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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.

Lower Income

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.

Attracts Tire-Kickers

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?

Pricing is a dilemma that faces all web designers (and other service professionals) at one time or another. There are a number of decisions that need to be made regarding pricing, and one of the most common involves offering fixed prices for different types of projects or providing quotes for each individual project. If you look around at various web designers you’ll see a bit of both, although you will probably see more that do quotes. In this article I would like to take a look at some of the benefits to each pricing strategy. There is no right or wrong method, but you should consider these factors before deciding on your strategy.

The Pros of Offering Set Prices

1. Less time is spent with potential customers that don’t result in any business. Quotes can take a good bit of time and if a high percentage of your quotes are not generating work, you could be wasting valuable time. It should also be said that any designer offering set prices should allow themselves the flexibility to up the price if it doesn’t fit into a specific box.

2. Potential customers like to see prices. Seeing prices can put customers at ease as they will have a much better idea what a design from you will cost. They may be hesitant to contact a bunch of potential designers for quotes, and finding a designer with set prices that they consider reasonable may encourage them to not even seek quotes from others.

Comparing the price of one designer to another is more feasible with set pricing (although a negative is that some customers tend to decide based on the lowest price rather than factoring quality into the decision). In general, I think most potential customers prefer to see set prices.

3. You may get more interest with set prices. Most people would rather contact a designer knowing at least the range of the price, as opposed to contacting a designer for a quote not having an idea what the price will be. This will not always be the case, but from my experience set prices will often generate more interest. On the down side, designers that offer low set prices will get inquiries from a lot of tire kickers that never wind up taking any action.

4. More consistency in prices. Providing a quote for each individual project can sometimes lead to a great deal of variation in prices. This can be a good thing for designers when they are able to make more money, but generally consistency and stability is more desirable. With set prices you will avoid quoting too low out of fear that the customer will go somewhere else. As a result, you won’t wind up doing work for less than you should.

The Pros of Using Price Quotes

1. More flexibility. Each project is unique and set prices really don’t account for this. Providing price quotes will help you to price jobs according to their individual requirements and demands. It should be noted that even with a strategy of offering quotes you will still find yourself dealing with surprises and you’ll still have the possibility of being in a bad situation price wise.

2. Increasing your prices is not so noticeable. Over time as you gain experience and become a better designer you will most likely want to raise your prices. With a set pricing plan these increase can be pretty obvious to customers and potential customers, but with price quotes it is not nearly so noticeable.

3. Allows you to overprice jobs that are not a good fit. From time-to-time you’ll get some potential projects that really aren’t the best fit for you. With price quotes you can simply quote a job higher than you normally would. In most cases, the customer will wind up going with another designer, but if they do choose you, at least you’ll make more off of the job than you would have otherwise.

4. You can get a foot in the door with a potential customer. When providing price quotes there is a bit more selling involved. If you website displays set prices, either a customer wants that price or they don’t. With price quotes you may get a better chance to talk to potential customers and sell them on your service.

Conclusion

Most designers prefer using price quotes rather than set prices because it allows them to treat each job individually, and since no two jobs are the same, this is important to a lot of designers. Of those who offer set pricing packages, most are lower-priced designers that tend to work on less complicated projects. As you move into bigger and more complex projects, set prices become less feasible.

What are your thoughts on pricing? Which strategy do you use, and why?

When pricing your design services it can be difficult to determine what is an appropriate and fair price. The resulting price should be influenced by a number of different factors. Unfortunately, many times it is just guess work from the designer.

Here are 12 factors that should influence how much you charge for your services:

1. The Time It Will Take

An obvious factor is the amount of time that a specific project will require from you. Some designers have an hourly rate that they attempt to get with each of their projects. Whether you have an set hourly rate or not, you need to consider how much time you expect a project to take and how much you would like to earn for that amount of time.

2. Your Availability

Are you currently overloaded with work? If so, why not price a project a bit higher than you normally would? If the potential customer is willing to pay the price you will be well-compensated for your efforts. If they’re not interested in that price, you’re still busy with your other work so it is no big loss.

On the other hand, if you are starving for work, why not consider making a small price cut if it will help you to get some work? Of course you’ll still want to be sure that you’re getting enough to make it worth your time.

3. Opportunity Cost

If you don’t take the job, what else could you be doing with your time? Don’t only consider how much you will be making for a particular job. You need to also understand what your other options would be. Maybe you know you can only charge X dollars per hour for a specific type of service, but for doing something different you can earn considerably more.

4. Potential for Future Work

Sometimes you make get the opportunity to take a job that has potential to lead to ongoing work that you would like to have. In this case there is more incentive for you to give a very competitive price. Sometimes getting your foot in the door by doing a small amount of work for less than you would like will lead to bigger and better things.

5. History with a Client

Have you worked for this particular client before? If so, what was your experience? Some clients you would love to keep and you may be willing to be more flexible with your pricing. Others you will be anxious to get rid of and you may want to inflate your prices a bit.

6. Quality of Your Work

How does the level of your work compare to other designers? Obviously your clients will have a number of different options when choosing a designer. Your prices should reflect the quality of your work in comparison with your competition. Try not to overprice yourself, and certainly don’t under price yourself.

7. Costs Involved for You

Most jobs will typically only involve your time, but some may require additional costs for software, photos, scripts, etc. Always try to find any possible expenses that could arise when you are pricing a job and make an effort to pass these expenses on to the customer.

8. Opportunity for Growth

Some jobs will present challenges and opportunities for you to improve your skills and your experience. If you are interested in learning a new aspect of design, you may want to seek out projects that will provide those opportunities and price your services to be very competitive. Of course, if the job is a learning experience for you, you should communicate this with the client so they understand the situation and so they do not assume that you are an expert in this area.

9. Experience

In comparison with your competition, what is your experience? Experienced designers are usually able to charge considerably more because of their years of experience and the improved skills that have been developed as a result.

On the other hand, do you have a lack of experience that you would like to improve? If so, consider pricing your services on the low end.

10. Timeline

Will you be under a sever time crunch? If so, you should be able to charge more due to the increased pressure of the time demand. Those who expect a quick turnaround and need something right away will often be willing to pay more for the work.

11. Skills Needed for the Project

Basic HTML and CSS coding skills will not demand as much money as more advanced coding skills used in development of dynamic websites. Additionally, advanced graphic design skills can also warrant a higher price. Take into consideration the skills that are needed to complete the project and how much those skills are worth.

12. Is Outsourcing Needed?

Some projects and designers will require outsourcing part of the work to get the job done. If this is the case you need to know how much you will have to pay someone else. Outsourcing can be one more headache in the pricing decision.

What Other Factors Do You Use for Pricing Your Services?

If there are other factors that you consider, please mention them in the comments and how they affect your pricing.