Pricing your creative work is not easy. It’s one of the hardest decisions you need to make for your business. If your price is too low; you are leaving much-needed money on the table. If your price is too high, you could lose an opportunity. The fact is one client may be willing to pay twice as much without blinking as the similar client who struggles paying half your rate. You can’t please everyone — stop trying.
Below are seven things to consider when developing your pricing strategy.
Don’t race to the bottom. Unless you plan on duplicating yourself, you can’t play the lowest price game. This is one of the fastest ways to drive yourself out of business. The lowest price game is for mass markets. Chances are you are not the Wal-Mart of your industry and it’s best not to try. Focus on strategies to increase your reputation and value so you can raise your prices.
The client wants a lower price. The best way to handle a price conscious client who demands a lower rate is to take out services as the price decreases. Some of the things you normally do for a client can be removed. Also consider, the prospects who don’t want to pay you what you are worth don’t see the value in what you do. They tend to not be very loyal and if they actually do refer you — it will be to someone looking for a cheap solution.
How to a deal with free or charity work. There is nothing wrong with helping out a friend or charity using your skill and talent. One mistake business people make is that they fail to present their full value to the organization. Always submit an invoice with the discount you offered. For example, a photographer might photograph a charity event for free. Submit an invoice for the full value of your work and then show the 100% discount. This lets the charity know they you are a high value creative working for free for their cause, not a free low value photographer.
Price list. Keep a price list on your desktop, Google docs or the app evernote. List all the types of work you do and how much you charge so you don’t reinvent the wheel each time someone calls you for a quote. This is helpful for the opportunities that only come around once in a while. It helps to prevent you from guessing and playing safe by underbidding. Keep notes on how people react to different prices and how you over come objections.
Don’t work hourly. The goal of business is to make as much money as possible for your valuable work. Working hourly limits your earning potential. Especially if you are efficient at what you do. There are cases when hourly rates do work, such as events, because working more efficiently will not help your cause. You’re still stuck there until the end time. In most cases developing per item (image) or project pricing is the best path to pricing success.
Expenses and receipts. Your price is your price and you don’t need to justify it. There is no reason you need to provide detailed information about the hours you worked, what you paid for support materials and services. Your rate is about the value of the finished product or service you create. Keep that door closed, it’s none of your client’s business.
High rates offer a high value perception. If you were hiring a professional creative and your reputation depends on getting the job done right for a big client — would you hire the cheapest option available? No, because if things didn’t work out you can say you hired the best you could find. Your rate is part of your branding story. The cheap professionals are generally not invited to the high-profile opportunities.
Pricing is an art and science. Going into any creative business with the concept that you are going to offer the best quality service at the lowest price is a losing combination. Great service, innovation and quality all require time, creativity, effort. All things that add value and allow you to increase your price. As I always recommend; test your ideas on a small-scale first and then take your winners into the larger marketplace.