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3 Ways To Approach Pricing For Creative Work

As creative types, many of us are blessed with the unique ability to just… “wing it!”

Eyeliner, buffalo cauliflower, and all kinds of new creative endeavors– we can wing it, and we can do a dang good job at it, too!

If there’s one thing in life we should never wing, though, it’s our businesses.

Maybe you don’t think of yourself as a ‘business' (yet), but we certainly do, and we want you (and your clients!) to think that way, too.

Let’s Get Down To Business

If you don’t have the business know-how to make the most of your skills, you could do your best work 24/7 but still feel like you’re just spinnin’ your wheels. We don’t want that, and you definitely don’t want that!

You gotta have a plan, Stan!*

*Even if your name is not Stan, we still highly recommend having a plan

So before you go wingin’ a pitch, proposal, or a bid, let’s put on our businessperson glasses and do a little bit of learnin’.

The following is just a little amuse bouche for ya; our Business Bootcamp is where you’ll find the whole meal– the whole enchilada– if you will. For now, we’ll get right to the juicy stuff and take a big ol’ bite out of pricing.


Pricing Approach #1: Inputs

Pricing based on “inputs” (what goes into the work) is a pretty basic approach.

We sometimes like to call it “cost plus” because it’s just:

The cost of your hourly/daily rate, materials (if applicable)

Plus!

A little bit more.

And that’s all, folks!

What does that look like?

Sounds pretty great, yeah? Super straightforward and easy to explain to even the most critical of clients. Hey, maybe you could wing this whole thing after all!

But what a minute– what about your rent, utility bills, the cost of your equipment, design elements, software subscriptions, etc. etc. etc.

And hey! Where the heck is the profit?!

Guess it’s time to learn about (drumroll, please!) Pricing Approach #2

(game show voice): Could this be the one to take you from “just wingin’ it” to “straight up soaring”?! Pricing Approach #2, COME ON DOOWWWNN!

Pricing Approach #2: Outputs

This second pricing approach is based on what comes out of the work.

It’s all about the deliverables, baybeee. You and the client agree on the scope of the work, you charge a flat rate fee, and you get paid for those deliverables. Heck yeah!

Rejoice For Rapid Results

This is great news for folks who ~get zippy with it~ and produce incredible work in a short period of time. Cha-ching! Why would you charge by the hour and basically punish yourself for being good at what you do? No thanks.

We personally like to be rewarded for being good at our jobs (preferably with cookies, but gold stars will do too), and that’s exactly what you get with the output-based pricing approach.

But you also get (dun dun DUUUNNN) risk!


Risk It For The Biscuit

When using this approach, you gotta factor the risk into the price. Because the risk, my friend, is all yours. The client gets that sweet, sweet price guarantee, and you get to deal with whatever disaster might crop up.

So now your price includes cost, overhead, and a profit with a pretty comfy cushion on it in case of a “dog ate my design work” situation. Because you include all of this, your flat rate is going to look quite different from the hourly rate on paper.

Breakin’ It Down

Remember that lovely little simple breakdown of the hourly work? The pricing model that was so easy for your client to wrap their head around? Wave bye-bye.

But, why-why?

Revealing too much of the “input” when pricing “output” leaves room for disagreements and questions about why a specific task takes so much time, why your materials cost what they cost, why you’re using so much material, etc.

We don’t know about you, but we certainly don’t want to justify our excessive use of colorful sticky notes to every client. I’M AN ARTIST, MOM! I’M DOING ART, MOM!

So what should you break down for your client?

You’ll give the client a summary of the end goals you’ve agreed on and a statement of work that has a single price on it – the total.

We get into the nitty-gritty of this in our Business Bootcamp, but the big important stuff– maybe the biggest, most important…est stuff is right here:

Put It In Writing

While we advocate for a bit of a ~vague vibe~ in your proposal, this absolutely does not apply to your contract.

Using the output-based pricing approach will come back to haunt you (and not in a Casper-the-friendly-ghost kind of way) if you don’t have a really clear and specific contract in place.

This is part of that risk we talked about earlier; if there’s any ambiguity about the deliverables, you’ll be the one paying for it. Where there’s gray, you will pay.

How many options will you make?
How many revisions does the client get?
How long will the project stay open?
How much will it cost if they want more revisions or more time?

Make sure that you go over all of this with your client and that it is all in. the. contract.

It may help to develop a company-wide standard for your contracts, so you are totally prepared for each new project.

Pricing Approach #3: Value-Based

Value-based pricing? Isn’t that a little bit redundant?

Well, yeah, we guess, if you think that “price” and “value” are the same thing.

PLOT TWIST: They’re not the same thing at all!

(gasp)

Confused? Don’t be!

It’s As Easy As CPV

Cost - cost does not account for profit– it’s just the basic labor and materials that it takes to make the thing, whatever the thing is. That sounds an awful lot like our first pricing approach, doesn’t it?

Price - price is cost + profit. You’ve paid for the materials, for your time, and all the overhead. What’s left is your profit. That sounds pretty familiar, too, no?

Value - value is determined by the client. How are they going to benefit from these goods or services? And do they care about that benefit? How much?


If you find all these questions fascinating, check out this video where Chris digs into it further, and listen for our fave quote:

“When value exceeds price, people give you money.”

Using this approach to pricing is a little bit more challenging than the first two we talked about. But something tells us you’re up for the challenge!

To price something according to “value,” you have to know what that value is.

Since that’s going to be different for every single client… there are some things that you should know before you swan-dive into this approach.

(Yes, that was another “wing it” joke. No, we’re not sorry.)

Price the Client, Not the Project

One of the most important pieces of the value-based pricing puzzle is this – price the client, not the project.

Say you’re hired to make a new logo for a local tea shop. You know that they’re just starting out, that they only really need the new logo for their socials, maybe a few stickers, and a rubber stamp for their packaging.

You might charge them $7,000 for the logo design.

Then, miracle of miracles! Starbucks reaches out to you. They wanna scrap their current logo and start from scratch with a new one. They plan to put this on their socials, signage, uniforms, cup sleeves, coffee packaging, enamel pins, hats, etc.

You might charge them $100,000 for the logo design. Why? It’s the same amount of work! But we’re not pricing the work. We’re pricing the client.

Logo Logic

That local tea shop’s new logo could be a huge hit and boost their online engagement and their sales quite a bit. But their revenue won’t go up by millions of dollars the way that Starbucks’ might. The value of the new logo is not $100,000.

It might be to Starbucks, but the inverse is also true. If that local tea shop logo doesn’t do so well, they only have a rubber stamp, some stickers, and a social media logo to replace.

Think about aaaallllll the things that carry the Starbucks logo. They’re prepared to invest a lot of money into solid design work because if they go for a cheaper option, it could cost them a lot of money.

Yep. Feel free to quote us on that one. It’s kind of mind-blowing.

Question Everything

Another important tidbit you oughta know about value-based pricing is that it can really help you out if you build it into your client calls.

We’re always saying how you should be asking more questions than you answer, right? Aren’t we always saying that? Don’t we love to ask questions? Hmm?

Asking questions about what the client wants, what specific results they’re hoping for, how those results would impact their business, and what they would be willing to pay to achieve that desired outcome is a great way to:

Price With Confidence!

If you have some real numbers that detail how your work could positively impact their business, the “big scary numbers” you might’ve been too timid to suggest before are suddenly perfectly reasonable numbers.

Real numbers turn big scary numbers into perfectly reasonable numbers.

That’s great for you, but what about your client?

Inspire Confidence In Your Client

Before you even breathed a word of “price” to your client, y’all went on a journey together. You figured out what result they valued most, how they might get there, and whether you were a good match for getting them there.

This is where you pivoted from “salesperson” to “consultant.” You’ve already helped them so much, and together you’ve come up with a number that feels like a “fair” investment for the value they’re expecting.

They don’t feel like they’re being sold to because you didn’t have to sell to them. They feel like you understand their problems because you do.

They feel like you’re a safe bet because—if you made it that far into the journey—you absolutely are.

There are so many reasons why we prefer a value-based pricing approach, but that is not to say that there is never an appropriate time to use the other two approaches– input- and output-based pricing.

Depending on the type of work you’re doing, the client’s needs, and even where you are in your career, you may go with a different option than our fave.

And that’s completely fine! Just as long as you feel ready to face the big bad business world, with a pricing plan in your pocket and without a wing in sight.

If anything we just talked about made you feel all giddy, like “TELL ME MORE!” first of all - that’s a whole mood. Second, deffo check out our Business Bootcamp and our Pro Group to simultaneously pick up some serious smarts and support.

Aug 22

3 Ways To Approach Pricing For Creative Work

As creatives, we are blessed with the unique ability to just… “wing it!” Eyeliner, buffalo cauliflower, and all kinds of new creative endeavors– we can wing it, and we can do a dang good job at it, too! If there’s one thing we should never wing, thou

As creative types, many of us are blessed with the unique ability to just… “wing it!”

Eyeliner, buffalo cauliflower, and all kinds of new creative endeavors– we can wing it, and we can do a dang good job at it, too!

If there’s one thing in life we should never wing, though, it’s our businesses.

Maybe you don’t think of yourself as a ‘business' (yet), but we certainly do, and we want you (and your clients!) to think that way, too.

Let’s Get Down To Business

If you don’t have the business know-how to make the most of your skills, you could do your best work 24/7 but still feel like you’re just spinnin’ your wheels. We don’t want that, and you definitely don’t want that!

You gotta have a plan, Stan!*

*Even if your name is not Stan, we still highly recommend having a plan

So before you go wingin’ a pitch, proposal, or a bid, let’s put on our businessperson glasses and do a little bit of learnin’.

The following is just a little amuse bouche for ya; our Business Bootcamp is where you’ll find the whole meal– the whole enchilada– if you will. For now, we’ll get right to the juicy stuff and take a big ol’ bite out of pricing.


Pricing Approach #1: Inputs

Pricing based on “inputs” (what goes into the work) is a pretty basic approach.

We sometimes like to call it “cost plus” because it’s just:

The cost of your hourly/daily rate, materials (if applicable)

Plus!

A little bit more.

And that’s all, folks!

What does that look like?

Sounds pretty great, yeah? Super straightforward and easy to explain to even the most critical of clients. Hey, maybe you could wing this whole thing after all!

But what a minute– what about your rent, utility bills, the cost of your equipment, design elements, software subscriptions, etc. etc. etc.

And hey! Where the heck is the profit?!

Guess it’s time to learn about (drumroll, please!) Pricing Approach #2

(game show voice): Could this be the one to take you from “just wingin’ it” to “straight up soaring”?! Pricing Approach #2, COME ON DOOWWWNN!

Pricing Approach #2: Outputs

This second pricing approach is based on what comes out of the work.

It’s all about the deliverables, baybeee. You and the client agree on the scope of the work, you charge a flat rate fee, and you get paid for those deliverables. Heck yeah!

Rejoice For Rapid Results

This is great news for folks who ~get zippy with it~ and produce incredible work in a short period of time. Cha-ching! Why would you charge by the hour and basically punish yourself for being good at what you do? No thanks.

We personally like to be rewarded for being good at our jobs (preferably with cookies, but gold stars will do too), and that’s exactly what you get with the output-based pricing approach.

But you also get (dun dun DUUUNNN) risk!


Risk It For The Biscuit

When using this approach, you gotta factor the risk into the price. Because the risk, my friend, is all yours. The client gets that sweet, sweet price guarantee, and you get to deal with whatever disaster might crop up.

So now your price includes cost, overhead, and a profit with a pretty comfy cushion on it in case of a “dog ate my design work” situation. Because you include all of this, your flat rate is going to look quite different from the hourly rate on paper.

Breakin’ It Down

Remember that lovely little simple breakdown of the hourly work? The pricing model that was so easy for your client to wrap their head around? Wave bye-bye.

But, why-why?

Revealing too much of the “input” when pricing “output” leaves room for disagreements and questions about why a specific task takes so much time, why your materials cost what they cost, why you’re using so much material, etc.

We don’t know about you, but we certainly don’t want to justify our excessive use of colorful sticky notes to every client. I’M AN ARTIST, MOM! I’M DOING ART, MOM!

So what should you break down for your client?

You’ll give the client a summary of the end goals you’ve agreed on and a statement of work that has a single price on it – the total.

We get into the nitty-gritty of this in our Business Bootcamp, but the big important stuff– maybe the biggest, most important…est stuff is right here:

Put It In Writing

While we advocate for a bit of a ~vague vibe~ in your proposal, this absolutely does not apply to your contract.

Using the output-based pricing approach will come back to haunt you (and not in a Casper-the-friendly-ghost kind of way) if you don’t have a really clear and specific contract in place.

This is part of that risk we talked about earlier; if there’s any ambiguity about the deliverables, you’ll be the one paying for it. Where there’s gray, you will pay.

How many options will you make?
How many revisions does the client get?
How long will the project stay open?
How much will it cost if they want more revisions or more time?

Make sure that you go over all of this with your client and that it is all in. the. contract.

It may help to develop a company-wide standard for your contracts, so you are totally prepared for each new project.

Pricing Approach #3: Value-Based

Value-based pricing? Isn’t that a little bit redundant?

Well, yeah, we guess, if you think that “price” and “value” are the same thing.

PLOT TWIST: They’re not the same thing at all!

(gasp)

Confused? Don’t be!

It’s As Easy As CPV

Cost - cost does not account for profit– it’s just the basic labor and materials that it takes to make the thing, whatever the thing is. That sounds an awful lot like our first pricing approach, doesn’t it?

Price - price is cost + profit. You’ve paid for the materials, for your time, and all the overhead. What’s left is your profit. That sounds pretty familiar, too, no?

Value - value is determined by the client. How are they going to benefit from these goods or services? And do they care about that benefit? How much?


If you find all these questions fascinating, check out this video where Chris digs into it further, and listen for our fave quote:

“When value exceeds price, people give you money.”

Using this approach to pricing is a little bit more challenging than the first two we talked about. But something tells us you’re up for the challenge!

To price something according to “value,” you have to know what that value is.

Since that’s going to be different for every single client… there are some things that you should know before you swan-dive into this approach.

(Yes, that was another “wing it” joke. No, we’re not sorry.)

Price the Client, Not the Project

One of the most important pieces of the value-based pricing puzzle is this – price the client, not the project.

Say you’re hired to make a new logo for a local tea shop. You know that they’re just starting out, that they only really need the new logo for their socials, maybe a few stickers, and a rubber stamp for their packaging.

You might charge them $7,000 for the logo design.

Then, miracle of miracles! Starbucks reaches out to you. They wanna scrap their current logo and start from scratch with a new one. They plan to put this on their socials, signage, uniforms, cup sleeves, coffee packaging, enamel pins, hats, etc.

You might charge them $100,000 for the logo design. Why? It’s the same amount of work! But we’re not pricing the work. We’re pricing the client.

Logo Logic

That local tea shop’s new logo could be a huge hit and boost their online engagement and their sales quite a bit. But their revenue won’t go up by millions of dollars the way that Starbucks’ might. The value of the new logo is not $100,000.

It might be to Starbucks, but the inverse is also true. If that local tea shop logo doesn’t do so well, they only have a rubber stamp, some stickers, and a social media logo to replace.

Think about aaaallllll the things that carry the Starbucks logo. They’re prepared to invest a lot of money into solid design work because if they go for a cheaper option, it could cost them a lot of money.

Yep. Feel free to quote us on that one. It’s kind of mind-blowing.

Question Everything

Another important tidbit you oughta know about value-based pricing is that it can really help you out if you build it into your client calls.

We’re always saying how you should be asking more questions than you answer, right? Aren’t we always saying that? Don’t we love to ask questions? Hmm?

Asking questions about what the client wants, what specific results they’re hoping for, how those results would impact their business, and what they would be willing to pay to achieve that desired outcome is a great way to:

Price With Confidence!

If you have some real numbers that detail how your work could positively impact their business, the “big scary numbers” you might’ve been too timid to suggest before are suddenly perfectly reasonable numbers.

Real numbers turn big scary numbers into perfectly reasonable numbers.

That’s great for you, but what about your client?

Inspire Confidence In Your Client

Before you even breathed a word of “price” to your client, y’all went on a journey together. You figured out what result they valued most, how they might get there, and whether you were a good match for getting them there.

This is where you pivoted from “salesperson” to “consultant.” You’ve already helped them so much, and together you’ve come up with a number that feels like a “fair” investment for the value they’re expecting.

They don’t feel like they’re being sold to because you didn’t have to sell to them. They feel like you understand their problems because you do.

They feel like you’re a safe bet because—if you made it that far into the journey—you absolutely are.

There are so many reasons why we prefer a value-based pricing approach, but that is not to say that there is never an appropriate time to use the other two approaches– input- and output-based pricing.

Depending on the type of work you’re doing, the client’s needs, and even where you are in your career, you may go with a different option than our fave.

And that’s completely fine! Just as long as you feel ready to face the big bad business world, with a pricing plan in your pocket and without a wing in sight.

If anything we just talked about made you feel all giddy, like “TELL ME MORE!” first of all - that’s a whole mood. Second, deffo check out our Business Bootcamp and our Pro Group to simultaneously pick up some serious smarts and support.

About
Kristin Lajeunesse

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