For most designers pricing services is not something that is the highlight of the job. Still, it is something that you’ll have to deal with if you’re freelancing or working for a small firm. Here’s my take on pricing web design services.
1. There’s no exact formula.
Unfortunately, there’s no right or wrong way to price your services. Every designer needs to develop his or her own method for pricing, and even then, you probably won’t be able to follow the same formula on every project. Because each job will be different, it’s difficult to develop a method that will work well every time.
2. Both hourly pricing and project-based pricing have pros and cons.
Everyone has different ways of doing things and this is very evident by the information that you will see about how you should base your pricing. Some feel that you shouldn’t charge by the hour. In general, project-based billing is more common than hourly rates, but that is somewhat of a gray area.
3. Pricing is a necessary part of freelancing.
I think most designers would like to focus on the work and forget about things like pricing. Unfortunately, if you’re freelancing it’s a necessary evil. Whether you like it or not you will have to deal with the issue. For many of us it’s something that we’ll never really enjoy, but we need to at least become comfortable with it. Freelancers wear a lot of hats, and pricing is just one of them.
4. Mistakes are a part of the process.
I think everyone has at some point gotten themselves into a position where they wish they could go back and set a different price. In some cases you may be justified to increase the price do to changed circumstances or additions by the client, but this may not always be the case. If you’ve made a mistake in pricing, realize that it’s normal and learn from it. The more you learn from your experience the less of a guessing game it will be.
5. Your prices will affect your own outlook on your services and it will also impact your client’s opinion of your services.
When you see a low-priced designer what’s the first thing you think? He or she must not be very skilled or experienced, right? It’s pretty obvious that your prices will impact the mentality of your potential clients. Some will only be looking for bargain-basement pricing, but others will be measuring you by what you charge, whether they realize it or not.
However, your prices have a bigger reach than just the opinions of your clients – they also impact your view of your own services and abilities. By pricing your services very low you’ll eventually convince yourself that you’re not worth more. On the other hand, pricing your services high (and being able to land clients) will give you the confidence that you can be an elite designer. Of course, your mental approach can only take you so far, but it’s my opinion that this plays a role in your success based on your perception.
6. Uncertainty is Common.
Freelancers who have been designing and pricing services for years may have the whole thing down, but if you’re feeling uncertain about pricing, don’t feel like you’re alone. Most freelancers struggle with pricing, so being uncertain doesn’t mean that you’re inferior. Take the time to educate yourself (some of the links in this post should help) and keep working on developing a better system or model.
7. The variety of prices is as wide as the variety of talent levels.
Just because you see another freelancer pricing services ridiculously high or low, don’t feel like you have to do the same. Anyone can sell web design services. Some are not very talented or experienced, and some have unbelievable abilities and incredible experience. Most are somewhere in the middle.
While clients may argue by comparing your prices to another freelancer, be ready to backup your pricing strategy be explaining why you are worth what you are charging. You can find someone willing to do the job for just about any price if you look hard enough, but in general, you will get what you pay for.
8. Losing a job isn’t always a bad thing.
Newer freelancers are often tempted to price their services at whatever level will get them the job. If the experience and building your portfolio is what’s most important to you at the moment, this might not be a bad idea. Otherwise, if you need to earn enough money to support yourself and your family, losing out on a job because of price may not be a bad thing at all.
We all have a limited amount of time available, and taking a job that doesn’t pay what you need to make isn’t going to be ideal. Hopefully if you pass up on a job because of the price, something else will come along that meets your needs. Taking that low-paying job can hog your time so that you can’t take other opportunities that come along. This is just something that you’ll have to weigh as you go.
9. Pricing can be a good way to weed out the tire kickers.
I think most freelancers get plenty of emails from potential clients who are pretty unlikely to follow through with the project. Typically, these tire kickers are looking for quotes, but they’ll usually have some reason that they don’t want to move forward or they’ll have some hang up on the price.
While it’s understandable that everyone has a price that they can afford and something that they can’t afford, but I’d prefer to identify the tire kickers as soon as possible so I don’t waste too much time answering questions and making no money. One of the downfalls of pricing your services low is that you’ll get more of these types of clients, and they’ll hang around for a while longer. Price your services higher and you’ll find that a higher percentage of your potential clients are serious about working with you.
10. Some potential clients will think your prices are high no matter what you charge.
Some clients will understand what’s involved with designing and developing a website and others will not. Because there are people out there willing to design a website for next to nothing, some clients will think that you should be willing to do the same, even if your service is completely different. Try not to worry about turning clients off, and focus more on proving a service that’s worth the price (and being able to explain why it’s worth the price).
11. Charging more than you quoted may be necessary.
I think we’ve all had those clients that keep adding new things to be done or changing their minds about what they want. When using project-based pricing this can cost you time and money. However, some situations will justify an increase in the price. Of course this needs to be communicated with the client, but it is an option.
Picture this scenario – You take your care to a mechanic and get a quote for repairs. Once they get inside they find that something else is wrong and needs to be fixed for your car to run properly. Are they going to charge more for the additional labor and parts? Yes. Many times the situations you will find yourself in will be similar.
12. Starting out you’ll probably have to charge less than you’d like.
Most freelancers will find that they need to prove themselves before they’re able to land jobs that pay what they would like to make. Building your portfolio and your experience is a natural part of freelancing. Of course, if you’re coming from a design firm where you’ve already established yourself, this may not be the case.
Pros and Cons of Package-Based Pricing for Web Design
In attempt to simplify pricing for both the designer and the client, some designers and agencies use package-based pricing with prices listed on their website. While offering proposals or quotes for each project is more common, package-based pricing is used frequently enought that it warrants consideration from the designer or agency.
In this post we’ll take a detailed look at both the pros and cons of listing your prices publicly. It may be worth noting that Vandelay Design does not use package-based pricing, although this has not always been the case. A few years ago packages were listed on the site before deciding to price projects on a case-by-case basis.
Pros of Package-Based Pricing:
1. Gives Visitors a Clear Picture of What to Expect
Many visitors and potential clients really have no idea what to expect in terms of how much they will need to spend for web design and development services. In some cases this is a result of a lack of experience in dealing with the subject, but another contributing factor is that prices can vary so drastically. If a client is looking simply for a low-cost provider, regardless of the type of project there will always be someone who is willing to take on the work (not necesarilly qualified) for a fraction of what most of the competition would charge. This variance in pricing can make it difficult for clients to know what is included at that price, what quality of work and customer service they will receive, and how this compares to their other options.
Clients like to know what to expect, and package-based pricing can give them the general information before they even contact the designer. If the pricing is out of their budget they can move on to another designer, or they can re-consider what they are willing to spend. Clients can make comparisons much easier with package-based pricing, assuming the details and any potential add-ons are clearly provided.
2. Inquiries Will be “Pre-Qualified”
If your website lists the prices of your packages, chances are those clients who cannot afford your services will not take the time to contact you. In this situation, most of the inquiries you receive from potential clients will be of a higher quality because they know about your prices and they are interested (“higher quality” is used here to mean that leads should convert to sales at a higher rate). Of course, you will still get some emails from people who want to see if there are any lower-priced options available or even from people who did not notice the prices on your site, but in general it can help to reduce the amount of time that you spend responding to people who are never going to pay for your services.
3. Saves Time Compared to Pricing Each Project
Developing a quote or an estimate can be a time consuming process. You can’t make an accurate guess without knowing basic information about the client and the details of what they are looking for in the project. You’ll also have to estimate how long it will take you to do each aspect of the project and any costs that you may incur along the way. All of this data will be used to make the estimate.
Creating proposals or estimates takes up a lot of time that you could be using to do other things, and offering package-based pricing can eliminate a lot of that. Clients can evaluate the packages that you have to offer and they can decide if it’s a good fit for their needs. It’s possible that you can get started with a client without spending much time at all on preliminary things before the work is secured.
4. Allows You to Define Exactly What is Involved and Included
Most designers and companies that list package-based pricing on their websites will include a list of everything that is included with each package. This can be helpful for clarification purposes, from the perspective of both the designer and the client. It’s not uncommon for designers to run into issues with clients where there is some confusion about what is included in the service and what will need to be charged an additional amount. Package-based pricing can help with this situation by clarifying up front. It can protect the designer from scope creep and it also gives the client confidence that they know specifically what they are paying for.
5. Allows Clients to Have Options
When package-based pricing is not available and a client gets a proposal or a quote from a designer, they may feel like it’s a take-it-or-leave-it situation. In most cases the designer could probably reduce or increase the scope and price of the project to suit the client’s needs, but this is not always communicated or undestood. Package-based pricing makes it clear to clients what their options are, and they can easily compare the various packages offered by a designer to determine what meets their needs.
Cons of Package-Based Pricing:
1. Reduced Flexibility for Pricing
The main reason that most designers and agencies do not use package-based pricing is that clients and projects are all unique, and this usually requires some flexibility and customization in the pricing and scope of the project. Package-based pricing attempts to put projects into a specific box. Sometimes this works well, but many times the project will have unique characteristics that make it impractical to use a set pricing strategy.
2. May Reduce Number of Inquiries Due to Sticker Shock
Many clients, particularly if you are dealing with small businesses or non-profit organizations, will have unrealistic expectations regarding what they are expecting to pay for web design and development services. When these people see prices listed on your website they may immediately leave if it seems to high, without even examining the details to see what is included as well as to take a look at the quality of your work.
It’s not uncommon for a potential client to receive a quote that they initially feel is too high, but after looking at the details, speaking with the designer, and checking out some competition, they may decide that it’s actually a pretty fair price. In this scenario the designer has the opportunity to clarify the details of the proposal and to pitch it to the potential client. The client may wind up being happy with a price that they initially would have passed up if they had seen it listed as a package price.
3. It’s Difficult to Create Packages if You Offer a Wide Range of Services
Many designers and agencies offer a wide variety of services. Package-based pricing is really only effective in situations where the majority of projects can fit into certain classifications. If you are offering different combinations of services (such as logo design, web design, business card design, SEO, etc.) to your clients, chances are they will not fit into a specific package. The more types of services you offer, the more packages you would need to provide as options, and this can simpy become too overwhelming for clients when there are more than just a few options.
4. Can Be Intrepreted by Clients as a Cookie-Cutter Approach
Clients like to know that their project is important to you and that they are receiving a service that is customized to meet their needs. Package-based pricing can sometimes lead them to feel like they like they are being forced to take a cookie-cutter approach rather than to have their specific needs addressed within the project.
5. You May Still Wind Up Doing a Lot of Custom Quotes
When I used package-based pricing in the past I still wound up preparing a lot of quotes because things just didn’t always fit with one of the packages. I imagine this is also the case for many others who use package-based pricing. While offering packages can certainly save some time in this area, it will not elminate the need to be able to provide custom estimates.
6. Competitors Know What You are Charging
In my opinion this is not really a big deal, and it’s probaly less significant than the other factors listed here, but it’s still something to consider. Many designers aren’t excited about listing their prices publicly so that all of their competitors can see what they are charging.
There are certainly significant pros and cons for using package-based pricing. The situation where it is most effective is when the projects you are working on are very similar and there is only a difference in terms of scope. For example, PSD to HTML providers typically offer set prices based on factors like the number of pages being coded and the use of a CMS or shopping cart. Add-ons are then available for specific needs and sometimes custom price quotes can be provided depending upon the needs of the client.
In situations where a designer offers a wider selection of services and one project is vastly different from one to the next, package-based pricing will usually not work very well. When packages are used, it’s a good practice to still offer quotes for projects that do not fit within any of the options.
What would you add?
What have you learned from pricing services? Is there anything here that you see differently?