Many web designers fall into a trap by pricing their services lower than they should, which can have a serious impact on their business. Here is a quick look at the many different ways that under pricing your services can hurt you.
Obviously, charging lower prices will mean that you’ll make less from each project. Of course, the mindset of many designers is that they can ultimately make more money by charging lower prices and attracting more business. While that can be true in some cases, it will require you to work considerably more hours to earn the same amount that you could make with higher rates.
Attracts Bargain Shoppers
Many potential clients will contact designers based on their prices. From my experience, if a potential client mentions that they’re contacting you because your prices are low, this is a very bad sign. These types of bargain shoppers can be some of the most difficult clients to deal with. Sure, I understand that business owners need to be wise with their expenses, and that includes the amount that they pay for a website. However, these types of clients often don’t understand the huge gap in quality and types of services that are available. They want an award winning website for a thrift store price.
If you are pricing your work low, be prepared for clients that are looking for something that is too good to be true. Some clients will expect you to jump through hoops to create a site that is worth 3 times what they are willing to pay. Personally, I’d prefer to work for a client that has chosen me because of my abilities, my experience, or just about any other factor than my price.
Perceived Value from Clients is Lower
I’ve noticed over a period of time that your prices have some effect on the client’s perspective. If a client sees a low price tag it is natural to classify you in the same category with other designers that charge similar rates. Hopefully that is an accurate evaluation in your situation, but if your prices are too low you may be leading your clients to undervalue your work. Sometimes by charging a little bit more you can cause clients to see your work as being a bit higher quality. I don’t think this really applies to the bargain shoppers, but more so to those clients that are a bit more educated on the subject of web design and what it really costs.
Your Own Opinion of Your Work is Lower
How much is your time worth? What price do you deserve? If your prices are too low you may be subconsciously convincing yourself that your work is not worth more. Being able to charge a higher rate and having clients that are willing to pay that much may be a positive boost for your confidence. As a creative art, web design can be affected positively or adversely by your mindset.
Your Work Suffers
If you are not making very much from a project you may rush through it so that you can finish and move on to something else. I know I’ve found myself in this situation before. It’s easy to say “I’m only making $X for this work, I don’t need to do any better than this.” As a result, your work will be less than your best. If you’re making a reasonable amount you should be able and willing to do your best work.
Potential clients that aren’t serious or dedicated to actually going through with a project will contact designers with low prices 9 out of 10 times. You’ll spend your time talking to them about what you can offer, how much it will cost, how long it will take, and every other detail they want to know. Then they still won’t go through with it. Of course, not every potential client will choose you, that’s just the nature of being a service provider. However, you can eliminate some of these potential clients that really aren’t that serious by quoting a higher price.
You Wind Up Competing Based On Price
Competing based on a low price has worked well for Wal-Mart, but it’s not a good idea for most designers. If your main selling point is that your price is lower than your competition, you will attract clients that you probably wish you hadn’t attracted, and you’ll really never be able to raise your prices unless all of your competitors do. If someone comes into the market and undercuts your price, then what do you do? Instead, focus on providing the highest quality work and the best service possible. You may even want to specially if that gives you an advantage, but avoid making price your main selling point.
What’s Your Opinion?
Do you have anything from your experience to add to the conversation?