Over the last six months I have gradually transitioned my company from general graphic design services, into a more specialised logo design offering.
The theory is that by specialising, my services are easier to market and I can build a name for myself as the go-to-guy for branding, rather than being a Jack-of-all-trades designer. If I market myself as an expert in my field, then referrals should flow as my audience slowly comes to know me as a specialist.
This has also led me to start billing on a project basis, rather than by an hourly rate. Following the advice from The Futur, I’m now realising that billing hourly puts a cap on any potential income (there are only so many hours in the day, right?). Also, clients prefer to know upfront what the price will be.
But where in the sales funnel should you first present your prices?
Traditionally, I would wait for a lead to come in, usually from my website or my instagram page, and after feeling out what the client requirements were I would send over a quote. This is typically in the second email or at the end of the first call. It gives me time to research the company/individual to try and tailor the quote. A customer starting a small side-hustle won’t have the budget of a multi-national who is launching a new product, for example. This also allows me to decide how much time I should commit to a proposal. Would a quick email suffice over a presentation deck?
But after working so hard on my pricing structure, and creating a ‘floor’ for my startup (basic) logo package, I am finding that around 70% of leads are working to a budget that isn’t anywhere close to this. And had I just mentioned my fees upfront, it would have saved us all a couple of days.
There seem to be a number of schools of thought on this.
Budget filter.
The obvious advantage (for me at least) is that by being upfront with my costs it filters clients that don’t have the budget. I’m proud of my pricing structure, and I have more than a decade of experience, which I believe entitles me to set the bar reasonably high. If I’m transparent with my costs then this should educate potential clients on how these jobs are priced, and stop chancers from asking me to design their logo for ‘exposure’.
Speed.
Also, I’m fairly certain that people are visiting my website for two reasons; to check out my work and to find out how much I charge. If they have to email me to find out my prices and then wait for a response, the whole process is delayed. It’s bad user experience. Being upfront saves everyone time. Time that could be invested in other projects.
Entry point for negotiation.
The beauty of listing my prices publicly is that the first number is down on the table early. Everybody likes to haggle, but nobody wants to be the one to start. Too low, and the other party might snap at that price (and might have paid more). Too high and you scare them away. For me, my pricing structure is tried and tested. I know I can charge what I do because people have paid it in the past. But in order to win a job (for a client who doesn’t quite have the budget) I can pull deliverables from an itemised list on a package to get it over the line. As long as my website copy is clear that a package price can be trimmed by removing some deliverables, or increasing the deadline.
Competition.
One thing that worries me is that another designer, knowing my prices, could undercut me on a job. Or a client could use my prices to try and negotiate another designer down (no good for anyone). However, perhaps any customer with a bargain hunt mentality when it comes to creating the face of their business isn’t for me anyway.
Missing out on jobs.
I recently completed a branding job for a TV personality. They weren’t working with a huge budget, but I did the job because the opportunities and connections this job could present me were brilliant. Not to mention the exposure. Had I listed my prices on my site, there’s a chance they’d never have even contacted me.
This goes both ways. Larger clients might pass me by for being too cheap. Decisions, decisions.
Solution. A compromise.
Here’s what I did.
Firstly, I itemised all the services in my arsenal. I then set up a three-tiered pricing structure and named the packages (the Startup, Professional and Deluxe). I then listed the price of the cheapest option. The other two, more advanced, packages are priced individually (and by client) and these aren’t included on my website. The line reads ‘Enquire for price’.
This solves a few problems for me. It creates a hard ‘floor’ to weed out clients without the minimum budget required, which will save everyone time. But it doesn’t limit what I can charge upwards of this for my more advanced projects. I’ve also made it clear in the copy that the lowest package can be trimmed further by removing items from the list. Hopefully, this should encourage customers that have a budget close to my number to still reach out.
Check it out, and the price for the Startup package if you’re interested, at barnard.co/prices. I’ll let you know if it works, or if my inbox dries up completely!
And if you have a service business, let me know how you’ve approached this. I’d love to hear from any experienced contractors who’ve gone through something similar and how it worked out for you.