One question we see asked a lot on our Facebook group and in others has to do with pricing. People are often at a loss on what to charge, how to establish their pricing, when to raise their rates, and so much more.
Kory here! I know from experience that figuring out your pricing can be really tricky, but unfortunately, this isn’t one you can turn to your peers to get the answer to. Today, we’re bringing you a sort of broad episode on pricing to help you feel more comfortable and confident making decisions on what your pricing strategy should be for the new year.
Hourly vs. Package pricing
One of the first things you want to think about is how you’re going to price your services. There are two main ways to do this: hourly projects or packages. Krista and I like to have main packages that we offer clients because it’s a lot simpler. However, we still customize our packages or do hourly work when we need to.
One downside to package pricing is that it definitely ignores the size of the business you’re working with, which is tough primarily if you work with businesses of different scales. For example, you may find yourself charging an experience business owner and new hobby blogger the same price, when it might be easier to charge the business more than the blogger.
The alternative to packages is working based on the number of hours you put into a project. These types of projects are trickier because you really need to have a good idea on how long it will take you to do things rather than taking a guess. I do offer hourly projects, but they’re usually only small projects like making tweaks to a past client’s website.
Coming up with your prices
When trying to come up with your prices, it might seem the easiest to just charge the same or less than what your peers do. However, that’s not a good way to develop your pricing strategy. Instead, you want to consider your experience and what you’re giving your clients. When you’re just starting out, it’s okay to have a lower price point than others and slowly work your way up.
Here are a few questions to ask yourself to help establish your pricing:
- How much experience do you have compared to your competitors?
- How many similar projects have you done in the past?
- Do you have any unique skills that boost your experience level?
- Will you spend the entire project googling how to do things?
If you ask yourself these questions while deciding on your hourly or package prices, you’re going to have a much more realistic idea on how much you should charge.
When to raise your prices
The biggest thing that people seem to ignore or overthink is when to raise their rates. I’ve totally been there: either charging too low for too long or thinking about bumping up my prices before it’s time. There are a few great signs that it’s a good time to raise your rates, though.
- When you’re consistently getting inquiries and booking new projects
- If you’ve made a change to your packages and are offering more in them to your clients
- If you’ve learned a lot and gained a lot of experience in your area of design
It doesn’t hurt to re-evaluate your pricing about 2 times a year to make sure that your prices are still good. After the first of the year is good because this is usually when you’re making changes to your business and can evaluate what you’ve learned and how you’ve grown over the past year. Sometime in the middle of the year is also a great time to consider your prices.
When to discount your services
I’ve seen a lot of designers ask in various groups when they should discount their services. This is definitely a personal preference; some people are more comfortable with discounting their services more often than others. However, I’ve seen some situations where the designer doesn’t know if the specific situation is a good time to discount their prices. There are two important things to consider here –
How excited are you about the project?
I’ve seen several designers get inquiries from local businesses, startups, friends, family, and nonprofits for example, and these are when most designers would think to discount their prices. I’ll be honest, the only time I discount my services now a days is when I’m doing work for my dad. That’s it. I know Krista doesn’t discount her services very often either. However, if you’ve had someone reach out to you with a project you’re really excited about, you can definitely give them a discount on their project.
Are they not wanting to pay what you’re worth?
Unless you absolutely need the project to be able to eat this month, I don’t recommend discounting your prices. A lot of times potential clients will reach out to you to get a quote when they know already that they don’t want to pay it, then they’ll nickel and dime you trying to get you to come down as much as possible. This isn’t a good way to start the project; in fact, it’s a huge red flag for us. Really consider how much you need or want the project before doing any sort of discounts for these people.
Why we post prices on our sites
The last thing we see talked about a lot is whether or not you should put your prices on your website. This always made me think of the saying “If you have to ask, it costs too much.” If your prices aren’t listed on your site, then a lot of potential clients are going to just assume they can’t afford to work with you. Not only that, but it can also lead to getting a ton of inquiries from people who can’t afford you since they don’t know what you charge.
For this reason, I’ve almost always listed my prices on my site. I would rather lose out on a few inquiries than not get any or spend an entire day each week responding to people with much smaller budgets. If you typically have a lot of custom packages, a great way to still list your prices is to have a “Starts at” price listed.
- Spend some time in the next few weeks taking a look at your pricing and decide if you need to raise your rates for this year
- If you aren’t already, post your prices on your website