6 steps to charging what you’re really worth

Most designers struggle with putting a price on their services. Many end up using a pricing model that leaves them run ragged trying to pay the bills, rather than one that lets them build a healthy, sustainable business.

If you’re quoting clients an hourly rate for your services, chances are you’re hurting your business…even if that hourly rate was methodically calculated.

That’s because you can really only charge so much per hour and there are only so many hours in a week, putting a limit on how much you can earn. Problem is, that limit usually has nothing to do with how valuable your services are.

There’s a better way to approach your pricing and build your business. Here’s how:

 

1. Focus on value, not hours

The first step is understanding the difference between churning out billable hours and delivering value to clients. As a designer, you’re not just a collection of hours; you bring an array of creativity, wisdom, talent, and skills that you’ve accumulated over the years. You bring far more value to a client than just punching in and punching out on the clock.

 

2. Probe for serious pain points

During the exploratory phase, probe your client on their current problems or pain points. Too many designers focus on small problems, but clients aren’t motivated to solve those, so dig for the serious issues.

Are sales trending downward? Are new competitors emerging? If the client has goals or revenue targets, those create problems too, because if they aren’t met, the client will experience a loss.

Bottomline: clients value solving large problems and they’ll pay for that value. If you don’t identify where your client really needs help, you risk developing something that won’t have a lot of impact and consequently won’t be worth much to the client.

 

3. Position your services as an investment, not an expense

No one likes expenses, so they try to keep them as low as possible. That’s why so many contractors experience downward pressure on their prices. But an investment is a different story altogether.

To position your service as an investment, connect it to solving the client’s pain or helping them achieve a key objective. For example, as a web designer, instead of building a better looking website, design a site that acts as a marketing and selling engine to help your client hit revenue targets. If you offer to build a site that could generate an additional $100,000 of profit annually, your client would be open to making a $20,000 investment. If you used the traditional hourly pricing model to figure out your fee, you might only end up charging $2,000 to $2,500.

 

4. Don’t present your pricing upfront

Most initial conversations begin with a client asking about rates and a freelancer obliging with a response, without either side fully grasping the impact or scope of the project. When you present your pricing upfront, you make price the distinguishing factor, not your ability to deliver results. This encourages the client to compare your rate to someone else’s (and having the most competitive rate doesn’t always work in your favor).

If you want to be judged on your abilities, resist the temptation to give a quote before you and your client agree on what they want to achieve.

 

5. Offer clients more than one option

If you offer just one package or price, the client has two options: accept it or not. Instead, offer a proposal that reads like a menu, with multiple options that have distinct prices. Each choice should address business needs and goals, with solutions at various depths and price tags. Many freelancers are surprised by how frequently clients choose their topline package. In addition, should a client want to pay less, there’s no haggling. They just choose to have less delivered.

 

6. Focus on ‘good’ clients

A big client isn’t necessarily the same as a ‘good’ client. Clients that hammer you on price are unlikely to ever grasp the merits of your value, and all they do is lead to more low-quality clients. When you start working with clients who want to invest in themselves, they’ll refer you to other high quality clients — which will help you move upmarket.

Do you charge by the hour? How do you maximize your income? Let us know in the comments.

Featured image/thumbnail, potential image via Shutterstock.

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  • web design in hyderabad

    This is what i’m looking for, I’m a freelance consultant and I going down with my profession, as I’m unable to show my professionalism…! Thank you sharing. This can help be to get better…

  • richpalmerdesign

    In my experience a lot of clients want to know a flat rate price ‘How much will this website cost?’ rather than what my hourly rate is. I do when appropriate ask a client if they have a budget, then I can let them know what is possible or decline if they are time wasters.

    Clients under value good design so I think point 6 is really important, focus on good clients that understand the value of what you do.

    • Lyman

      A tactic I use is to qualify my leads so by the time I get them on the phone I already know certain information. Then once on the phone we develop a strategy and I ask them if they want help implementing it. It’s either a yes or a no. Saves time only focusing on vetted leads.

  • shawn

    Most clients will never “understand the value of what designers do”…and rightly so. They don’t have time. Like everyone else in the real working world, they understand and are concerned about the value of what THEY do and how it impacts THEIR clients. Designers need to stop worrying and whining about why clients never understand how creative, talented and wise they are…and instead focus on getting the job done in a timely manner that turns a FAIR AND HONEST profit for the amount of work they put into it. Period.

    Quit trying to “educate” the client and get on with finding better ones…and worrying about the quality of YOUR work and service.

    • Donald_FreshBooks

      Great insights, Shawn…. vital to put yourself in the shoes of the client and see things from their POV. You’ve done a great job of getting inside the client’s head!

  • abrishca

    2 key take aways from this article for me:

    1. Value
    2. Investment

    You need to communicate these in order to price appropriately for both yourself and the client.

    • Donald_FreshBooks

      I like the simplicity of your takeaways!

  • http://www.blazewebstudio.co.za/ Geoffrey Gordon

    Nice article Donald, we recently increased our prices and have found that we have closed even more work than previously. It is also comforting to note that we do many of these things already. Thanks for the reassurance.

    • Donald_FreshBooks

      That’s great to hear, Geoffrey! It’s amazing how much the perception of value is affected by price — sometimes simply increasing your prices as you have encourages prospects to recognize the value you really offer. Thanks for sharing your experience.

  • http://envecreative.com/ Sarah Espano

    I was doing everything but #5, and I think that might help my prospects (mainly small business owners or individuals) make a better and faster decision. Thanks for the idea!

  • HemanthMalli

    What a timing !! Nice read at right time . Thanks for sharing with us !!

    • Donald_FreshBooks

      Thrilled to hear this! Seems like a timely topic for a lot of freelancers and small business owners.

  • Shane Dwayne Albuquerque

    i usually charge as bulk package for basic website cost is around 1000$ and so on based on work, not on no of hours, and point you made no price upfront is absoultely right common problem i face

  • M Designz

    It seems to me that upfront pricing is what most people want atleast in my area. They want to hold you hostage to the price you quote them & at the same time they expect you to do miracles. One thing that was really hurting me was the fact that I was new to the design world & really didn’t know how to charge people for designs. Then there’s the difficult clients, you know the ones that want 20,000 different changes, but don’t want to pay for them. I’ve had my share of those. I learn to value my self better & price my designs according to my level of skill, creativity & what I bring to the table. Most people that want designs have no idea on what it takes to make GOOD DESIGN so now I charge people accordingly. This points are legit & very helpful….Thanks for sharing!!! God Bless

  • Shawn

    BTW Donald, good article!! I didn’t say that in my original post, but thought you should know. It sparked a lot of conversation, nice job!

  • Modulius

    I always have problems when giving a quote.

    I’ve been asked by a client to create an UI kit. The style and the number of elements will be similar to the ones below:

    http://dribbble.com/shots/1135984-Flat-Design-UI-Components/attachments/145888
    http://dribbble.com/shots/1153384-Flat-UI-Kit/attachments/149235

    If anyone has a clue I’m asking for an opinion about the pricing. How much do you think I should charge them for an UI kit of this scale?

    I was thinking somewhere in the range between $700-$1000. Although some say around $500, I think that’s low.

  • Kerry Butters

    Thanks, it took me a while to recognize the ‘good client/bad client’ issue and that’s great advice. Clients like that drag you down rather than make work a pleasure and should be avoided at all costs!

  • Fig Tree Design Studio

    I run my own business http://www.figtreedesignstudio.com – These points really make sense and relate directly to the type of Website Design and Graphic Design Projects I work on. Thanks for the great ideas!

  • http://www.littlephilz.com/ Phil

    This is a great article, I’ve always been one for charging my clients for the project not hours. Some helpful points here for me to take away.

  • Henry Instadesign Roberts

    Great article, very relevant for me, thanks!

  • http://www.fasttrackcreations.com/blog Nikhil Malhotra

    Very valuable write up.Its important to deliver quality rather than focus on hours.Also quality brings quality so taking on good clients is always a necessity.