Whether you work for an agency or are a freelancer, getting your pricing right can be a challenge, we explain how should you price design and creativity.
How to Price Design and Creativity
You’re speaking to a lead about a logo for their business. The conversation is going well, and they’re interested in what you do.
All of a sudden, they ask the question: ‘How much do you charge for a logo?’
How do you respond? Do you have a set price in place? Do you charge by the hour or for the project?
Whether you work for an agency or are a freelancer, getting your pricing right can be a challenge. We recently watched an informative video by Chris Do from The Futur, which inspired us to create this article to share what we learned. As well as our summary of the video and the key takeaways to consider.
How much do you charge for a logo?
Chris asked this of the delegates at the start of the video. Not many people were keen to respond, but the prices that came through varied significantly. Someone charges $1,500 for a logo design package. Someone charges $500. Another person charges $20,000 for just a logo.
After getting everyone’s answers, Chris advised that The Futur charges between $15k to $30k for a logo, $20k to $50k for strategy, as well as extra for additional applications such as business cards and letterheads.
Why the difference between costs? The Futur doesn’t charge a set rate for logo design. Instead, the cost depends on one critical criterion- the value to the business.
How much is your logo worth to the business?
Conversely, a large international corporation like Nike, McDonald’s, or Shell will place massive value on its logo. This is what sets them apart from their competitors and customers people that what they are buying is of exceptional quality.
Take Nike as an example. A plain black t-shirt may cost someone $10. Add the Nike Swoosh, and they’re happy to pay 40 dollars for the exact same shirt.
What does this mean for your business? It means you should price for the client and not the job. What is the value that your work will bring to them?
How can you tell what value your work will provide? You need to understand your prospective client’s business to determine value. What do they sell? What marketing channels do they use? How many countries do they operate in?
If your logo helps the business grow its revenue by $12 million, then you should be paid accordingly.
A million-dollar logo
Paul Rand was a famous American graphic designer who created logos companies including IBM, UPS, and Yale University. In his heyday, he charged a million dollars for a logo.
He famously said that it would sometimes take him a year to create the right logo; sometimes, it would take him two weeks. Nonetheless, he still charged the same as it was the value the logo held to the business that was the key factor.
What would Paul Rand charge a small organization that would place less value on a logo? Definitely not a million dollars.
Chris joked that Rand would probably be happy to do it for a sandwich.
Clients don’t choose the best option; they choose the least risky option
A logo can make or break a brand. Take the Gap. The clothing brand changed its logo in 2010, only to abandon it after a week because customers hated it so much.
When clients are looking for a company to work with, they want to work with someone who offers the least risk. Think about why clients ask to see your portfolio and customer testimonials before deciding to work with you – they want to make sure you are dependable and low-risk.
A well-crafted, high-quality logo reduces risk to the business. It decreases the chances that the logo will look wrong in different resolutions or that customers will complain about the new design
Businesses are willing to pay more to work with someone who is a safe pair of hands.
Don’t price by the hour
So, how you should price design and creativity is the real question. Many of us price by the hour when we’re starting out in the world of creative design. This is because this rate is simple to calculate – after all, you’re selling your time for money.
Chris advises that this is a bad idea.
If you work fewer hours, you shouldn’t be charged less. You’re effectively being punished for being good at your job.
Business people value time as a commodity, and you shouldn’t be penalized for saving them time. For example, a business could hire an intern fresh out of school and charge them a couple of hundred dollars to develop a logo. It’s a cheap way of doing it, but the business will waste time going back and forth making amendments.
Think of Picasso and his famous napkin. He was having a drink in a bar when a fan asked him for a drawing. So, Picasso scribbled something on a napkin and asked for a lot of money in exchange. When the stunned fan asked why he wanted so much for something drawn in two minutes, Picasso advised that the drawing had taken him a lifetime.
The skills and experience you have learned over the years are what is saving the business’ time.
Chris ended with the following quote: “You sell what you can do; I sell what the world can do.”
When pricing your project, take into consideration what value it will bring to the company and the advantages they will see as a result.
The great news is that anyone can do this. You don’t have to be working for an award-winning agency to shift your prices in line with the value your work will bring.
Be confident and price your work according to its value to the customer, not the cost to you. We hope this article has been useful and has answered how should you price design and creativity.