Pricing always seems to be a difficult process for designers, artists, developers and others who provide some type of creative service. We all want to make money with our skills and receive fair compensation for our work, but sadly I usually find that many service businesses do one of two things that hurt themselves and others; undervaluing their services or bottom dollar pricing.
Undervalue of Services
This usually happens because a designer or developer doesn’t believe in themselves or because of inexperience. While newbies won’t often get the prices that seasoned veterans can command, they often undercharge causing financial hardship in their lives.
Bottom Dollar Pricing
Some designers or developers just focus on doing work for the lowest bid or price. They hope to undercut their competition or get more work because it’s based on how cheap they are. This is a stupid strategy.
Why Cheap Prices Hurt Everyone
Cheap pricing due to either of these situations hurt the community and yourself for a variety of reasons.
The first is you train customers to NOT VALUE what it is you are doing. I observed this in the screen-printing industry in the late 80′s. Screen printers started to give away the artwork and this in turn educated customers that the design had no value and was not worth paying for.
The second reason these situations will hurt you is that once you start charging a specific fee for your work, it will be very difficult to raise your prices substantially when you figure out that being a starving, unprofitable business is no way to go! You should be in business to make money, not loose it.
What Can You Do to Avoid This?
Research: There is no excuse to not be able to learn the right pricing structure. The Internet gives you every opportunity to learn from others or contact professionals for advice. There are training programs and books that can help you determine profitable pricing for your skill set and experience.
Educate: Teach and show your clients or potential customers the value of what you do. You can blog about the requirements or training you had to undergo to learn your skills, offer free webinars on the ROI of great design, or do a video on the power of correct SEO. Help people understand the value you provide and that the fee you charge is worth that!
Your end goal should be creating a sustainable and profitable business. Don’t fall into the trap of undervaluing your skills or low-ball pricing. In the end, you won’t win and it will damage the marketplace and industry for your future and the future of others.
