Last updated on November 12th, 2020
Freelancers depend a lot on the price they are offered for their creative work. But, not all of them can negotiate well with the clients and ace the art of pricing. Freelancers such as graphic designers must learn various ways and skills to deal with the clients and get the right prices for their services. In this webinar transcript, freelancing and brand identity expert Frank has shared valuable tips and tricks that can help you to negotiate and price your work as a freelancer. Have a look!
One of the major issues torment freelancers is that they do not know how to set the price of their services and get it as well. Even when you know that you have set the prices rightly, convincing your clients is not easy. They want to hire your services at a lower price for a variety of reasons.
So, freelancers continue to struggle with each client over the price issue, and, still, many of them do not get what they deserve. But, the main reason for it is a little experience of freelancers handling such clients.. They are unaware of the client’s mentality and how to deal and convince them successfully into paying your value for services.
Considering that, Designhill, the leading creative marketplace, decided to have the expert’s views on the pricing issues. So, the marketplace conducted an AMA with brand identity expert Frank to get advice on how to set the right price and get it from the clients. The AMA session was held on 22nd September 2020.
During the session, Frank shared his experience on pricing and gave valuable tips to the freelancers in this regard. He gave tips on how to charge as a freelancer and get more than $100 for your services. He also showed who can afford your services and how to communicate with the client. You will also learn how to present your price and negotiate with confidence.
Here Is the Video Of The AMA Session With Frank
Here Is What Frank Advised Freelancers On Negotiating The Price For Their Services In His Words
Frank: I will talk about how to negotiate and price your work and services as a creative freelancer. But I want to change the script here a little bit and say that you are a business owner, a freelancer, working for an agency on a short term contract, working with clients, on your own business to business kind of work, or you are a business owner. So, what we’re going to cover today are five different things.
- What you need to charge as a designer?
- How to charge more than $100 for your services?
- Understanding who can afford your services
- How to present your price with confidence?
- How to negotiate any pushback you have over your price?
- Do’s & Don’ts to work as a freelancer
Three Ways To Price Your Services
Now, you started your freelancing business that you’re looking to price your work in a way that makes sense. Many of you might charge to start with time, or you might upgrade to the project. Then, maybe you’ve heard about value-based pricing. From these three different types of Pricing, we want to look at each of them.
i. Avoid Time-Based Pricing
I don’t think we should be looking at the time to charge for our design services. Leave time for day rate freelance work, after hours of work, and in personal consulting. When you’re off the clock, it’s past 5 to 6 pm. And it’s into your time of the day, outside of work hours, or use it for in-person consulting.
I say not to use time because it can create some animosity between you and your clients. They might become a designer for some reason and scrutinize the number of hours that you spent on that work when it comes to over what they were hoping to spend. So, try to avoid time-based pricing, like the plague.
ii. Value-Based Time For Big Clients
The next one is value-based Pricing. It is called pricing creativity. It’s a very big book, but value-based Pricing, when you get way more confident and work with bigger clients where your solution’s risk needs to be a respectable portion of the value return. What I mean by this is if you were approached by McDonald’s or Coca Cola, and they asked you to redesign their logo, and your price is $500, $1,000, $10,000.
It’s not directly correlated with the risk it would take for them to rebrand. It would be up there of a million dollars $2 million to do that. This is because their brand is worth billions. So, you just be laughed out of the room effectively if you charge your normal rate. Value-based pricing is a little bit of a higher game to play, and not something I’d suggest when starting here.
iii. Opt For Project-Based Pricing
So, what you should be going for is project-based pricing. You have a fee for each project. Now I guess a lot of you will be asking how to charge my clients the right prices. You may complain that no client wants to pay you the right prices that you asked. I hear this daily in Facebook groups, on Instagram, and in sessions like this. It’s a big question.
But, I think you need to flip the question of what I need to charge to create a viable business and maintain your livelihood. This is because your business is there to sustain your livelihood, especially as a solopreneur.
Know your Expenses
So the first step is, list down all your expenses per month. This looks like your rent, phone bill, internet, and groceries for the month. It should also include any insurance you have to pay food for your pet, your Netflix subscription. Do not forget to add your car loan, dining out entertainment with friends, and even savings that you put aside each month in the list.
Know your Expenditures
The second step here is to know how much you will spend each month, which is $2000 per month. Here you should list down all the expenses your business would incur for that month. For example, we can say that the expenses are. You should include things like insurance for your business, Adobe Creative Cloud for Photoshop and Illustrator if you’re a designer and a Gmail account.
Ensure that you also pay your accountant to help you out with your finances and have your website domain and hosting fees. Also, add the expenses toward any books, Pantone books, your computer, your camera, web camera, microphone, whatever it might be that your business incurs. Write down those expenses, which could be something like $200 a month.
Add for Taxes and Retirement
The next step is to add 40% to that total number to account for taxes and retirement. What this looks like in this scenario is adding 40% to the $2,200 a month, which equates to $3,080 per month. Now, this is a worst-case scenario figure. Your taxes might be lower than this, and your expenses might be lower than this, all the different factors.
You can use that additional money if you have no work and not getting in as many projects. You can rely on that money that you have saved, kind of like forced savings in a way for your business.
So, where does your revenue go? 50% of every invoice that you receive should be going to your living expenses. You shouldn’t touch the other half. Or, you touch it only in a business capacity such as for taxes, business expenses, and retirement. But, retirement might not need to be looked at. 10% or your business expenses might not need to be that much. You could even add shares in there if you wanted to invest your money. All these different things you do but look at your living costs are half of every invoice you receive.
So, now that you know you need to make at least $3,080 in this scenario, whatever the figure comes for you. You need to have this to succeed as a business. Ask yourself how many projects can you realistically take on per month? How many jobs can you do per month without absolutely shattering? Your life is at one job a month.
That means each job needs to be $3,080 for you to be an as successful and viable business at five jobs, which equates to $616 per job. Or, you can do 20 jobs in a month, which makes it down to $154 a job. So this is how you need to charge at minimum for your services by making a non-negotiable. You are not haggling with your client. You are telling the client what that price needs to be for you to work with them on that project.
That is how many projects you can take on per month. Which means you can do fewer projects for the same amount of money. If you’re doing 20 projects now, but you only want to do 10, you can go from $154 to $616 per job.
Add your Profit Margin
The other aspect is that you could add a profit margin percentage on top to increase your rate. So you could add 10%, 20%, 30%, 40%, 200%, whatever it is to increase your profit over time, as your experience and credibility increase.
But, what about your hourly rate? I don’t want to forget this because it is valuable for you to know to figure it out as a design business owner. Take that monthly figure and multiply it by 12. So, 3080 by 12 months equals a yearly revenue of $36,960. It might be higher or lower, depending on your situation. We want to take that number and divide it by your yearly revenue by 1920 hours. This equates to the hours in a 40-hour eight week. This allows me for four weeks of sick or holiday leave time per year. This is based on eight hours per day, five days a week, to give you an hourly rate of 19.25 an hour.
Track your hourly rate
This hourly rate helps you track your hours to know if the project remains profitable. So you can compare your hourly rate of how many hours you’ve spent on that project times by the hourly rate you have internally. And see if you’re hitting above or below that mark of what you’ve coded for that job.
If it’s higher, then you need to get quicker. Suppose it’s lower than you can remain profitable. And you could charge more if you wanted to, it doesn’t matter. But it makes sure that you know if you’re profitable on those jobs or not and helps you quote, better in the future. What you can also use it for is to produce your Freelancer day rate.
As I have said, to work as a freelancer with agencies in-house or remotely, a full day rate at eight hours by $1925 is $154 as your day rate. The other thing is that you should be able to use this hourly rate to charge overtime. So if you want to charge after hours outside of business hours, work that the client urgently needs you. You could even put on 100% tax on top of that; it’s totally up to you. Or, you could do it for the consulting time as well.
Designhill: What books will you recommend in this regard?
Frank: If you want to learn value-based Pricing and price creativity, you should read Pricing Creativity by Blair Enns. It’s quite an expensive book. You can get it as an E-book for 100 US dollars. Whereas the hardcopy book was probably double or triple that. The other book that’s good for Pricing is The Psychology of Graphic Design Pricing by Michael Janda, and you can get this on Amazon for probably 30 US dollars. These are the two books I recommend for Pricing as a freelancer.
Designhill: Should one offer different levels of services at different price points?
Frank: Yes, you can, depending on the scope of work you have and the type of service you offer. Let’s say you’re a web designer, and you might have different tiers for packages you do. A simple one might be a template-based website that you’ve already created. It just requires you to put in the logo, the colors, the photos, and the type.
It might only be one landing page or a couple of pages, and then you could tear it to the next tier, which you have, everything’s custom. You could build something like an e-commerce website and tear it that way based on the scope of services.
Designhill: Should the beginners follow the same strategy and what else they can do to understand the value?
Frank: Beginners should avoid value-based Pricing
You should not worry about value-based Pricing, to begin with. I’ve never used it. It never works for small businesses because they don’t see the value, and they don’t have brand recognition and brand value yet. This especially is if you are starting with a new business, it doesn’t quite work. So, stick with project-based and time-based Pricing, doing hourly rates.
Look, you can do it to start with, but you should find what will happen over time. This particularly is when you gain more experience and work quickly, as you want to up your rate. You will not get as many hours to get that right, and you will start increasing to hit the ceiling. You will be up to like an hourly rate equivalent to what a doctor or a lawyer charges.
Realistically, no client is paying that you are better off getting when they see it on paper as an hourly rate. You can estimate the hours that you will take on a project and then price it that way based on your internal hourly rate. But to show your client, your hourly rate gets you into trouble. I’ve heard so many designers get into trouble with this. I’ve never charged that way unless it’s a day rate or it’s after hours.
Having the client understand what it is they’re going to walk away, having to pay either upfront or at the end is going to manage that expectation a lot better. It is much better than the clients guesstimating and thinking they will probably only take them five hours, but it takes you 20 hours, and then clients do not want to pay for that many hours. That’s when hate happens in that relationship.
Tips to charge above $100 for your services
The next part of the webinar here is how we charge more than $100 for your services? Depending on where you are in the world, your service amount or your rate is possibly quite low. You may be in parts of the subcontinent or a western country, using services like Fiverr, 99 designs or sites like Fiverr, and you’re charging at a rate like this. That’s okay, starting. If that works for you, that is okay. But I guess you all want to charge more. So, how do we do that?
It is just to do it. If everything is a well and good frame, how do you do it? So, this is how to do it. You price what you need to charge as a non-negotiable price. This is your right to charge. That becomes your right, and that’s all you need to say to a client. They ask you why you say that’s my right. You can say that is how much I need to charge for the services.
Suppose you walk into a Nike store. There’s a pair of Nike sneakers on the shelf, and you ask the clerk how much is that pair of shoes? I liked them. They say $200. And you say that’s quite expensive. You don’t turn around and say, why is it $200? What do I get for $200? That is what is on the shelf, and that’s what you’re buying there.
And understandably, a client doesn’t see the result. But they should be able to see the results of the work that you’ve already done before. So that way, they should be able to compare the price. If they don’t think it’s worth it, then that’s not your client, but make it a non-negotiable.
Avoid using some services
The next step is to get off Fiverr and 99 designs. You are starting to get some clients, and you are sending something to get some traction. You also have some proof of concept that you can actually solve your clients’ problems and then get off those services. This is because a client that is looking at those sites is not expecting to get an expensive service. They’re looking for a cheap alternative or an affordable alternative that meets their budget at that lower range. It’s a fact of the matter, and I’ve never put my services on these websites personally.
And for me, I charge anywhere between five to 10,000 US dollars for my services as a brand identity designer. So, I am not getting those kinds of clients on Fiverr.
The next aspect is to make your business look more professional. Your client can come across your website or your social media presence. Wherever they find you, they can understand that you’re putting on a professional perception here. They know that you can solve their problem and do it well, and you are trusted. They can see that they can trust you are worth your service.
But how do you instill trust in somebody that you’ve never even met? They’ve never met you, and they have no idea who you are apart from your little Instagram and your website? How do you do it? There’s a lot of different things here. If you are non-English speaking and want to work with Western clients, you need to speak and write English well to communicate effectively. If you need to talk about your services and the work you’ve made, your client understands where you’re coming from, and you understand the nuances about creating a dialogue between the two.
If you just want to work with those in your own country, that’s fine. That shouldn’t be an issue. But still, communication in its essence is to be able to articulate yourself correctly. The other person at the end of the email or a zoom call like this can understand you.
Second is professionalism. You should have your business card. Having a business card helps build a basic and consistent visual identity across all your touchpoints. If you’re a logo designer, you don’t need to flex and make the most amazing logo ever.
My business logo is a G and an F, which is just a font in a circle. That is it; it doesn’t need to say what it is you do, it doesn’t need to say that you are the best designer out there. It needs to be simple and effective and consistent.
The same goes for your email address. Have something that’s custom for you to present yourself much more professionally. It’s the same with your email signature.
The same as well goes for your website. You should have a clean and professional website, even if it only a one-page site. It should just show your face, your name, and your services. You can display on the website the work you have done.
Your website needs to have some clear call to action. Such a CTA can be to get in contact with you or to book a meeting with you, a link maybe, or an email.
Ensure Online Presence
The next one is to have an online presence. You have the opportunity now to have an online presence like never before. You have all these social media outlets to share who you are, what you do, how you do it, why you do it and your personality. It is the content that speaks to your ideal client. There’s no point in speaking to other designers and hoping for work if you teach other designers how to design. Clients cannot create their logos, so there is no point in teaching them how to create a logo.
Show your face to clients
So, you should have a consistent visual identity and language as well. It is authentic to you that you communicate in some generic way and show your face. It doesn’t matter who the person on the other end of the video or the phone or whatever it is. That person wants to know who he or she is engaging with. Therefore, don’t hide behind your logo, even if you’re trying to put yourself up as bigger than you are an entity.
If you are saying that at the moment you are your agency or a company, still show your face as the founder of the CEO, etc. It is just like Steve Jobs was for Apple. Those founders’ faces helped create a connection point with that person so that people know who they are dealing with. They can trust you.
Also, you should share where you are from. There’s no point hiding where you’re from, especially if you’re in India, if you’re in Mumbai, you have a thick accent, and you call me an Australian, I probably know where you’re from, I can take a quick guess. Be upfront and honest with people; that’s what they are looking for from an engagement, especially if you want to charge a higher price. Share your whys, hows, and what you do for your clients to understand a bit more about yourself.
Show your best work
The next is to show your recent best work that is relevant to your target client solutions. Show the works that have solved issues for clients and have a very similar kind of pain points. So, If you are a website designer, show work that solves SEO problems. It would help if you created case studies that show the project process, giving an insight into how you work. And then that way, you can set expectations of what it is they’re buying into. Make sure that you show outcomes and testimonials as well.
Display your works on multiple platforms
I think next showing your work on multiple channels. Use not just your website, but also show your works on Behance, Dribble Pinterest, LinkedIn, and Instagram. If you have the opportunity to do so, you may as well do it. I am terrible at this. I don’t have it across all of these but have it on my website, LinkedIn, and Instagram. Therefore, I need to create some case studies myself. I am still in the learning process here, just like you guys are.
Show your project process
You should have a clear project process. For instance, it may be a meeting and discovery session upfront to understand the client’s needs. Then, ask them what they need to do or how they want to look at what they want to achieve. Then have a project proposal that outlines what they’re looking to do and what you can deliver, having a professional-looking contract with your logo or your details on it the same as your invoice.
And then, understand if the project is a collaborative approach process. Find out if the client involved at any point? Or, do you focus on a solution or brief-based process? Do you have as many connections or interactions with your client as much as possible? That drives personal communication. So, know what tone of voice they have so that you do not get lost in translation here.
The next one is testimonials. Have testimonials that reference a specific project. It can help reviews on a Google My Business Page. If you set that up, you get those five-star ratings with a nice little review there too. You can put testimonials on your website. It’s totally up to you which way you want to do it. You could ask past clients that are willing to be referees. A new client would maybe want to talk to an existing client to get a sense of how the interaction was and how the process went if they were happy or not.
And you can even draft up a testimonial for your clients to approve if they are short on time. The next one is asking for referrals. You know, one client is better than a cold client, especially when the good word comes from someone that they trust, not from you saying trust me, trust me.
You can ask existing clients to refer you to someone they might know in their network. Or, you could ask people in your network, maybe LinkedIn, or Instagram or friends or family, whoever it is, and ask if they know of anyone. This is better than asking them directly if they need services. They might need the service and say I need that. And then you are not directly asking, then you’re asking somebody passively, through that person.
Project yourself as a friendly person
I think the second last one here is personality. So, be genuine and authentic but also be friendly and approachable. Make sure that you have a manner so that clients feel that they want to work with you.
And tell your story as well with confidence, which is a big key here. Build a relationship with your client and not just see them as a number. Instead, treat them with respect, and they will hopefully treat you in the same way. But do not sound desperate as it will not help you get the work.
Charge high prices
The last one is the price. You should gain trust in price if you have a low market price for a high-value problem. So, if they could walk away out of this solution, with $200,000 added revenue, and you’re charging $100, it indicates a low-quality solution on your part. That is why clients who pay less tend to hold your hand to get to a solution that they can ensure works. So they become your art director, and you wonder why the client is so annoying.
It would be best if you charged a higher price because it can psychologically influence clients. They believe that you are the least risky choice for that high-value problem that they need to solve, and you can deliver. Otherwise, you wouldn’t be charging such a high price, and it psychologically makes a difference. So the moral is to price higher since higher price commands, commands greater trust and respect.
And the better you present yourself, the greater the perceived value will be for what you do. There is a reason why I am so consistent on LinkedIn, Instagram, Facebook, and my website. It’s all my face and the same tone of voice, call to actions, and all that kind of stuff. It presents much more professionally. And if your price is high, too high for that lead, they aren’t the right client for you more.
Designhill: How do you save yourself from endless feedback from your client? When you’re charging project-based, do you set a timeframe for the project?
Frank: Yes, set a timeframe. You can add several revisions that clients can have during the project process in your contracts. You should set their expectations of what a revision is that can help.
Designhill: Many designers use sites like Envato. Is it recommended?
Frank: Yes. I use Envato mainly for stock images. A lot of the stuff is for my Instagram and LinkedIn content, and you can use it for client projects. But be careful where you use it because some licenses vary based on the content you use from there. It is worth it, especially for things like mockups, to show your working context. If you are a logo designer to show that logo in a real-world scenario, use those mockups.
Designhill: How do you set the payment process?
Frank: Look, it’s totally up to you. I typically ask for 50 percent in advance and 50 later, if it is a smaller kind of job. If it’s a really small job, I ask for 100% upfront. So, if you have a project process that has to say four parts, such as discovery, strategy messaging, and then the design, I’ll split them up and take, let’s say, 33% for each allotment. Or, maybe I’ll split the payment as 15%, 25%, and 30%, whatever the last remaining bit is. Therefore, it is the way you do it.
But make sure you’re getting payment upfront before you start. And then ensure that you get the end payment if you’re delivering with 50% left. Make sure that they pay that invoice before you’re handing over deliverables.
Designhill: How can fresh graduates with no experience get freelance jobs?
Frank: Look, that’s where sites like Fiverr are useful. I think even Designhill can help you get clients for those first jobs. I recommend that even if you can’t find any work, do work. There are websites where you can receive fake briefs and create work around that. You can then put that work in a portfolio so that when you approach clients, they can see what you can deliver.
Designhill: Can you give freelancer designers tips to get started on Upwork, Fiverr, and all such sites?
Frank: Again, you’re competing on the sites for all these kinds of sites. You compete against other designers, and you want to be the only one that the client is thinking about. So, it would be best if you got in front of their face. That’s where social media comes in. You can do a Google search and type in the job title like CEO, Managing Director, marketing manager. Then up comes a profile of that person on LinkedIn that you could connect and engage with their content if they put out content and a similar kind of thing for Instagram.
But, it generally depends on if the owner of that Instagram account is the owner-operator. If they have a social media team, you will probably get a roadblock. But you could reach out and say; I’d like to have a conversation with your founder or CEO or managing director. Is that a possibility? And how could I get in contact with them? Because I think I might be able to help with some services here if they need something like this.
So there can be some roadblocks getting in there, but having something like Upwork, you’re competing to get work. You are pitching work rather than having a brief and then creating something bespoke. The client hasn’t seen it yet, but they are trusting you to get to a solution.
Designhill: Can you explain a bit about the scope and job opportunities for graphic and UX designers in your country?
Frank: There’s a heap of opportunity in Australia. Many businesses in Australia, UK, US, just need to look for them. They are always out there. Some people need help; whether they know it or not, it’s about getting in front of their faces. And it might only be helping with them, helping them out to begin with, with smaller little jobs.
I know a mate of mine who does signage work and branding. He’ll walk into a business and say, I just saw your sign up there, it looks a little bit odd, the light isn’t working, and that something I could help you with? Or, he will go in and say, do you mind if I leave my business card if ever you need some signage work or some branding work?
And if you have a business card, and you say that you can give you a call in a few months. And they say no, or they give you an average business card that they’re not proud of. Hey, can I help you with my business and start with a small entry-level job. They can start trusting you, and then you can maybe sell your big-ticket item, which might be a full brand identity, whatever it might be.
So, starting small can help to get your foot in the door. You might need to do some work with agencies too. So get in the door of bigger agencies that might have overflow work done by freelancers. They won’t have too much work on their plate. You can knock on their door to find if they need some work done. Tell them that you can create UX wireframes, whatever it is that you do, and start that way. And, you might build a network in that respect.
Designhill: How to deal with clients that think they are on Freelancer platforms to hire cheap Asian services?
Frank: It’s a reality that you can’t get away from it. Clients are going to these particular websites looking for an affordable option. You need to get off there, obviously, to be able to market your services with no platform involved, no middlemen involved. If you want to charge significantly higher for your services, then help that client understand that your services are worth something.
It would help if you got off these sites, unfortunately. And that’s from a Western perspective, from Australia, from the UK, from the US. There’s an unfortunate stereotype that working with those in the Asia subcontinent, that we’re going to get a cheaper rate. It’s such a really bad stigma in my country in Western countries.
Designhill: How do I know who can afford my services?
Frank: You can make an educated guess. But how do you do that? First, consider the business size. If you can understand how many stores they have, how many employees do they have? How many products and services do they have? How much do they sell their products or services? If those numbers are pretty low, then you’re probably going to have a client that doesn’t have a problem that’s worth solving.
So, if they only have one store, they’re a small bike repair shop in the streets of Mumbai. They’re probably not going to have the money to afford and see the value in doing that. Whereas you can go to a big multinational company that might be in Pune. I’ve worked with these companies. Therefore, don’t ever tell me that there are no big companies in India or Asia that can’t afford your services because they can.
But I just know there’s a lot of you guys that are designers in your country. To find these people is going to be a rare opportunity, but they are out there. What country are they from? Are they in an affluent area? And this is kind of a generalization. Potentially, clients in countries like Australia, where I am from, the USA, UK, Canada, France, Germany, Switzerland, and Scandinavia, tend to value creative solutions more for their businesses.
We are turning over potentially way more the US dollar amount, then possibly in Asia, Africa, Eastern Europe, kind of regional areas. So, if you’re looking for gold mines in Australia, USA, Canada, France, they potentially have higher budgets, but not always, it depends on the client that you’re looking for.
Think of existing touchpoints
Then again, you need to think about the existing touchpoints they already have. So, do they have branding, a website, signage, an app, etc.? Depending on how they look or have been executed, they may not be solving their problems well enough. And obviously, it could be better. But that’s for them to say that their logo sucks, or their website is crap, or their app is terrible to use.
If they ever ask you, what do you think? I always say that I think things could always be better. It depends on if you are happy with your solution or not. If you’re not, we can look at it and see how we can improve it. That’s all you need to say. But if they have these things, then you know that they’ve executed a solution before and they may have paid for their services.
So they may be in, you know, need for something new. If it’s kind of lacking. It’s a bit if it’s a bit dated, hasn’t been done in a few years, all these kinds of things. So there are some little telltale signs.
Four Ways To Niche
One big tip here to be a high-value service provider is that you should do niching. There are four different types of ways to niche down to be specific and what it is you offer as a service provider, as a creative as a designer whenever you do.
01. Geographic Location
The first is geographic location. You should focus on people such as just in Sydney, Australia,
02. Specific Industry
Focus on a specific industry such as a real estate agent, people that sell houses and buy houses for people and rent houses for people, etc.
You can focus on the deliverable. So, when specifying your services as a website designer, you only do websites. That’s what you are good at.
Then, you can specify your niche as a specific problem such as SEO traffic.
If you compiled all four together, you are niching down significantly. So if you were focusing on Sydney, pet businesses in Sydney, Australia, that are real estate agents that need web design, and specifically need help with SEO traffic, you are niching down. Then, you can go to the service provider, which I think I’m getting ahead of myself here.
Why do you want to niche?
There are some key advantages of having a niche for yourself.
- You become the go-to person. Therefore, you’re way ahead of yourself, it helps you also gain referrals from those that are in their industry. So you become that go-to person, and you can help others like them because they’re going to have a network of people like them.
- You can charge a higher price for that specialization. This is because you are the person who knows how to solve it.
- You can better solve that problem. This is because you know the answer to that problem.
Analyze your niche position
But before you niche, you should take a deeper look at the niche. You need to know would that niche be able to afford my rate. Find out if there are enough businesses in that niche to make it viable. Then, know also if there is the possibility for repeat business in that niche.
So, find out if they need reoccurring work, something like social media content. Do they need to repeat social media content? Do they need a new logo every month? Probably not. So that might not be a viable area to focus on.
Some Niche Myths
Some niche myths need to be exposed.
One of these myths is that a lot of people think that you will get pigeonholed into just that niche. These are some things that might expose some of those biases in your head. Because you work in a certain niche that does not mean different clients will not want to work with you or approach you. I said that I work with tech companies and Aussie businesses, I have recruitment companies from the US, clients ask if I can help them. That’s kind of my niche. And while people might ask me for a label design for a bottle, I don’t typically do that. I do branding design doesn’t mean that if your niche that people aren’t still going to, you know, contact you.
It also doesn’t mean that you have to offer that one deliverable. So, if you only do website design, you could do as I said just before you could offer logo design. It all works in part and parcel that if you can offer more, you can add sell upsells or not add sell upsells to your services to be able to charge more.
You are not locked into that niche for life. If you find it is not viable, or it just dried up, you can change it. Don’t feel like you’re locked in.
Tips To Present Your Services And Prices With Confidence
You should be able to present your services and prices with confidence before your clients. Here are some tips.
i. Be confident about your services’ worth
First, you should be confident that your services are worth the money. Have this believe that your services can deliver more than their value and be able to prove it. You need to be 100% certain that what you are offering is of value, you need to believe it. If you don’t believe that, then why should your client and you need to be able to prove that you can do it.
So have those testimonials, case studies, and work to show that you can do what it is you say you do. Otherwise, you’re going to lead your client to false expectations. And there are a lot of people like that. You are trying to compete with who is setting clients up for failure. But if you can show it is what you can do, then it is fantastic.
ii. Say your prices confidently
The second tip is that you should be able to say your price. This is like saying that the sky is blue, or that the earth is round. But you need to be able to say it as clear as that. We can all confidently say that those two things are fact. You might need to practice it in front of the mirror with your wife, with your spouse, to your dog, whatever it is to get you comfortable saying your price. If it’s that $3,080 you need to look in the mirror and say yes, Mr. client, it is $3,080. That’s all you need to say.
If you start saying like it’s, um, it looks, it’s typically it’s around 3000 and 3080. Is that okay? How would you buy that? No, you say it’s $3,080? When can we start? That’s all you need to do. In other words, don’t lie. You need to be able to say that with confidence like the sky is blue or the earth is round.
iii. Quote your price in an exact number
The third tip is to provide your client with an exact number. For example, tell the client that your price of services is exactly $2239. Do not give them a rounded number like 2200 or $2,000. So, that way, it gives you a bit more confidence to know that you’ve developed this price. You give the impression that maybe by your internal hourly rate times by the number of hours that you think it’s going to take to do so.
So once you’re good with your pricing, give a random number. That’s how I go about it. Just state that number. Don’t start justifying why it is that price. Just say that’s the number, that’s the price. That’s it. Say that the price is $2,500, when can we proceed? Think about it this way. If I’m not confident in my services or price, why should my client be?
Designhill: How can we know clients from Instagram are genuine?
Frank: Instagram is a funny one. Typically, they’re not going to be big businesses that are looking for your services, unless they are a marketing manager or someone that is looking for your particular services on behalf of their boss. It’s a bit of a harder one. LinkedIn tends to be now the one that you are connecting more with those that are owner-operators. This is because you engage with a personal profile. So if you put out content there, you should use the kind of relevant hashtags.
I’ve had this in the last few months. A lot of people contacted me looking for work as a result of that. So if you have a good presence, you make good content that looks like solving their problem. That’s a great way to do it. But knowing whether or not they’re genuine is a bit of a vetting process. Get them on a call if you can, and ask as many questions as possible to see if they’re genuine and interested. Throw out your price early if you can to vet that person out and weed their budget out.
Designhill: Starting a brand to finding clients or freelancers, what’s the best way to get started and try to get clients creating that presence?
Frank: If you’re starting new away from Fiverr, and all those kinds of freelancing platforms, you should have an established presence. Create content showing up every day on social media. But also look for people. Do not just let people come to you, be proactive and engage with people that you find interesting, that are putting out interesting content. You should be genuinely wanting to create interactions and play a longer game, rather than a short term sales thing.
So, don’t just connect with someone and send them a DM and find out if they need a logo design. That’s not the way to do this. Play a longer game with this and understand who they are, what their needs are, how their business is doing? How’s it going with during COVID-19 at the moment, so relatable issue, we’re all going through. Start having a dialogue with somebody and now check out your profile as a result of that via Instagram or LinkedIn. I guarantee you, if they need your services, they will call back to you and say, hey, can you help me out?
It takes a long time. I know it took me 12 months to get some people in my inbox to say can you help me. And I’ve been before that writing in a wave of referrals. The other point to it is referrals. Asking people in your network, friends, family, just exhaust that resource, if you have it available to you.
Designhill: How do I deal with pushback from clients about my price and negotiate with clients?
Frank: If you can’t get a budget from your client to be estimated, start at a high ballpark range, or give them a price range. You could present them with three prices tiered, and then scale up the number of inclusions of the scope between those three prices. If they want to go for the real money deal up to 10 grand, they might go for it, whatever the price ranges, they have a price bracket. If the price comes in too low at that bracket, they aren’t your client. Tell that you think we’re in two different ballparks here. Don’t waste your time and refer them to something like Fiverr.
But they should not be given a shock when they see your price on that proposal. And they go oh my god, no way no in hell no way in hell, I’m not going to answer this person, because I’m so embarrassed that I can’t afford the services. That’s what happens. That’s why people ghost you to get to know if they are comfortable with your price first.
Avoid lowering prices too much
The second thing is to realize that business is a negotiation. And negotiations mean that a client can push back on price. That’s okay. It’s whether or not you want to play ball and come down. But what I would say is never lower your price for the same amount of deliverables, change the scope of work, which is the fourth point of mucking those points up. Change the scope, reduce the scope.
If it’s a website, logo, and business card, take one off until you get to a price that they’re comfortable with. And then maybe they can do it in the future. If they want, do not lower your rate for promised future work. They may say, we’ve got all these projects we can help you do if you lower your rate now. And it’s like I’d like that in writing in a contract that you have some more projects that we can sign on now. Or, you can do this right now. And maybe over time, I can reduce my rate for that future work.
Give more values to clients
Don’t work on false promises, and add more value in other ways. If need be spent more time with your customer, your client will add bonus and little freebies. I add animated logos into my branding as little you know, unexpected little additions that delight.
And thirdly, there are two common pushback scenarios that you guys are probably going to get. The first one is that clients say that you are too expensive. We only need a logo, or we only need a single-page website, or we only need this one illustration, not a whole suite of illustrations, etc. You say back to them. Can I ask you, Mr. client? Why do you want a logo? And you keep asking why questions until you get what the problem is? The problem in this scenario is that we want to attract more customers to our restaurant.
He said, okay, fine. You then ask questions and you keep asking questions until you get to the next result. So in this scenario, here is how many more customers do you need more than what you currently have? They give you the goal here, and they say 20, more than the 40, we are already getting each day. And we’re open for five days a week, so you know what the goalpost here is that they’re trying to achieve as a result of creating a logo?
And then you ask as well, the what question and you keep asking what questions until you get to the next stage. And this scenario is what is one customer or table worth for your business. And they give you the measure for success, they tell you that $50 per customer or table is what it’s worth, to increase our sales here. So you do a quick bit of math in this scenario, that won’t always work like this.
But in this particular kind of situation, they want 20 more customers, you times that by $50 per customer or table. That’s an additional thousand dollars per night, you times that by five nights that open per week. That’s an additional $5,000 a week, you charge, then times that by 14 weeks to be goddamn generous, rather than 52 weeks, you give them 40 weeks.
And you tell them, that’s going to generate them an extra $200,000 per year in added revenue. So you come back to them and say well if you believe Mr. client that a new logo is going to help you bring in $200,000 worth of new business like you’ve just told me here is my $2,000, right for my logo not worth that investment. Because one week alone would two and a half times their money. So that’s what the solution and the value is worth to them if they execute on working with you.
Help clients see the value
So, it is value-based pricing. It is a little different because you’re attributing their value to your rate rather than setting a rate based on what the value that they’re going to get. You are comparing here the two to help them see the value in what they’re going to get out of it. If you did it in just one week, or if you got the $100,000 for 2000. That’s still an ungodly amount of return for them on their money.
If they don’t see it, then look, if all prices a potential client is focused on, you need to start having a business conversation with your clients. Such clients don’t add and so, first, see the value of the solution they desire. In case there’s no financial goal to it, then either move on or turn it to an emotional conversation, which is the next scenario.
Scenario two is that you are more expensive than other designers who are cheaper. That’s pretty common. So you say oh, nice, you’ve reached out to a few other designers then. You just want to ask if they’ve contacted other designers, or they are just making up numbers here? You know, at this point, they are shopping around to get the best deal for them.
Bring the service comparison
The next move is that you ask the client do you mind if I ask you what you will know. What do you happen to like about their work any better, and you let them compare their options. You don’t let them ask you to justify why you’re better. You let them do that talking. And they say, well, look, it’s not better, but they are clearly cheaper than what you’re quoting your price set. So at this stage, you might be equal in quality. And that’s okay.
You’re still at a price conversation here. So you still want to flip this? And you say, Okay, fair enough. And would you say that you’re more confident in them? This turns into a price conversation, sorry, turn it from a price conversation to an emotive conversation. They say, well, you know, I guess cheaper doesn’t give us an integrator level of confidence. And this is where that client could realize that cheaper may not be better.
So you say that you will level with you and he missed a client. If you’re not 100% confident I can help you solve your problem, then I really wouldn’t feel comfortable taking your money. I know this just causes harbored resentment down the track, which isn’t great for any business relationship. If you are annoyed that you spent all this money, and you’re not confident that I’m going to deliver here, it’s always going to cause tension down the track.
But I know I can help you and have the experience of helping others like you. And in this case, if you do have that experience, but are you confident in working with me? That’s the question you need to ask one big long question. But that’s the question you ask. There’s no need to convince them that you are the better choice. Let them understand that you are the least risky option here.
So, if the price is the differentiator, change the conversation away from price. Let them compare their options and convince you that you are their ideal choice to be the better value option. Don’t bad-mouth fellow creatives in that conversation. If someone else’s cheaper and you know that person doesn’t bad mouth him, it makes you look bad.
So we covered all these things, what you need to charge as a designer, how to charge more than $100 for your services, understanding who can afford your services, how to present your price with confidence, negotiate your client push back over your price.
To work as a freelancer, remember these four things
i. Every person is not your client
First is that every person that contacts you isn’t going to be your client. They’re not a client until they’ve paid that deposit or an upfront payment.
ii. Ensure exchange of values
The second is that business happens when there is an equal or greater exchange of value. So you need to ensure that what you offer and or you deliver has greater value than the price it costs. Or, even just equal value for your client to solve their problem. If you are offering something that is an emotional thing, get them to feel prideful about their logo to put on their shirt. Make sure that is an equal exchange that they’re happy to part with that money. Or if it’s that monetary value, that they’re going to grain $200,000 more in just that one year alone, is that not worth it. You need to make sure what the goalpost is here.
iii. Clients need you
The third point is if clients could have done it themselves, they wouldn’t be calling you. They are calling you in the first place or contacting you in whatever shape form. That means that if your price is their barrier, especially if it’s a reasonable market, right, then the solution just isn’t important to them.
iv. You solve business problems
The last point is that if you are helping other businesses, you are solving a business problem. You are not just a creative, whimsical, you know bit of art, you need to understand the value of what your service is as compared to the value of the solution for their business over time. You can’t guarantee long term success. But you know that’s where it could go based on other industry examples and proof of that concept.
Designhill: How to pitch a client on Instagram?
Frank: Don’t pitch on Instagram. Don’t do it. Just create a relationship with that person. Say, how are you going? How’s your business? I love your product, your service. I love your content, all these kinds of things, and then start following along with their content over time, build that rapport.
Don’t show you are desperate
You don’t want to come across as desperate that you’re there for work. Instead, you just want to show that you’re genuinely interested in it might take six months. I have got to say that long term engagement may pay off to something they may not want your services, you can expect them to want your services.
And you can’t tell them that you’d love to work with them unless they are looking to partner. Say that I love what you’re putting up here is this something I can help you with and elevate this even more and be a part of this. Those kinds of things are the best way to go about Instagram and LinkedIn as well.
Designhill: I’ve started to work with friends and relatives to work with real clients. Should I have my own company for invoicing?
Frank: Yes, if you want to work with clients, you need to invoice people professionally. You could do it by PayPal, or via all these different sites that have invoice templates that you can create. You could create it in Adobe InDesign or even Microsoft Word or Google Docs and send that as long as it has their details, your bank, or payment details.
If you charge GST, it needs to say tax on the invoice. If you don’t charge this GST or VAT or any kind of extra tax, it just needs to say in the invoice that it makes it more professional, you have a record of that sale. And you can use it for your accountant, your camera is going to love you if you have invoices. And even your local tax authority in your country is going to love that too if you get audited.
Designhill: If the overall project contains multiple different deliverables, do you price each one separately?
If you put your deliverables into three different sorts of tiers of price attributed to it, don’t itemize the list of inclusions of what they each cost. This is because a client will just cross them off. And then you’re left with a confusing result of the price that you didn’t want to do it. You just give a total price for what the inclusion is. That applies if it’s just a one-tier price option as well.
But don’t itemize your price amounts. Tear in different amounts with different inclusions or more inclusions. The higher it goes up in price, or make it a staggering stage process where arcade stage one is branding, and doing engagement. That’s $2,000. And then the next stage after you’re happy with that is a website that’s another $2,000 or $3,000. And then you’ve got signage, that’s the third stage. So, each one of these is a different contract, a different invoice, and even separate invoices if you want to manage them that way as well for payment cadence.
These are the key points that the brand identity designer Frank has to offer to the graphic designers. Hope that expert advice helps the designers negotiate the best prices for their works.
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Graphic designers should come up with the right pricing for their clients to work satisfactorily. But to achieve that goal, the designers should first understand the right price level, the clients’ business, your value of services to the client, and negotiate with confidence.