My personal perspective on pricing
Pricing your services as a designer, or even just as an entrepreneur in general, can prove to be quite difficult for some. There are plenty of pricing guides and resources out there to help you formulate the "perfect price", but I am here to tell you there is no such thing. I'll break down my thought process behind the way I price my services in hopes that it will bring you more clarity on your journey of finding the right price.
Hourly vs Fixed
This is probably the question on everyone's mind so let's start here. Which is better? Well, it honestly depends on the project. Let me break it down to why and when I used hourly vs fixed rates for my services.
Fixed pricing is great for so many reasons. For one, it clears up any question marks that might be lingering. It put's the client at ease knowing exactly what they will spend and allows them to budget accordingly. It also allows the designer to maintain a projected income so that they can budget for their own business expenses.
Just put yourself in the client's shoes for a moment. If someone told you they were going to replace the engine in your car and said it would take anywhere from 10-20 hours worth of labor and that's not including parts. At that point, the mechanic holds all the power in the situation. One would hope that they would be honest but is not a guaranteed. In business guaranteed is always the smarter choice.
As a designer, the logo process can take me anywhere from 20-30 hours worth of work. That's including onboarding, consultations, check-ins and the design process itself. Knowing this about my process allows me to formulate a reasonable price based on my hourly rate. So, fixed pricing allows you to offer consistent & fair pricing to your all of your clients.
One down side to fixed pricing is that, on occasion, you may go over the number of hours you typically spend on that type of project. If you are comfortable and confident in your process than this is pretty rare. If you are anything like me and love what you do, then this doesn't really feel like a loss in your head. Honestly anytime I have gone over the amount of hours I thought I would be working on a project it's typically because I did it to myself. Maybe I thought of some new idea that I wanted to explore or maybe I was to distracted the first time around. Either way, you settled on a fixed rate and you should try not deviate from your original price unless the scope of work changes altogether.
As you may have realized already fixed pricing is my preferred method but there are times where it isn't the logical choice. Nowadays I try not to take on projects that aren't part of the packages that I offer, but there are a couple of instences where I do take on projects like this.
1. If a client I am currently working with or have previously worked with is looking to expand upon the services we have already completed together then I will consider taking on projects outside of just branding and web design. If it's something like business cards or social media graphics that I have created many times over than I will still offer a fixed rate for those things. But, if it's a project that is completely unique that I haven't tackled before than I have to charge hourly. I always try to be as clear and transparent as possible in these situations because communication is key.
2. The other occasion where I will charge hourly is for contracted work. For example, there are a couple of other brands that I work with on a regular basis. These projects are typically very different as far as the scope of work and are usually atypical. Because of this I charge hourly so that I know I am getting paid appropriately.
The major downside of the hourly pricing for the client is that they don't have a set amount they know they will be paying you. The downside for the designer is that you have to be hyperaware of how long you are spending on each and every project and can sometimes feel like you are racing against the clock. Even though you technically could just take your time and do the work at any pace and get paid for it, you also want to build trust so that you continue to get hired for contracted work.
Upfront vs Inquire Within
There is no right or wrong answer with this one. It's all about finding what works best for you. You will constantly hear opposing opinions on this one so let me share my reasoning.
I personally prefer upfront pricing! I have tried both and this one is the most successful for me for a handful of reason. For starters, I feel like I charge a very fair price for the quality of services I provide. For this reason I am comfortable and confident putting my prices out there on front street.
Also, when a potential client visits my website I want them to be able to find all of the answers they are looking for before they ever decide to hire me. This is a personal decision as a business. I am not interested in wasting anyones time. If they see my prices and don't feel like they are fair, then they were not my ideal client.
Another reason I do this is because I am a busy person. I have many responsibilities as a small business owner and I don't have time to be emailing people who aren't genuinely interested in working with me. Time is money people! When I used to have people inquire within I was getting tons of emails, inquiries and leads but so many of them would go cold. Honestly, I felt like most people who were inquiring either weren't expecting the price I gave (again, not my ideal client) or they were other designers trying to scope out what their competition was charging. All of this was fine but I am the type of person that gets very excited when I get an inquiry and having so many fall through just felt like continuous disappointment.
Ever since I started sharing my prices I have received so much positive feedback from clients and from other designers who appreciate that I am upfront. It's just better business in my opinion. It's like when you go to a restaurant and they don't have the prices listed out on their menu. Nobody wants that lol. Even if you are filthy rich you only stay that way by not throwing your money away for no reason.
Apart, from the positive feedback I can also count on one hand the amount of times someone has inquired and didn't end up hiring me since I have started sharing my prices upfront. This is huge! This let's me know I can take every single inquiry I receive seriously.
Okay, so I know I sounded like I was pretty firmly against this, and for my business, I am. However, for some businesses this is the preferred method. There are a few pros about the inquire within method.
For one, you will absolutely receive more inquires. People are curious by nature so if you don't have your prices listed out, but they are interested in the work you are showing, then they will want to know what you charge.
Which brings me to my next point. If you are good at roping people in and "making the sale" then this method isn't a bad idea. The on-boarding process can take a bit more work when you aren't upfront with your pricing but if you have the time to do it you may see great results. This doesn't mean you have to be slimy or a used car salesman about it. It may just mean you are confident in your ability, and your pricing, and therefore you don't see selling yourself as a negative thing.
Another positive about not sharing your prices upfront is that you can adjust your pricing with the ebs and flows of business if you so choose. During peak and slow times you can price accordingly so that you are still making sales and landing clients.
upfront pricing = less inquiries but the inquires you receive are serious potential clients
inquire within = more inquiries and more work on-boarding clients and "selling"
Get Paid First
Another point that I can't leave out when we are talking about pricing is, getting paid! What value is their is carefully formulating your pricing if you aren't actually making that money. You can do this a couple ways.
Some people are booked out for months at a time and therefore have a scheduling fee. This will reserve that persons spot on their schedule and this non refundable fee will usually keep your client on the hook. To give you some perspective my scheduling fee is $200 regardless of what package they chose from my services. This, of course, should go towards the overall cost of your package or hourly pricing.
If you aren't someone who is booked out many months at a time then a scheduling fee would be a waste of time and therefore you should probably just charge a percentage of your services up front. I personally charge 50% at the start of the project and 50% at the end of the project. If you work hourly you can charge and upfront percentage based on the estimate you have given the client.
Confidence Is Key
The last point I want to make is that confidence is key. I touched on this in my post about finding clients. It's more important that you know what you charge than how much you charge. You need to be able to speak about what you offer and what you charge with confidence.
Not saying all potential clients are like this, but believe me they are out there. Can you blame them? If your voice keeps cracking and you are all over the place when describing your process, then not only do you sound like you lack confidence, but the client will lose confidence in you too. In turn, they will want to spend less money hiring you. So know what you charge and why you charge it. Understand your value and the time it takes you to complete various tasks.
At the end of the day there will always be those that think you charge too much and there will always be those who think you charge too little. It's you who has to feel satisfied with the price you are charging and the value you are giving. Yes, you have bills to pay and mouths to feed, but you also want to be able to sleep at night knowing you didn't rob someone of their hard earned money.
Hopefully my perspective on pricing has helped you in some way. If any of this resonated with you I would love to hear from you so drop me a message in the comments below :)