This article was contributed by Ian Vadas.
It’s a vicious cycle.
As freelance designers, we all undercharge. We want to charge more, but here’s the dilemma: We’re afraid if we raise our prices we’ll scare away clients.
So we keep our prices low and we miss out on lost revenue.
But that’s just a part of the problem. Because it creates a vicious cycle. To make enough, we have to work to the point of exhaustion.
We take on any work that comes our way—working at capacity or near capacity—but instead of getting ahead, we end up on this treadmill running in place.
Being underpaid is bad enough, but also being overworked on top of that is just plain demoralizing.
That’s why pricing is so important (for your health and the health of your business).
My challenge to you is to raise your prices. So you can stop that vicious cycle.
Today I’m going to show you a simple technique from my new course on pricing (40% off for Just Creative readers) for getting paid more without scaring away potential clients.
Any designer can easily apply it.
Even if you’re not a “natural salesman”.
Even if (like me) you are an introvert who hates writing proposals.
Even if up until now, you’ve avoided talking money with your prospects like it was some kind of contagious disease.
This technique is for you, my friend.
(I also have a special FREE bonus to help you even further. Make sure you read all the way to the end to get it.)
Let’s jump into the details.
One pricing mistake almost every designer makes
Let’s say you’ve been approached to design a website or a new brand identity or something. You talk with the prospect or email back and forth to learn about their needs and once that is done, you give them a price.
That’s where the mistake happens.
Here’s the problem with offering only one price.
When you offer only one price, your prospect only has 2 choices: yes, or no.
If they don’t like that price, they are gone and off to the next vendor to find another price.
Offering just one price also makes it really easy for the prospect to compare your website or brand identity price to someone else’s price down the street.
When that happens, you’re now competing head to head with their prices and this creates the dreaded race to the bottom that puts pressure on you to keep lowering your prices more and more.
There’s a better way to do it.
How to stop your prospect from shopping around
Ever have a prospect ask you for a quote and then just disappear? Well, what happened is what I mentioned above. They were shopping around to find a better price. Or, they were trying to see if the price someone else quoted them was a good one or not.
So here’s how you short circuit that process and give yourself the best opportunity to land the project.
Instead of putting them to a yes-no question, you can give yourself more chances to get to a “yes” answer by offering additional choices or packages.
Humans love choices and when you give them the right amount of options, they automatically begin to compare them against one another.
Your prospect is comparing your price to your competitor’s down the street.
With package choices, now they are comparing your packages to each other instead of to your competition.
They are looking at the benefits of each package and since you have more than one price they can choose, you’ve got more swings at the plate to get to that “yes” answer.
So how many packages should you offer?
Using “Goldilocks Pricing” to raise your prices
Goldilocks Pricing is a Good-Better-Best pricing tactic. Not too much, not too little, just right.
The great thing about offering three packages like this is it gives you a chance to present higher prices, without scaring away clients.
So what do those packages look like?
Let’s say a prospect has come to you looking for a site redesign.
After talking to them about the details of the project, you might realize they need a particular scope of work. Usually, this will be your middle or “Better” package.
However, instead of just offering them this package, you’ll also provide a lower priced package—the “Good” package. Which is a stripped down version of the “Better” package.
And then you’ll offer a “Best” package. This package contains everything you might include if the client came to you and said “Money is no object. Give me the best.”
No prospect ever says anything like that, but this is another reason you offer it: They might not have thought of these extra services that could benefit their business. So think of this offer as an actual benefit to them, because it is.
You’ve now created a wonderful menu for your prospect to choose from, and they get to pick an option that works for them.
If your middle package is too high, you’ve got the lower package.
…and occasionally, your “Best” package will get picked and you’ll get the extra revenue that comes with it.
But if you never include that premium package, your prospect will never have the chance to say yes to it.
And without the lower package, you might lose a prospect who is scared off by your higher prices.
Does this work for smaller projects?
I know what you are thinking. You’re saying, “Well this could work for big web design projects, but what if I work on small print projects? How do I make packages out of that?”
The way to do it is to break things down into smaller components. Divide up all the different components and then package things back up in a way that makes sense.
So let say you have a print project.
You might already be offering something of value that you are not getting paid for.
Maybe it’s vendor management.
So one package might be brochure design, and another might be brochure design plus vendor management. And then the next package is the brochure, plus vendor management and something else.
You might have to dig a bit, but there is always something more you can offer.
Will the prospect be annoyed I’m offering more than they’ve asked for?
We often feel obligated to only quote what the client has asked for. But as long as what you are offering them makes sense and is related to the project, most clients and prospects will be appreciative.
The other day I went to a car wash. I went to get my car washed but did they sell me just a car wash? Nope. They gave me three options.
One option was just the interior. The other option was the interior and exterior. And the third option was interior, exterior plus a coat of wax.
I chose the middle option. Was I mad they offered to wax my car? Certainly not. It wasn’t right for me but for someone else will take them up on that offer.
This tactic scales no matter what size projects you work on as long as you are willing to get creative with how you package what you are selling.
If a car wash can do it, you can do it too.
My design proposal template
If you want to get started presenting options to your clients and prospects, I’ve got a quick way for you to do it. I’ve included a special bonus download for you that includes the 3 option proposal template I use in my design business.
I regularly use this proposal to sell $5K+ proposals and I’ve included a video walk-through to explain how I set it up.
Check it out and start earning more!