Design Domination Podcast Episode #93: How to Price Design Work

Music: https://www.bensound.com

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First, let’s start with some ways to price that I don’t recommend—and why. I think it’s important to understand the pitfalls of these types of pricing.

Hourly Pricing for Graphic Design Work

The one most designers opt for is hourly pricing. I think it’s probably popular among designers because it’s very cut and dry: “I worked this many hours. You owe me this much.”

But really it’s because most designers don’t understand their value and how to price design work otherwise.

Why graphic designers shouldn’t charge by the hour

Pricing by the hour for creative work is garbage.

You get paid solely for your time. If the job takes you less time, you get paid less.

Let’s get this straight. If you work faster, you are punished by getting paid less. And shouldn’t you get paid more if you’re better and can deliver the job faster? That’s good for the client.

There’s this story about Picasso and I don’t know if it’s true or not.

He was sketching a woman’s portrait and when he was done, the woman asked how much she owed him and he said $5,000 or whatever it was.

She said, “What? Are you crazy? That took 2 minutes for you to sketch and do. Why would I owe you that much money if it only took you that little bit of time?”

He said, “It took me a lifetime to be able to do that.”

Do you want to be focused on the project or focused on the clock? Is that going to help you help them? No.

You don’t get paid for your creativity, expertise or the value of the work. You’re usually not charging enough by the hour to cover your expenses.

Your hourly rate may be this number you made up in your head that you thought sounded good. It may not take into consideration taxes, health insurance costs, general and liability insurance costs, retirement contributions, getting new equipment, the cost for your website hosting, domain names, internet and so forth.

Your hourly rate usually gets pitted against another designer’s hourly rate, and that rate becomes the focus for the client. It encourages them to be driven by price and time, rather than on quality.

An hourly rate is meaningless to a client unless they know how long a job will take. Clients don’t necessarily see it that way though. They usually focus on the rate without also considering the number of hours.

This drives me nuts. I see people all the time on Facebook asking for designers to contact them and provide their hourly rates. It’s ridiculous.

Tire kickers shop around for the lowest rate. But a designer with a higher rate could spend a lot less time than one with a lower rate and cost the client less. I can’t understand that mentality.

There’s a saying by Red Adair:

If you think it’s expensive to hire a professional, wait until you hire an amateur.

If they’re shopping by rate and not taking into consideration the number of hours with that, then they’re potentially writing a blank check.

Who wants to do that? That causes sticker shock when they get the invoice. That means they might dispute it: “Oh, well, I didn’t think the project was that involved,” they might say.

They usually have no idea how long something will take and have a ridiculously small number in mind.

It just causes so much nickel and diming. They might even ask if you are charging them the actual time down to the minute or do you break it into quarter hours. I know. I’ve heard this all before.

The next thing you know, they’re shopping around for someone with a lower rate.

They might also say, ”Why did it take you so long? I know a designer who charges less per hour. I’ll use them next time.”

Great! Go for it.

Oftentimes, what happens next is you end up sucking it up and reduce the invoice to appease them and meet their expectations.

There’s also the case of value. Let’s take a logo design as an example. Is the logo worth less to them if you spend 2 hours on it or 20? Should you get paid less because it took less time? Should you get paid more because it took more time?

I realize a lot of designers charge hourly because they want to make sure they get paid for their time. But what about your creativity, expertise or the value of the work?

What about clients who want to know what they’re paying up front, not writing a blank check?

Hourly pricing only benefits you if the job has a poorly defined scope. But you can nip that issue in the bud by doing a paid discovery call—yes, paid and for a flat rate—to help the client figure out the scope.

You’ll be seen as an expert, get more respect and get paid for helping them figure out the approach to the project. Problem solved.

Experts don’t charge hourly for design work.

Per-Page Pricing for Creative Work

Per-page pricing is another option for creative work, meaning it’s based on the number of pages.

I’ve been having a friendly debate about this one with a colleague. I’ve charged by the page before but don’t like it. She does, and that’s fine.

Maybe I’ve just had more crappy clients in my career. That may very well be the case!

Problems with per-page pricing for graphic design work

I have experienced many problems with per-page pricing.

First off, what defines a page? The number of pages in their Word documents? That varies from client to client.

Or does it mean the number of pages in the final layout in InDesign or on a website?

It’s anyone’s guess really, unless you spell it out.

With this type of pricing, the client may become focused on page count. That means they might ask you to reduce text size or margins or start tracking text or reducing the size of images—whatever it may be—to reduce the page count. I kid you not.

You’re spending additional time to reduce the page count, which means you’re paid less, and they will pay less on printing. So let’s get this straight: you’re giving away time for free and you’re saving them money on printing, and you’re getting paid less.

When I have run into that situation, I have told the client, nope. This is based on what I lay out. If you decide to have me modify the design to reduce the page count, you’re paying for the higher page count, because I did that work!

The other issue with charging by the page is that every page is different. One page could be blank, for example, like to get a page to start on the right of a spread. Sure, you could just not count those. OK, fine.

But maybe some pages are body text only and others are infographics and tables and footnotes. Oh my!

A lot of people ask me for a per-page rate for accessibility remediation of InDesign files or for website audits. This is why I don’t charge by the page. A longer, less complex document or website could take less time than a few complex pages. It really depends on the content.

In terms of page layout, though, flowing and laying out only text is much easier than having to address footnotes, sidebars and tables.

Flat Rates for Pricing Design Work

Why graphic designers should charge a flat rate

There’s also flat rate pricing. This is what I prefer.

The benefits of it are that you and the client both know what the cost is ahead of time. No surprises!

The problem is that most designers aren’t charging enough as it is, so they are usually afraid of charging a flat rate. If you don’t start doing this, you will always be pitted against other designers on pricing!

This is why I’ve always tracked time on every project, even when charging flat rates. I can refer back to other projects with similar scopes and get a good idea for how long something might take based on what was involved. Even though you aren’t charging hourly, you can get a baseline for the time involved and then go from there. Mark it up!

Flat rate billing can also result in less admin and billing work on both ends as well. It makes it easy to figure out and send an invoice for 50% up front too, even if you’re giving a range.

Something that’s important to consider with flat rate pricing is that if you’re not sure if you’re charging enough in the first place, at least clearly define the scope, such as;

• get final, proofread copy;
• specify the number of designs;
• specify the number of drafts or time for revisions,

If you know you’re charging enough (most designers aren’t) or that the client doesn’t normally make a gazillion revisions, then you could potentially not mention a specific number of designs or revisions. There are a lot of designers who don’t reference them with their pricing.

There are several ways you could come up with a flat rate.

Content-based pricing

Content-based pricing is one way to come up with a flat rate. That takes into account the amount of content and the complexity of it.

For instance, editors and writers usually consider a page to be about 250 words. This formula takes into account design, white space, etc.

But what this does is give you a guideline to use from project to project.

You’re not necessarily going to know the format a project takes when you’re pricing it. A lot of times, that should be done in a discovery call. Part of what they’re hiring you for is to figure out if this should be a trifold brochure or a double postcard, for example. You shouldn’t be doing that work—solving part of the problem—before you get paid.

Using the amount of content is helpful. Plus, all clients set up their text files differently. They may have more margins or use a larger text size, for example. Maybe they even use page breaks so that certain sections start on a new page, which adds to the page count.

Using a standard word count helps you get a baseline for the amount of copy a document has regardless of how many pages it turns out to be in the layout file or on a website. It’s also not dependent upon the page size of a document because some documents could be 6 by 9 or they might be 8.5 by 11, for example.

If you decide to use two columns in your layout, that will accommodate more text to a page—another variable.

Because of all of these factors, I find this is also helpful to use when comparing pricing from past projects to ones I need to estimate. It gives an absolute—a fixed—measure, not one that changes from job to job.

Value-based pricing/client-based pricing

Value-based pricing and client-based pricing other types of flat rate pricing. Blair Enns talks about pricing the client.

What is the value of the work to the client? What are they trying to accomplish?

Are they a larger company or organization? If so, the work holds more value.

Day rates for creative services

A day rate is another type of flat rate. I’ve used a day rate in conjunction with a flat project-based fee, where the day rate was for being available to make revisions immediately.

I told them the project would cost X and then being available to make any edits that same day they submitted them would be Y.

I may or may not have had to push other work around to accommodate them. They didn’t need to know that.

I was saying, “Yes, I can meet your urgent deadline, and here’s what that will cost.”

Package pricing

Package pricing is a type of flat rate pricing. It could be one time or on an ongoing basis.

It involves a very specific scope. You’ll get this for X price. Anything else will be an additional cost.

This works well when you serve a niched type of client with certain needs.

For example, if you’re a logo designer, you might have a package for coaches that includes a brand identity package and social media templates.

If you’re a web designer, you might offer ongoing web maintenance—a set list of tasks or time for support every month.

The caveat with package pricing is that if a bigger client comes along, they will get bargain-basement pricing. That might be a big win for them and a big loss for you because they should pay more.

Or they might see it as they really expected to pay more than what you’re charging.

Tiered Pricing for Graphic Design Work

Tiered pricing is another way to price your creative services.

It could be flat rate package pricing, where you offer two to three levels of packages of pricing. Again, the scope is usually very specific:

You’ll get the standard package for X price, you’ll get the medium-level one for this price and the highest-level one for this price. This could be one time, monthly, quarterly or whatever.

Tiered pricing can be a motivator for clients to choose a certain package or tier over another. For instance, maybe the cheapest one doesn’t include all the bells and whistles they want. The highest one, though, is more than they want to pay. It can strategically steer them toward the middle package or tier.

Tiered pricing can also be hourly.

I have a client with a huge accessibility job that is a rush every year, and I charge hourly for that, which is something I rarely do—only in certain cases. There is no creative work involved.

Because they have special needs where they cannot provide content until very close to their deadline, I offer a combination of tiered and hourly, which depends on when they send me their content.

For the content they get to me by such and such date, they pay one rate. For content sent to me the next week, it’s a higher rate. If it’s the week after that, it’s the highest rate.

It requires overtime work and at a condensed schedule on my end, so I make sure it’s worth my while. But on their side of things, it accommodates what they are able to do, so it works for them.

Timeframe-based Pricing for Creative Work

With flat rate pricing, I sometimes offer two different prices based on two different schedules. You want it within x number of business days or weeks, it will be this. You want it in fewer days, it will cost this much—meaning more.

This gives clients a choice. They can decide if they want to save money or save time.

How I Price My Graphic Design Services

Maybe you’re wondering how I price my work.

This will sound super nerdy, but I base my pricing on a combination of:

• Hourly—to get a baseline, and not just on the work itself but project management, meetings, etc.;
• Content—how much, how complex;
• Value to the client;
• Size of the client;
• Needs of the client—are there other services I can include that will serve their needs?;
• Timeframe for the project—rushed schedule or non-rush.

Then I give a flat rate—sometimes a range—based on these factors. Only I am privy to what goes into my pricing.

How You Price Your Graphic Design Work

I hope this has given you insight into how to price your work. I hope I didn’t overcomplicate things.

Just know you can be creative with your pricing to suit the needs of the client.

Also, keep in mind that however you decide to price your work is your business—not your client’s. If they ever ask you to justify your pricing to them, that’s a red flag.

I once was asked by a client of 16 years to get on a video call with their board and explain how I came up with my pricing. I will never ever justify my pricing to any client. If they don’t like it, no one’s holding a gun to their head to hire me. I fired that client right then. I refuse to be disrespected like that.

Your business is your business and nobody else’s business!

If you haven’t yet, check out episode 30 on pricing mistakes.

If you’re having trouble charging more and being able to justify it—not to clients but to yourself—then run don’t walk to:

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