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So many designers hate talking about money, especially with their clients and prospects, which makes pricing one of the most dreaded aspects of being self-employed.
I think that’s why so many designers resign themselves to pricing their services by the hour, and that is truly a tragedy.
I get it. Pricing hourly is easy. All you have to do is track your time, multiply and submit an invoice.
This actually causes a tremendous amount of stress. You worry:
- “Should you bill for all the time you spend?”
- “Will they have sticker shock and fall off their chair when they see how long it took?”
- And most importantly, “Will they pay?”
Because if you’re like many designers I mentor, you may be a wee bit perfectionistic and therefore always worrying that your client doesn’t understand how much work is involved to get it right (if you even dare to bill for all the time you spent, that is).
This stress is the main reason I think pricing by the hour is the worst possible strategy for creative professionals.
image from Getty | CSA-Archive
Why You Shouldn’t Price Hourly
Here’s another reason.
If your client has $5,000 to spend on a project and, because you’re a pro, you can dash it off in an afternoon, why should it matter how long it takes you? (And more to the point, why is it their business?)
The only thing that matters is that you deliver the highest possible quality.
The reason you can do that (and quickly) is thanks to your experience and your expertise. That’s why the better you get, the more you should be able to charge.
But when you price hourly, it’s the opposite: The better you get, the quicker you get, but the less you can legitimately charge!
Does this make sense in the design world? I think not.
What To Do?
If you’re pricing hourly, I highly recommend that you consider other options.
Start by learning about all the pricing strategies at your disposal and choose the one that works best. There are plenty to choose from, including project pricing (a.k.a. fixed fees or flat fees), package and tiered pricing, retainer pricing, value-based pricing and more. (I give an overview in this YouTube video, The 4 Simplest Pricing Strategies for Creative Professionals.)
Then, for each and every new client or project, you get to decide which one makes the most sense. Some situations may require a hybrid.
Because selling creative services is not like selling a turkey sandwich, and the pricing process is never as black and white as you might like it to be.
When You Should Price Hourly
All that said, there will, of course, be exceptions.
Indeed, there are certain times when pricing hourly is actually the best strategic option for everyone involved. I’d even go so far as to say that pricing hourly may be your best option if you care so much about your work that you don’t care how long it takes you.
You see, I’ve been mentoring more than one creative professional who gets into a bit of a pickle because they care, perhaps a bit too much, about the quality of their work and end up over-delivering and losing money. (Rob Harr addressed this common tendency in our HOW Design Live Podcast interview about how his web firm Sparkbox decided to price web projects hourly.)
So for you, I’m making an exception to my rule and suggesting you try pricing hourly, to make sure you’re compensated for as much of your effort as possible.
But there’s one big caveat: You must communicate clearly, and often, about it.
If you don’t let your client know how much time you are actually spending, there is bound to be a surprise at the end—and no one likes surprises.
Need more?
- The Tragedy of Hourly Pricing
- Watch the video: The Worst Negotiating Mistakes (and how to avoid them)
- Sign up for Quick Tips from Marketing Mentor
- Listen to the MarketingMentorPodcast.com
And don’t miss Ilise Benun’s session at HOW Design Live in Boston. Click here for more details, and be sure to register by April 16 to take advantage of early-bird pricing!
