. Your work will literally increase the value of the item being designed exponentially and the client’s perception will be crystal clear that their money is well-spent. The only way you can convince your clients that your design work is worth that much is by building a 10-star portfolio of work from known brands that the client knows. You have to do this. You have no choice. Once you have such a portfolio, you do not have to justify your design price to anyone ever again. Your perceived value becomes very high.
Build A Design Portfolio Without Doing Speculative Work
A very simple strategy is to learn to write emails. It takes an hour to compose a short 200 word email. Request to bid for projects that solve problems to the biggest companies in the land, but do not carry out the entire design. Outline your strategy and draw sketches to show how you can solve a certain problem that exists. If they approve of your work on the project, bill a flat $100 per hour. When you research on the internet, count the hours. When you sketch on a drawing board, count the hours. And when you compose email, by all means, count the hours.
In the project proposal that you send, you MUST include the hours that you have worked and bill for it. Never speculate – you do not have to gamble with your time. Once you have completed the work, send through your proposal to the client. If they approve, you MUST add the amount you have already billed to your final quotation. All you need is to repeat this process 5 times and you are done.
If Your Project Is Not Accepted
Swallow your pride. Gather your losses, and celebrate. You officially have the first highly impressionable project proposal work on your portfolio. Rinse and repeat. Eventually you will strike gold. You don’t have to thank me even then, my clients pay me enough.
If Your Project Gets Accepted
Head over to http://www.platowebdesign.com/web-design-pricing-calculator.php and get a quotation estimate. Now comes the tricky part. This is gamble that almost always works. Take the highest quote and add 15% on top. Invariably, all clients will negotiate. You need to fly over the negotiation and safely estimate that they will demand a minimum of 25% reduction. Do not be afraid to safe-guard your salary. Play hard and you will come out on top.
Listen, life was not always this perfect
It has not been a jolly walk in the park for me. My current pricing is dependent on how I evaluate a project and this is itself depends on may factors that are highly specific to many things to me but it can range from $150 to $350 per hour and from a minimum $2500 for a website to $30 000 for a complex eCommerce solutions very easily. So why was I charging $1 to 5$ per hour just three years ago? Here are four reasons, and I am sure that some of them apply to you right now:
I Was Very Naive
I am not saying you are naive. No. I am just saying that I was once like you: naive. I was once a slave to my profession. I grovelled and would accept work at $1 per hour – and thank my clients profusely for it. Like a beggar, I would not choose. What the client gave – I would accept with a gladdened heart. Any price was alright. As long as I could pocket something. Half a loaf of bread was better than nothing. In my case, crumbs of bread where better than nothing at all.
My Self-confidence Was Low
I felt that since I did not pay thousands of dollars for a certified education, that I did not deserve to get paid what was right. My design prices suffered because of that. And I got poorer and poorer. I got so poor that I would be late for months at times with my rent which was a paltry US$150. That is humiliating stuff right there.
Debt Had Sprung Up
I couldn’t pay my bills. The price for my average website was US$150. We are talking about a 10 page custom designed websites here. All I wanted was a plate of food and just enough “to get by”. Life was tough – I had to borrow monies from friends and family to buy food and survive.
I Had Predatory Clients
One of my clients come and visited me in his new brand new Land Rover which at that time was $120 000. He sauntered into my tiny little apartment and asked that I do the design work then he would pay me if he was happy. After spending 6 hours straight, producing stunning artwork for his designs he would take the designs, put them on a USB and kindly request that we go to his car.
Once inside that expensive piece of equipment, he would reach into his purse and take out the equivalent of USD$5. This was after an agreement of US$70. He would put on her expensive shades and say he was in a hurry and I had to get out of her car. After getting him designs worth at minimum, US$500, he would feel alright paying US$5.
What was so fundamentally wrong?
So many questions kept rotating in my head until I started becoming depressed. I stopped hanging out with my friends. I would borrow movies from the club and spend days staring at that freaking television. What was wrong with my designs? What was wrong with my design prices? More importantly, what was wrong with me? And what was wrong with my clients?
What was wrong with my designs?
Nothing. I had a 100% approval rate for my designs. Now that I think about it, I believe that there is more that happened, than that which met the eye. I would work on a US$25 design for 3 days. I would accept 500 changes to artwork without requesting a review of the quote. I was highly critical of my own, I had no faith in my product.
What was wrong with my design prices?
Sub-consciously, I wanted to be more affordable in order to gain a competitive edge. In my quest to do that, I absolutely won that race. I was so cheap, you could call me a volunteer designer. Indeed, I became the most affordable designer. Yes, I had triumphed in my stupidity.
What was wrong with me?
All my life I realized that I had certain traits that were absolutely bad for business and could have made me a beggar on the streets in no time at all. I had a very low self-esteem. That coupled with the fact that I felt that I did not deserve to be in the field were dominant factors. I hated arguments and conflicts. I would let people ride all over me because I felt a “Happy Client, Is A Loyal Client”. I was very bad at negotiating and would avoid it by under-charging so that the client would simply have no option but to agree. I was over-appreciated. I was not a victim - I made dug myself into a wrought-iron grave. I would reward a USD$50 price for design with USD$5000 worth of work.
What was wrong with my design clients?
They knew a loser when they saw one. I had a talent of picking them out. Consistently. They did not believe I was worth it. They would grab a cheap deal very aggressively.
I Can See Clearly Now
You are the sole master of your time on earth. If you spend your hours slaving away at your computer and are struggling to make ends -then you need work on building a perception in the minds on of your clients that your services are worth the amount that you quote.
If you do not value your time on this earth, you will spend more time making other people’s dreams to come true besides your own.
Pricing for design is NOT based on the market for the services. Even if there were two hundred thousand clients requiring my services, I will not drop by a dollar. A negotiation will only work for the benefit of the designer if the clients know that you are not motivated by money.
Digital design and development are a combination of art and technology, and unfortunately, there is no way to calculate the value of art.
There is a psychology dedicated to the evaluation of pricing as an individual or as a company and it has nothing to do with what everyone tells you.
When it comes to pricing, a company is no different to an individual, it really has nothing to do with how many people will work on the project. It has everything to do with the perceived worth in the mind of the client and your ability to build a portfolio that will allow you to dictate in a negotiation.
My favorite answers to why I price my designs the way I do:
“You cannot place value on something that does not yet exist. It has a perceived value. This is a perceived estimate of how much the work I will do for you is worth.”
“With all due respect, this question is simply the same as asking what the cost of the Internet is to me. I will know for certain judging from how much I get out it in return, both spiritually and financially.”
“It is not about the time I will spend, it is about how much I believe in your company.”
Final Thoughts
Pricing your services is a necessary part of working as a designer. If you take all pricing factors into consideration, you should price your services correctly. Remember to not feel guilty when raising your fees. A work of art that probably took one week was sold for $500 million.
Stop blaming yourself for your client’s inability to pay you.
There are times when I have quoted what I genuinely felt was a very high price and the client said, “That’s all?! Great, let’s get started!” That always left me vaguely puzzled about THAT particular client’s perceived of the designs that were required.
At this point in time, do not do speculative designs. Prepare yourself rigidly for negotiations and get over your fear of losing.
Once you have “liked” our post, head over to: Best UI designers on Earth
