Comments on: The Subtle Effects of Pricing on the Mentality of Clients

By: 12 Realities of Pricing Design Services | Vandelay Website Design

12 Realities of Pricing Design Services | Vandelay Website Design — Thu, 03 Jul 2008 00:57:00 +0000

[…] For more on this subject see my post at Freelance Switch, The Subtle Effects of Pricing on the Mentality of Clients. […]

By: March’s Best Links | Vandelay Website Design

March’s Best Links | Vandelay Website Design — Sat, 29 Mar 2008 14:37:27 +0000

[…] The Subtle Effects of Pricing on the Mentality of Clients - from Freelance Switch. […]

By: Ilise Benun

Ilise Benun — Thu, 27 Mar 2008 21:16:29 +0000

Steven, excellent article. I agree that perception of quality and price go hand in hand, and I think many clients and prospects would agree. My business partner, who ran Top Design in LA for a long time, often used what he calls, “The Magic Three.” When trying to get an idea of a client’s budget, he says, “Tell me where you fall on this spectrum. Is it as low as five thousand? Is it as much as fifteen? Or up to fifty?” (Actual numbers may vary.)

Often times, they choose the highest, or middle number but not usually the lowest. I believe that’s because cheap prices indicate low quality, and smart clients value quality. For that reason alone, they usually won’t choose your lowest number.

At the risk of promoting myself, this is addressed in depth in my brand new book (co-authored with Peleg Top) that literally just hit Amazon today. It’s called, “The Designer’s Guide to Marketing & Pricing: How to Win Clients and What to Charge Them.” It is specific to the trials and tribulations of designers and deals a lot with pricing issues.

By: Tim

Tim — Wed, 26 Mar 2008 17:43:21 +0000

@ChefJoAnna, Good point. Though, I would say that the going rate for any product or service can only go so low. If rates get too low in the graphic design business, graphic designers will just start getting new careers because there will not be enough money in the graphic design industry to survive. If that happens, the number of graphic designers will go down. Supply and demand says that the graphic designers that are left will be in higher demand, and can start charging more, which means rates will come back up.

Also, there will always be wise rich people who are willing to pay top dollar for top quality no matter what the going rate is. Just as there will always be cheap people who always want to pay less and aren’t concerned with quality. And of course, there is a whole range in between.

By: Skellie

Skellie — Wed, 26 Mar 2008 01:51:21 +0000

@ Bejamshi: If you’ve already gone this far with them it’s going to be a big hassle for them to find another freelancer. Have they stated outright that they can’t afford it, or have they simply said it seems expensive to them? If the latter, it sounds to me like they’re probably willing to pay it, but are trying to see if they can get a bargain first. I’d suggest reading the 25% challenge article earlier in the series for some more information on sensing when a client is bluffing.

@ Everyone: The series kind of happened by accident as a whole bunch of our writers submitted articles to do with rates at the same time. I’m really glad it did :). It’s something I’d definitely like to do more of in future.

By: Nemesis Design

Nemesis Design — Tue, 25 Mar 2008 16:51:39 +0000

“The thought of pricing services low to secure more work can have serious consequences.”

I am 21 years old, and i learnt this at my own damage.

Couldn’t you write this article some months ago??? LOL

By: bejamshi

bejamshi — Mon, 24 Mar 2008 20:19:53 +0000

What do you do in a case of a client that you have worked with on a project based on project scope and now will move to an hourly revision or updated fee and they ask for that they have no pbms in paying for additional service but they find the hourly fee a bit too steep. I would be grateful if you could adjust to market.

How to deal with that?

By: ChefJoAnna

ChefJoAnna — Mon, 24 Mar 2008 18:22:06 +0000

The other thing that wasn’t mentioned, in the article or the comments, is how you can “shoot yourself in the foot” when you go too far below market rates.

Let’s say the going rate for a week’s worth of dinners made by a Chef A is $400.
If Chef B comes along and wants to charge $300, they’ll take away some of that work, but they’ve also re-established the going rate as $300. (clients approached by Chef A will think, “My friend/coworker/brother has a personal chef, but they only charge $300. I’ll try to find someone who charges $300″) When Chef B wants to make more money, she will have a hard time raising her rates, because the new going rate is $300. Just another point to consider.

By: Tim

Tim — Mon, 24 Mar 2008 18:18:17 +0000

Good articles. Another way that your prices affect your own mindset is, if you charge higher, you KNOW you better make the client happy or he’ll wonder “why on earth did I pay you so much?!” and be very disappointed. Not only that, but, if you are charging higher AND are charging per project instead of per hour, you have more time to spend on the project, because you’ll still be making decent money.

And on the other hand, if you charge low, you might tend to think “he’s not paying me very much, I’m not going to put that much time and effort into this.” Or worse “I can’t afford to spend much time on this project. I need to get more projects done so I can pay my mortgage this month.”

By: Alex

Alex — Mon, 24 Mar 2008 16:58:25 +0000

@ Steve, I totally agree. Great article my friend!