Today I want to look talk a little bit about the irony of pricing higher than feels comfortable for you.
Firstly, if you feel you're undercharging, you're in company. Industry-wide, designers are often hung up on charging for time because of the decades they've spent filling in timesheets.
But when you switch from employee to running your own agency, charging based on the value you bring to a client is the only way you're going to be able to scale your revenue.
The reality is, even if you keep putting up your hourly rate, there's a cap on the extent to which you can exchange your time for your money.
The main irony of pricing is that higher is often more convincing than lower. I often see people erode their own value, thinking that cheaper pricing is the way to win over a client. The reality is that cheaper pricing can make a client suspicious of why you are so low compared to your competitive set.
Another common mistake I see is an agency nominating a fee for a piece of work before getting the client's budget's real value. When you're on a new business call, restrain yourself from offering a fee until you're further into the conversation so that trust and chemistry fit is established before you talk money.
There are two reasons for this: Firstly, this might not be the right client for you. I understand that sometimes it can feel desperate- you need to keep lights switched on - and you'll be tempted to take any work onboard. In reality, the clients that you have a gut instinct to avoid end up being a complete nightmare to work with. So it's essential, you have a process for self-selecting these out.
The other reason to stall on offering a fee is that from the client's perspective, the more they converse with you and feel confident that you understand their problem, the more willing they are to say yes when you do nominate a fee.
But that doesn't mean you should entertain all new business conversations: you really need to weed out the inappropriately low budget clients and direct them onto another resource before you spend any more time on them. That's not to be snobbish, but they may be that they're better suited to a freelancer or an earlier stage agency where both sides feel appreciated and valued. This is why it's handy to have a couple of people 'in your pocket' that you can refer low budget work onto. You may find that they are so grateful that when they get approached with a project that's out of scale or otherwise ill-suited to them, they return the favour and push it back to you.
If you can't stop eroding your value while you're on the telephone (and a lot of people really struggle with this, they keep lowering the fee until somebody says yes), you need to put a sign on your desktop that states 'our policy is not to work with clients with a budget less than £X'.
There is precedence here: clients frequently reference their policies to get us to adapt our way of working to suit their organisation, so it really is time you put this into use as well. It's surprising how blaming it on somebody else or an inanimate object like the organisation makes it much easier to justify things. You'll find it's acceptable to the prospective client to hear this, most of the time.
Another thing to think about when you're considering pricing is to focus on being a brand guardian: you need to consider whether a payment plan or retainer would better create the kind of relationship with a client that is more likely to result in the creative work you're proud of, in addition to revenue security over the longer term.
This is often of great appeal to post-seed-stage startups who appreciate the transparency of ongoing costs and recognise that they have ongoing creative requirements. They also need a safe pair of hands to execute work at short notice.
But this also appeals to much bigger clients who need transparency of ongoing costs for procurement and budget optimisation reasons and appreciate the lack of admin that comes with not having to change suppliers regularly.
If you are aware that you're charging less than you should be, book a call with me, and we can figure out some solutions that will work for your business to get you through your money blocks.
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