Pricing Like You’re Worth It

Pricing Like You’re Worth It

Want more pricing help? This is day one of our five part series on pricing clients. You can find the rest of the articles on the Pricing Bootcamp splash page

Hello freelancer and/or small business owner! Let’s talk about your pricing strategy for a moment. Are you priced to be an economical grab bag? Or a full service web design commodity? Today is a great day to re-strategize in the opening post of our week long Pricing Bootcamp.

Two Stories on Pricing

I’d like to start out by sharing two stories from around the internet that help give a great perspective on the true value of service based work.

The Hammer

As we’ll discuss later this week, it’s not just about the time spent on a project. Sometimes it’s about the value of the service rendered.

The manager of a manufacturing plant who, unable to solve a mechanical breakdown, sent for the retired engineer who had installed the machinery. Following a brief inspection, the engineer took a hammer and hit a pipe which did the trick. The next day the engineer submitted a bill for $1,000 to a horrified manager. Above the protests at the charge for a solitary hammer-blow the retired engineer explained, “Only $1.00 of it is for hitting the pipe. The other $999 is for knowing where to hit it.”

It's the expertise that's valuable

Picasso in the Park

Another popular pricing story floating around the internet involves the artist Pablo Picasso. (The version below was found via an article on 1099)

Legend has it that Pablo Picasso was sketching in the park when a bold woman approached him.

“It’s you — Picasso, the great artist! Oh, you must sketch my portrait! I insist.”

So Picasso agreed to sketch her. After studying her for a moment, he used a single pencil stroke to create her portrait. He handed the women his work of art.

“It’s perfect!” she gushed. “You managed to capture my essence with one stroke, in one moment. Thank you! How much do I owe you?”

“Five thousand dollars,” the artist replied.

“B-b-but, what?” the woman sputtered. “How could you want so much money for this picture? It only took you a second to draw it!”

To which Picasso responded, “Madame, it took me my entire life.”

A service with a higher price tag doesn’t automatically mean it’s a scam. Expensive without justification might fall into this category, but pricing based on expertise and experience is another story entirely.

“Why is a Website Worth My Money?”

Have an answer? You should. In order to price anything effectively, you have to understand what exactly the value is. As a tech savvy web type, it’s sometimes easy to forget that not everyone automatically understands why a website could be worth more than pocket change. Educate them! You’ll be fine as long as you can explain (with confidence) why the service is worth it.

If a client believes that a result is worth the investment, they will often be less hesitant to spend money on it. If a client proposal does fails, it should not be due to a lack of understanding about funding required.

The Internet Has Real Value

A website is a digital real estate plot with a potential audience of millions. For most clients, the web will be a way of extending their business — a self-promoting salesman. This is an important thing to keep in mind when figuring out your pricing.

Put the Media into Perspective

Think of the other ways that a client might reach new customers. How much would they expect to pay for a magazine spot? A TV ad? A billboard on a highway? If you’re charging less for a website than it costs to run a newspaper ad for a week, it may be time to re-evaluate your strategy.

Newspapers aren't cheap either!

You’ll Never Grow on Pocket Change

Start considering yourself a commodity. The problem with always striving to be economical is that you’ll have a much harder time growing as a business. If in saving the client money you’re also putting your own business at a standstill, don’t do it!  Taking those small pocket change jobs without protest is no way to treat your future enterprise!

Price services aggressively, and you may end up surprising yourself with the outcome. As you’ve probably heard many times before, it’s far easier to negotiate a price down than up. Stop worrying about scaring the client away and start giving quotes that are a reasonable reflection of your work.

Don’t get discouraged and second guess yourself when you encounter a competitor with lower rates. There will always be people charging less than you, but there will also always be those charging more. Keep that in mind the next time a client brings up the lower price of a competitor.

Don’t Be a Diva

Potential clients will not respond well to an elitist mentality, especially if they don’t fully understand the process involved. You are a professional looking to offer them great service at a price tag that reflects it. Pricing Bootcamp is not meant to over-inflate your ego or suggest you charge astronomical numbers because your service is so “high end”.

Knowing what you’re worth comes with a fair amount of practice. It’s a constantly changing figure affected by a number of factors. I don’t pretend to have it all figured out, but I do have overall philosophies have worked well so far.

If you’ve been in the trenches for a time yourself, I invite you to share your insight and experience throughout this week’s posts. We’d love to include your expertise.

We’ll see you back here tomorrow for the continuation of Pricing Bootcamp when we discuss client communication and budgets.

Further Reading

Selected articles from around the internet.

  1. The Subtle Effects of Pricing on the Mentality of Clients
  2. 3 Reasons Your Rates Are Still Low (And How To Start Raising Them)
  3. Pricing & Work: Are You a Commodity?
  4. How to Handle Tightwads & Charge What You’re Worth

Want more pricing help? This is day one of our five part series on pricing clients. You can find the rest of the articles on the Pricing Bootcamp splash page

Posted Monday, June 15th, 2009 · Back to Top


Add Comment

12 Comments 10 Mentions

  1. Montana Flynn Author Editor

    Great post, I am in the process of getting my contract’s done and am going to charge $40 an hour on-site and $25 off-site. I build websites using xhtml/css/JS/php and do SEO, are my rates low, high, or acceptable in your opinion?

    P.S. I turned my contract into an online generator for any web designer/developer is free to use it for their own projects:
    .-= Montana Flynn´s last blog ..Twitter Weekly Updates for 2009-06-12 =-.


  2. Zach Dunn Author Editor


    Your rates are your business, but I’d say that you’re closer to be acceptable particularly with the on-site pricing. If you have consistent 30+ hour work weeks at this rate though, I’d say you’re doing quite well.

    Also, I think you’ll enjoy Wednesday’s Pricing Bootcamp article. It will be a discussion on hourly rates versus project pricing. Some food for thought before you go changing things around too much.

    Also I may just be inexperienced in this sort of arrangement, but is there a particular reason that you’ve elected to have such a large difference between the on-site and off-site rates?


  3. Raymond Selda Author Editor

    Awesome post and I love the stories! Now I know what stories to tell my potential clients. hahaha. Pricing projects or even products has always been tough for me. Most of the time I tend to sacrifice my skills in favor of the clients. Looking forward to your pricing bootcamp series.

    Thanks Zach!
    .-= Raymond Selda´s last blog ..jQuery Looped Slider Tutorial =-.


  4. Hezi Author Editor

    Zach – this post simply rocks!


  5. Scott Radcliff Author Editor

    This post came at a perfect time for me. I am in the middle of adjusting my prices, and I am cautious of chasing potential clients off. That being said, I am quite knowledgeable about my field (web development), and that knowledge should come at a premium price.


  6. Dalesh Kowlesar Author Editor

    I completely agree. People need to realize that web development is an investment. Those people that charge next to nothing for terrible design and that don’t know much about the internet and web development just kill the market.


  7. Jeremy Tuber Author Editor

    Great post Zach, you hit it right on the head with, “There will always be people charging less than you, but there will also always be those charging more.”

    Exactly right.

    Here’s what I’ve always found, if designers are able to articulate that working with them will help the client bring in customers/money, they can command a much higher rate – especially if they can prove it with case studies. If designers are just trying to sell, “good design”, it makes it much tougher.

    Nice post my friend.

    .-= Jeremy Tuber´s last blog ..Top 7 Things a Creative Freelancer Should Never Say to a Client =-.


  8. BH Media Marty Author Editor

    Love the article, can’t wait to read the rest, and agree with everything other people have said. I recently completed a project where one of the things the “at the time potential” customer said was “so and so does this for £xxx” cheaper than you, to which I replied “I can list 100’s of companies that will charge less and 100’s that will charge more, I just stand by the quality of my work” and in the end I got the job, but quite often I’ve wondered how to quote for some work, another perfect example, some posters which required hours of design work and photo manipulation, but they only wanted 6 posters…. how do you quote for that without giving the client a heart attack? lol


  9. David Author Editor

    I hope people don’t get too excited by the Picasso story – the fact is that most of us aren’t that exceptional. Design is a teachable skill, its value is probably comparable to something like engineering.

    Take writing in a foreign language for example. You’ll have people who can speak the language, people who are trained for translation, and people with the gift for it. Then you’ll have a Nobel prize winning author – charge accordingly.


  10. Joyce Author Editor

    excellent post… applicable to more than just the webdesign industry. :)


  11. laterooms london Author Editor

    You made some good points there. I did a hunt on the point and discovered most people will consent through your blog.


  12. phan mem quan ly Author Editor

    Thanks for posting this, Zach Dunn



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