Value in Pricing

August 03, 2009 Filed Under: Taking Care of Business 0 Comments

I look at the growth of the Charlotte AIGA membership in just the short period of time that I have lived here and can easily say I am extremely proud to be a part of such a strong, creative community. As the local creative network continues to expand and our industry perpetually evolves, we must keep fostering creativity, value, and professionalism together.

I’m writing this first installment of our new Taking Care of Business column to spark conversation. I encourage you to comment in hopes of contributing to an innovative, prosperous, respected future for the creative industry.

As I continue to read blog posts, social networking conversations and industry related articles, I find that within the creative field, there is a huge range in the value of our work and an even larger gap in value between our profession and our consumers. This is very confusing for most freelancers and design business owners. After my time in the industry, I can say that I have a clear understanding of what our talents are worth and I am still experimenting with how to present this intangible product in a way that our clients value our work as much as we do in this ever-evolving profession.

What works for one may not work for another. I have seen a number of different pricing strategies used by studios. None of these are wrong or right. It’s about what is right for you and your customers.

The Per Project Studio


These studios clearly outline every detail of the project from research and conception to final artwork and production. Much of their proposal is an education to the client on the creative process and outlines how much work is entailed within each project. There is one price paid for the entire project regardless of the number of hours worked. What now? This structure breeds a designer constantly needing to hunt new business; always on the lookout for the next project without a steady revenue stream.

The Scheduled Retainer Studio


These studios get work done based on the number of hours worked over a defined period of time and is priced per increment of time. Clients of a retainer structure quickly realize the convenience of having a creative studio at their beck and call. This creates a working environment where keeping time becomes the main administrative task involved, requiring daily monitoring to make sure that all of the client’s requests are getting completed within the amount of time they are contracted to pay for. For what? Secured scheduled payments for the studio and guaranteed work from the client are enough of an incentive for many studios to work on retainer only.

The Package Studio


More and more I have seen design studios offering business packages that may include a collection of “customized” projects for a declared package rate. The elements per package vary with the price, but with each client being so different, can they really predict how much time those projects included in the package will take? A brochure to one person is a very different animal to another. This strategy also locks the designer into a price before they even assess the needs of the client.

The “Drive-Thru” Studio


These dreaded bargain basement “designers” devalue our industry’s talents and breed lowest price creative services shopping. These studios provide canned solutions for ridiculously low prices. Clearly their solutions are not as “customized” as they proclaim, but do our consumers know the difference? The ones that have made the mistake will tell you, you get what you pay for. And then you will pay to get it right.

The “Name Your Price” Studio


Come on down! These are the studios that have adopted the practice of allowing their clients to pay them what they think they should... after their clients have seen the final creative solution for the project. They take great care to choose clients they trust value their services. If they don’t value your services would you want to work with them anyways? Every client has budgets. I wonder if budgets dictate the creative value for that project; no matter how hard a creative team has worked to get there.

The range in value of our skills by our consumers mimics the gap in value from designer to designer. The people that understand the difference between quality creative and crap are few and far between on both sides of the fence. And in a market that idolizes the lowest price, it is more important than ever that we stay strong and continue to value our work. How have you closed that gap to help create a consumer base (and industry) that values our creative talent?

Truly I cannot finish without recommending that even if you are a creative that does not price your own work, you get these two references and use them.

The Graphic Artists Guild Handbook: Pricing & Ethical Guidelines
The AIGA Position on Spec Work

Have a great Quarter!

Amanda Altman

Amanda Altman is the principal and owner of A3 Design, LLC, a Charlotte AIGA Advisory Board Member and dog lover. She has volunteered to share her thoughts on the business of design with us once a quarter.

Written by: Amanda Altman