Pricing your services as a creative professional is tough. You look to others for guidance, but they can’t be in the room with you or on the Zoom call with you when you’re talking to your clients.
That’s why it’s important to understand the different pricing models that are available to you – and how you can use them to diagnose client problems and confidently charge what you’re worth.
This article is a written excerpt from Chris Do’s latest video titled, How To Charge For Design And Creative Work. It will walk you through methods for pricing and how to ask questions to uncover your client's true needs.
Three pricing models for creatives
It’s important to remember that no one solution works for all people at all times, which is why it’s good to know when to change the pricing model based on the project at hand.
The three types of pricing models are:
1) Time-based pricing: where you charge based on an hourly rate. It’s how many hours you are working on the project multiplied by how much you charge per hour.
2) Project-based pricing: where you charge a fixed fee per project.
3) Value-based pricing: this is where you charge based on the value provided.
Value-based pricing
Value-based pricing is the model that most creatives want to implement. To start using this model, you must shift your focus from time spent to the value provided. VBP (value-based pricing) involves having a dialogue with your customers to uncover what they value – and every customer values things differently.
Ironically, although it may be difficult to master, it is the most fair pricing model because it allows you to price something for more or less, depending on the situation. Most of the time, as designers and creative professionals, your value will extend beyond the materials and the time the project takes. You are creating transformative experiences for people.
How to choose the right pricing model
If you’re a designer or creative pro wondering how to choose which model to approach a client with, you first need to understand what you’re really selling.
Are you selling time?
Are you selling units of product?
Are you selling units of value?
Most people in the creative space default to selling units of time when time is not a good measurement. We usually put a false equivalence where we think more time equals higher quality so that we can charge more – but that’s not always the case. Usually, people want to pay more for a faster result, and quality is debatable, highly subjective, and not always 100% true.
For example, if an artist takes longer to render a painting, does it make that painting more valuable than something that takes less time? Renaissance oil paintings, for instance, are they more valuable than a Picasso painting? Is a Renaissance painting worth more than a Jackson Pollock painting? Interestingly enough, post-modern abstract impressionist paintings tend to command a higher price. So, we see things tend to be measured by aesthetics, notoriety, technique, and novelty… not necessarily by time.