Pricing Structures, or "How much should I charge for design/development?"

Download Episode
PublishedMar 19th 2019
Episode Tags:

Alex: 00:09 The Overlap is a show about the intersection of design and Front End development. I'm Alex, a Front End Developer

Elle: 00:16 And I'm Elle, a designer. On the show we share our experience with each other about design and coding.

Alex: 00:20 We don't know everything, but we share what we do know and laugh about what we don't,

Elle: 00:25 Which could fill a truck.

Alex: 00:27 We measure in trucks.

Elle: 00:30 So, uh, what are we talking about today?

Alex: 00:32 So today we're going to be discussing a few basic basic pricing structures for both new and experienced freelancers. Maybe you're picking up a side Gig and you need to know how to give an estimate for that project. Maybe you've been freelancing for a while and you want to make sure that you're charging appropriately or you want to check out a new pricing structure. We're gonna run through a quick overview of pricing methods to help you decide how to charge for your work.

Elle: 00:55 Clients don't often understand design. It's a very esoteric thing to them. So it's up to you to explain your value and your expertise to them so that they see the value you bring to their business. Asking the right questions at the beginning of a project can help position you as an expert, as a person who really knows what they're talking about and it can help you gain understanding of the problem and it gives you the opportunity to establish trust with your client. Clients feel safer when they make an investment in design with someone who seems like they know what they're doing. Right?

Alex: 01:29 Yeah, absolutely. And that's with development too. I mean with design, you get a lot of people who kind of think that you just need to draw a picture and you're going to be done in an hour. With development it's just, you know, you just make a website or you just code an app. How hard could it be?

Elle: 01:44 Yeah. Yeah. Clients feel a lot better about working with you when they feel like you understand their problem, you understand their industry and you understand what their business goals are.

Alex: 01:57 Right? I mean, we have a whole episode on that, um, called design briefs and it gets all into the questions that you would ask upfront for a project so that you really know where the project's going and your client feels a lot better about it. So check out that design briefs episode to find out more about it.

Elle: 02:14 Today we're just going to focus on how to give an estimate, how to structure your pricing and how to manage expectations with your clients. So there's a couple of common pricing structures, a lot of designers and developers price hourly, some price by project or like a flat fee. Some agencies and designers use value based pricing, which ties the business value of what you make to how much it costs the business. That business for the service. There's package and tiered pricing, which is a, it's sort of a newer thing that I think with like the app era where you can get different tiers of a product.

Alex: 02:52 It's like a silver, bronze and gold sort of thing?

Elle: 02:55 Yeah, yeah. Like how you can have a "pro" version of something. So a lot of designers will have packages or tiers. And retainer pricing. A lot of designers will charge hourly and a lot of businesses sort of say, "well what's your hourly?" And that sort of ties how much money you can make to how much time is in a day.

Alex: 03:16 I feel like it also makes clients expect that a thing will be done in a set number of hours or if you stumble or hit roadblocks, those hours start to add up and it can get kind of dicey.

Elle: 03:28 Yeah, it can cause some surprises when you send an invoice. So when you charge hourly, you're compensated for the actual time that you work. If the client's scope creeps or the project takes longer or you're, you're generally compensated for that additional time depending on how you write your contract, you can make a client feel a little more comfortable by giving a "not to exceed" number, which means you say like "my hourly is $75 an hour and the project is not to exceed 20 hours."

Alex: 03:52 Right.

Elle: 03:53 So it gives you sort of a milestone to check in and say, hey, things have changed. We've sort of run into some roadblocks here. I've hit 20 hours, let's renegotiate what it's going to take to bring the project to the finish line.

Alex: 04:05 I think that communication is super important. With something like hourly especially.

Elle: 04:09 Oh for sure. For sure.

Alex: 04:12 If you can effectively communicate and kind of check-in on the regular, an announcement like that isn't going to be as annoying to your client. If you're just all of a sudden out of the blue, two weeks in and saying, "Hey, I'm going way over" they're not going to be happy.

Elle: 04:26 Money is a very tricky thing and I think it's a very emotional thing for a lot of people and especially in business. I think it can be difficult to navigate that because you don't know how, what their emotional ties are to money at all. When you charge based on the project, like a project rate or a flat fee, you're tying the price of the project to the clients end results. So you're saying, I am going to design a wedding invitation for you and it is going to cost $1,300 you're going to get the invitation, the reply card, the envelopes, everything delivered to you. This is the price. The end. Whether that wedding invitation takes you a day or four days is of no consequence to them. They know that they're going to pay x amount of dollars and they get a thing and it's almost like when you go to a store, you say, I'm going to give you $20 and you're going to give me this item. Whatever it is.

Alex: 05:21 You're not paying the sandwich guy by the hour. You're paying that money for the sandwich. Not so much the time that he put into it.

Elle: 05:30 Right. That's exactly right. So this establishes, it can establish a little bit more trust with your clients so they know exactly what they're getting and there's no surprises when their, when your invoice comes in, you're not going to have to field an angry telephone call like "I wasn't expecting this!"

Alex: 05:45 I think communication is also important here, but kind of more up front. Saying up front exactly what the project entails, even more specifically than hourly because with hourly at least you would be able to charge additional hours if the client said, "can you also do this, this and this?"

Elle: 06:05 Scope creep, yup.

Alex: 06:06 Um, yeah, so with, with that, with hourly, if you do have scope-creep, which is just basically, um, understood limits of the project kind of increasing and getting bigger and bigger and bigger. With that, with hourly, you at least can say, all right, "I'm going to keep billing you at this hourly rate. Are you okay with that?" Um, with the flat fee it gets to be a little dicey because you are still charging them $1,300 and now you have to do more work. So that's where you really have to say up front "That is not part of this project."

Elle: 06:39 Right. Setting clear boundaries. And we can talk more about contract writing and phasing out projects like that in another episode. But this is just sort of like philosophically how to figure out how much something costs that isn't tangible. Unfortunately, design is not a tangible thing.

Alex: 06:57 Or at least the, the value in that design, it's tough for them to see all that goes into it.

Elle: 07:04 Charging hourly forces you to focus on the time spent versus the actual value of what you've made. So as you progress in your career, presumably you get better at your job and you accomplish tasks faster. But in an hourly pricing structure, it means you're getting paid less. Does that make sense? Like why should you get paid less for doing something really fast, really efficient and really well? So it sort of puts a cap on your earning potential and just because something took you three hours or two hours doesn't invalidate the value that that thing has. Right? So a website can be worth, you know, X amount of dollars to a client, but if it took you three hours, it doesn't change the fact that that website has that impact on their business. Right?

Alex: 07:52 Right. Though the website can bring in thousands and thousands of dollars because of what you put into it, but just because you spent three hours on it... Yeah. And kind of on this, there's a story, I'm not sure if it's true, but there's a story about Pablo Picasso where he's sitting in a cafe in Paris and someone recognizes him and comes up and asks him if he could do just a quick sketch on a napkin. And so he does it and then he goes to hand it back. But before he does, he asks for a good amount of money and she kind of responds, "how can you ask for so much? It only took you a minute to draw this." And he goes, "No, it took me 40 years."

Elle: 08:31 Like, I'm fucking Picasso. I'm a genius. Get the hell outta here. I'm so good at drawing this really quickly because I've worked at it for forty years.

Alex: 08:42 It's the accumulation of knowledge and of skill and of talent. Like you pay a doctor a lot of money, at least in America, you, you pay a doctor a ton of money because of the years they spent in medical school, not because of, you know, the 10 minutes that they spent with you. It's the accumulated knowledge, it's the accumulated skill. And the more that you work in design or development, the more you have of it. If you've been in development for 30 years, you will be much more efficient and you'll come up with a better solution and you'll have already made the mistakes that the guy charging way less than you, but it's only been in it for about a year is going to make. So you need to communicate that value to your clients.

Elle: 09:33 And it's a really tricky thing because it's tied to feelings, it's tied to emotion. So money is tied to emotion, tied to emotion and it's really hard to put words to or to put to measure what might be very valuable to one client may not be very valuable to another. So it depends on their business needs. But it's up to you at the onset of a project to figure out what those business needs.

Alex: 09:57 That's why I recommend only having clients that are robots. Um, you don't have to deal with emotions. None of that gets in the way. Transactions are real clean and tidy. And when the uprising comes, you have a lot of people to vouch for you.

Elle: 10:11 And robot friends.

Alex: 10:11 So tip from The Overlap, you heard it here first.

Elle: 10:20 Robot clients.

Alex: 10:20 Yeah. Robot clients.

Elle: 10:23 So at the other thing to keep in mind is you have something that they don't. You have a skill that you know how to do something that they don't know how to do. Like you go to a doctor to set a bone because you can't do that yourself. People come to designers and developers because they can't do it themselves. They might think that they can, "oh my, my nephew has Photoshop!"

Alex: 10:45 Yeah, that's the phrase, isn't it? They're coming to you for a reason. And um, you might have to either say no or say no, kind of with your pricing to some clients if you can afford it.

Elle: 10:55 I call it the fuck you price.

Alex: 10:58 Well that's more like, I think you're saying more for clients that you just, you can't stand or you just do not want to work with and you'll say, yeah, no, that's a, that's a price for you.

Elle: 11:09 That's going to be a $40,000 logo.

Alex: 11:12 Right. That's the price for you, sir, because you're calling me at midnight and bothering me or whatever. But, but I just mean I'm more to the point of the, you might have to say no to people that are trying to undervalue your work.

Elle: 11:28 Right. And you should absolutely say no to those people.

Alex: 11:31 Right? So when people say, "Well on Fiverr it's $10"

Elle: 11:35 Well then go to Fiverr.

Alex: 11:36 Go to Fiverr and get your Fiverr logo.

Elle: 11:40 That was some other ways to price our projects. It would be value based pricing that ties what you create to the actual revenue that it has, the revenue impact it has on the business, the potential revenue impact it has on a business. This is, this is especially relevant when it comes to ecommerce sites. Like if you can sort of deduce like what their expected revenue would be from a change to their website or a change to their, um, other design elements or their brand. If you could deduce the actual expected revenue impact of that, it means that you can tie the value of what you've made to that expected revenue.

Alex: 12:19 Now can you do that up front only or can you do that on the backend? Because you can definitely put in systems that check the sales and check the differences and check the traffic and you know, all kinds of analytics to see, and then you can get paid off of that maybe. Or is this purely an upfront sort of thing?

Elle: 12:37 I don't know. So I've never done this. I don't know. Like I joked with a client of mine, I work, I've done a few projects for trade and I joked with him when we launched his website and he said, I've already gotten like 10 people make appointments through this website. And I said, "I wish that I put like a 1% royalty in our contract" because like he probably made like five or $6,000 from those, those clients. So I've never done it. I don't, I don't feel comfortable doing it, but, I'm certain that people do.

Alex: 13:14 I think for certain, and I think for certain companies, like you said with ecommerce, I think it's way more useful, to kind of get, it's almost like commission.

Elle: 13:23 Or like royalties.

Alex: 13:25 Yeah. Right, exactly. Yeah. You get kind of a cut.

Elle: 13:29 That's sort of murky and I don't, I don't have a solid understanding of that. Um, I've seen things trending toward package and tiered pricing, so...

Alex: 13:39 Okay, you want to explain that?

Elle: 13:39 Yeah. Yeah. Um, so imagine if you like, this is a, this is one way to estimate projects and I, I've sort of done this before where I've said, okay, for X amount of dollars you get this, this, this and this. Uh, if for x amount more dollars you get this, this, this and this plus this, this, this and this. So it's like a package. Um, and then the other, another pricing structure that I am not familiar with at all would be a retainer pricing. So you say you pay me $500 a month and you get x, it could be hours of work or on call maintenance or whatever it is. I've never done retainer pricing. I don't know if you have?

Alex: 14:16 I haven't, but I've seen it a lot with websites. Um, I used to work for a company that did web sites and the previous web masters, I think you would call them, considering when the old websites were made, they were kind of on a retainer. So yeah, they would get like 30 bucks a month from these different companies and they would do like small updates. It was specifically scoped and they would do these small updates, either updating some text or just making sure it's running and if you can build a stable enough website and then convince the people to put you on a retainer and not bad money, I think it's, it's a nice way to get consistent small amounts of income.

Elle: 14:56 Sure. Yeah. I've never done it. I assume that people do.

Alex: 15:01 Right, it's probably more popular with web or app based things. I actually, yeah, I have a friend who is on retainer, um, because he's made a few I guess you can say web apps for different companies and they've kind of just continually employ him. He just a web developer who only has about like four or so clients, but they pay his bills they have him on retainer and he just continually works for them. He does freelance, but it's just those four companies over and over.

Elle: 15:32 Wow, that's great. Yeah.

Alex: 15:34 So it sounds like a pretty sweet gig. If you can find those kind of companies that can carry you for years.

Elle: 15:39 Things to consider when you're deciding on a price. You can pick different structures. You can charge hourly, you can charge a flat fee, you can charge value based, you can do value based pricing. But how do you figure out how much? So I, when I priced out a project, I consider four things. 1. Who is the client? Do I like them? This is a big one. Do we, do we work well? Yeah.

Alex: 16:00 Is it going to be a nightmare just just communicating with this person or they're going to,

Elle: 16:04 Are they nuts? Um, is it a company or a cause that you believe in? And what are their expectations around costs? Like have they worked with designers before? Have you, have they worked with you before? Like what are their expectations around what design costs? So again, like it's important to ask really good questions up front. One of my clients I really love working with because she's really clear with deadlines. She's really clear with content changes. Nothing is ever last minute or rush. Like she's very thoughtful, very meticulous and when I work with her I know exactly what it's going to take to bring a project to the finish line so it makes it really easy to price out a project.

Alex: 16:45 Yeah, that can be really helpful. Would you say that if they have a lower expectation of design or development pricing for instance, they think that design should be really cheap and they just have a very low expectation that you should lower your prices or what do you think about that?

Elle: 17:01 So it depends on the... like I said that there's a couple of factors to consider. Like it depends on what if... so say they do have low expectations but they think design should be inexpensive, but it's for a nonprofit that you really care about and you care about the cause. Like there's different things to consider. One of the other factors that I think about is creative fulfillment. Like will I like working on this project? Do I have creative freedom or is someone just going to tell me exactly what they need to do because their brand standards are really strict?

Alex: 17:30 Right That can be a big part of whether or not you just enjoy that project or if you just dread working on it.

Elle: 17:36 Right? So that creative freedom could be worth more to you than dollars. So if a client has an expectation that design should be inexpensive, but they just give you free reign, like that's up to, to find that balance. Um, the other thing that I think about is the experience. Like, do I want this in my portfolio? Do I need this kind of work in my portfolio? Is this the direction that I want to be pushing my career in?

Alex: 18:02 That's a good point.

Elle: 18:02 Right? Like, so I, there are, I have a lot of logo work in my book, so when a logo project comes along, I can be a little bit more picky whether or not I want to pick it up. And the other thing to consider is, is this your full time business? Are you a full time freelancer or is this just a side hustle for you? So a lot of my freelance gigs are just as just a side hustle. I work full time so whether or not there's bread on my table isn't contingent upon this freelance work. So it's something to think about when you are pitching a price. And the other thing that you should consider, like we talked about is how the work will impact their business. If this is a new business and they don't have a website at all, they have no web presence whatsoever, they will be relatively unknown without your help, without your solution. So it's something to think about when you're putting together a price and it's, these things aren't really measurable. They're very connected to how you feel.

Alex: 18:55 Yeah. So unfortunately the, the overarching answer here is it depends.

Elle: 19:00 Yup.

Alex: 19:02 There's no online calculator that you plug in as few things and as soon as spit out thousand dollars you, you need to take a lot of things into consideration. Well not a lot. I think your 4 helped to kind of narrow down what you need to take into consideration.

Elle: 19:20 These are just like the s subjective things, the objective things that to consider are what's industry standard for your area, what are other designers charging, what are other developers charging? Could someone go to an agency and you know, get a better deal. You know, it's so, it depends. It depends on what you're doing, what you're offering, what the client expects and what the industry standards for your area are.

Alex: 19:46 Yeah. And then on top of that, the full project, like how long is this going to take you? Have you done a project like this before, right? If they're asking you to develop a site in a framework that you've never used, that's going to be a lot more work for you and you should probably put that into the scope of your estimate.

Elle: 20:10 Sure, yeah.

Alex: 20:11 So the, the more new things or the more time it's going to take you, you want to account for that. Um, if they're asking for just feature after feature, after feature or with design, just, you know, so many different pieces. They want brochures, they want business cards. They want just, you know, a suite of things. You want to account for that. So there's also just the, what are you making?

Elle: 20:36 What are you making?

Alex: 20:37 What's the deliverable? What is it? What's the deliverable? People love that word.

Elle: 20:44 The other word I like for that is artifact.

Alex: 20:47 Artifact. That's when you send it to museums.

Elle: 20:49 Yes, yes. If you're making a dinosaur bone, yeah.

Alex: 20:52 If you send it by ups, it's a deliverable. But if you transport it to a museum, it's an artifact. That's, that's a overlap vocabulary. You're welcome.

Elle: 21:02 So, uh, sharing estimates with your clients. I like to, I use an accounting software that allows me to provide estimates and they look a lot like my invoices. So a lot of times I can just turn an estimate into an invoice and say like, here's the price we agreed upon. Now pay me. Um, so sometimes without knowing a lot of information, without knowing the impact of the business, what the client's needs are, what the client sets expectations are. Sometimes I'll ballpark a project, I'll say, well that can cost anywhere between five and $15,000. You know, and at the, it sparks the conversation to say like, what problem are we solving? You can, uh, like I've talked about with packages, you can do tiers and you can say you get these three deliverables in this package, five, these five deliverables in this package or these deliverables in this package so you can price it out that way. Or a la carte. Sometimes when I do a print design for events, I'll say, here are all of the things that I've ever done for events before. And here's how much each of them cost to design and an estimate for production. So this one client that I really like working with, she can just pick and choose which parts she needs for her events. So it makes it really easy for her to budget and decide what she needs me to do or not do.

Alex: 22:16 And so that client enjoys that pricing model and can keep coming back to you for that?

Elle: 22:20 Yeah. And she like, it just makes sense for her. She's not the person who makes the decisions. Like she's, she doesn't write the checks. So it gives her a way to position something to somebody else and say like, here's how much all of these different things cost. What parts do we want?

Alex: 22:35 Yeah. And I think one thing that we haven't touched on a lot of the things that we're looking at here are like how to make it good for you. How to make sure that you get what you need and that you are not cheated out of money or whatever. But I think so much can be said about making clients enjoy the process and not making it painful or awkward for them. And then kind of matching up a pricing structure to a client so that, I mean, you don't just have them once so that you get that repeat client and you're able to continue a relationship with someone you want to work with that they are enjoyable. And that's just money that continues over and over and over. That's so much more valuable in the long run than squeezing a couple hundred dollars out of some plan that they didn't like.

Elle: 23:24 Right. And I think it put another way: You want them to like working with you. Right. Cause I, I'm, I'm realizing this in my old age, people like to work with people that they like. Yeah,

Alex: 23:36 No, that's, I mean it's all about who you know. That's not just, oh, you know a lot of people, but they actually like you.

Elle: 23:43 Yes. Yes. It's important. Put yourself in their shoes. They're making an investment. They're spending a lot of money on something that they don't really understand. Are you nice to work with?

Alex: 23:52 Right. So much of it goes back to just that Dale Carnegie Book of "How to Win Friends and Influence People". It's just take a book where the big thing is just "be nice to people, make them like you and good things will happen".

Elle: 24:05 It's really hard for me to do that. Not Likable.

Alex: 24:11 Lies. Podcasting personality.

Elle: 24:16 When you provide estimates, it also leads into the contract. So before you start a job, get a deposit. I've been burned on so many projects. Get a deposit and put in a kill fee,

Alex: 24:31 Kill fee? Can you break that out a little bit?

Elle: 24:32 Yeah. So if you work on a project, maybe 30, 40% done and they say, Oh, you know, we're going to cancel this. We're not moving forward with this. You still need to get paid. Like you still need, your business still needs to make money.

Alex: 24:45 Right, You still did the work.

Elle: 24:47 You still did a lot of the work whether they use it or not, like they got a thing. So I have in the past put about a 30% kill fee. So if you cancel this project, you're paying 30% of the total on top of, on top of the 30 or 40% deposit that you've given me because it makes you seem serious. It makes you seem like not a hobbyist, like just some kid with Photoshop, you know what I mean?

Alex: 25:11 Now do you think this might scare away some less serious people?

Elle: 25:16 Do you really want to work with those people?

Alex: 25:19 Right. That's exactly right.

Elle: 25:21 But you have to balance that with like, okay, well you can't scare away every client.

Alex: 25:28 I think a lot of our listeners are going to be kind of in the boat. I just want ANYONE, because if this is your first freelance gig or you just haven't had one in a while. You need the money. That definitely changes your estimates, I feel like.

Elle: 25:48 Sure. Oh, for sure. But yeah, it's important to have a contract so that a client knows exactly what they're going to get. Exactly what you will do. It also outlines who pays for stuff. If you buy a font for a project, should you have to pay for that or should the client pay for that? It depends. Are you, are you paying for hosting? And it's important to have those conversations up front so there's no surprises. Again, communication, constant communication is totally essential to the success of this project and your business. So it's really, it's also really important not to undervalue your work because how you position what design costs, because it's not a tangible thing because it's not a set of tires or a sandwich. How you position, how much things cost, sets, expectations for them when they work with other designers or other developers.

Alex: 26:35 This is tough for people to kind of understand cause I know personally the feeling of, Ooh, I don't want to seem greedy. If I ask for this amount of money, I'll just ask for a little bit lower and I'll be more comfortable in this kind of a situation. And you feel like you don't want to make that client upset by asking for some offensive amount of money so you tend to undervalue your work.

Elle: 27:02 Sure. There's a great story about Steve Jobs and Paul Rand. Um, when Steve Jobs left apple the first time, uh, he started a company called NEXT and he had Paul rand designed the logo and he said, I want two or three options. Steve Jobs said I want two or three options. And Paul Rand said, no. He said, I will design you one option and you will pay me for the privilege of getting this one logo out of me because he's an expert. He was at the top of his field. He was the best at what he did. So there was no need for him to provide options. You know, I certainly can't. I'm not that at that point in my career, I certainly do not have the cajones to ask for $100,000 for a logo. But you know, Paul Rand have at it. So it is, it is awkward and it is tricky and especially if you feel inexperienced, it is a very tricky emotional thing to talk about money and how much things cost.

Alex: 27:57 But, but I understand that it is incredibly important to value yourself appropriately because it does affect other people. It affects the entire industry. And, and both of these industries, design and development are, whether or not it's true, they are getting saturated by the day, um, with, you know, Photoshop just being so easily available. Um, people think that they are immediately graphic designers with things like Squarespace. Um, people are web developers, right? So it's, it's a field that you've, you, you don't want to undercut any more than it already is just by the barrage of people that are coming into it day after day. I totally support everyone coming into it. If you're new to it, don't take this as me saying that you are not welcome, but make sure that you are giving it the...

Elle: 28:50 GET OUT!

Alex: 28:51 NOT YOU!

Alex: 28:53 Make sure you are valuing it the way it deserves to be valued because there are people that spend years and years perfecting the craft and they deserve to be paid well for it.

Elle: 29:04 Sure. Oh yeah. Plus, like if you're setting these unsustainably low prices, your clients are going to think that that's what it costs and then you'll be in a cycle of not getting paid well enough for your work. And then, I mean, I know like business consultant, I'm know Mckinsey or anything, but I don't think that's a good way to make money or run a successful business.

Alex: 29:22 Right. I mean, if you can't even increase rates from 10 bucks a logo, that's going to be a, it's going to be tough.

Elle: 29:29 Yeah. And if you're making logos on Fiverr for $5 a piece, like how many of those logos do you need to make in a year to make a sustainable salary? A million?

Alex: 29:39 As a little side hustle?. Right. Exactly.

Elle: 29:41 So I need a million logos.

Alex: 29:43 Although a million times $5 that might be...

Elle: 29:48 That's Five Million dollars.

Alex: 29:48 That might be pretty impressive, you know, on second thought, we should all go make 1,000,000 Fiverr or logos. That sounds like the way to go.

Elle: 29:56 Work for free is also a little dicey. There's a lot of things to consider there too. I've, I do work for free all the time, but um, I design wedding invitations for my closest friends. Would I do that for someone that I don't know? Probably not.

Alex: 30:10 You designed my wedding invitation!

Elle: 30:12 I did, I designed my own wedding invitations.

Alex: 30:14 What. Some idiots married the both of us. That's the most ridiculous part of this.

Elle: 30:20 I know!

Alex: 30:22 I suckered a lovely woman into it. You did a great job and I'm still very thankful for that. So I guess it pays, that's my payment back to you is love and appreciation.

Elle: 30:34 Well I don't know if I could put a dollar amount on that but I also didn't buy you a wedding gift.

Alex: 30:37 It's like maybe five... oh Yeah, no you weren't allowed to because you, you spent a lot of time designing fantastic invitations. I mean what would you normally charge for that?

Elle: 30:50 A lot.

Alex: 30:50 You want to put like an estimate on that?

Elle: 30:57 It can cost anywhere from $700 - $2000. You like that ballpark?

Alex: 30:57 That would have been the top wedding gift.

Elle: 31:07 That's more meaningful than a toaster, or a blender, or whatever. And I am uniquely positioned to give that to people that I care about. Would I do that for like Joe Schmoe off the street? Probably not. But

Alex: 31:20 I really wish you would have given them to us before the wedding because then we could have like sent them out and use them as the invitation. It's just, I don't know. Giving it to us on the wedding day.

Elle: 31:31 Not helpful. Not helpful.

Alex: 31:31 Not really. So it's just a tip for next time.

Elle: 31:34 I actually just designed a suite of wedding invitations for my friend Chris. Hey Chris.

Alex: 31:34 He doesn't listen to this.

Elle: 31:43 No, he doesn't listen to this. He wouldn't be caught dead.

Alex: 31:47 And if he does, there's no way he made it this deep into the episode.

Elle: 31:51 No, he wouldn't be caught dead. And his fiancé, his wife to be was like "I'm so sorry, this seems really hard, I'm being really annoying." And I'm like "It's fine. This is how it goes." She's like, "Oh my God, thank you so much." Like the fact that I made that easy for her is really meaningful to me. And I told him, you're not getting a card, you're not getting cash, you're not getting fucking towels or whatever the fuck from your registry.

Alex: 32:17 Yeah, and that's your contract with them. That's you coming out and saying "This is what you're getting."

Elle: 32:23 Yeah, you're not getting a fucking sheet set. Egyptian cotton bullshit. This is your present, motherfucker.

Alex: 32:30 Oh my god.

Elle: 32:32 I'm real aggressive about it!

Alex: 32:33 You are really aggressive about it. You're like the Samuel L. Jackson of wedding invitations.

Elle: 32:41 I am!

Alex: 32:41 Which feels redundant. I mean, we all know the man can make a hell of a card.

Elle: 32:46 Cuttin' this out. (She didn't.)

Alex: 32:48 Okay, good.

Elle: 32:48 But um, but yeah, so lots of different ways to approach. There's lots of different ways to approach how to price out of project. You might not use the same pricing structure or the pricing pricing method every time you get a new client or even with the same client, you might choose to do things a little bit differently. There's lots of stuff to consider, but it's really important to just ask the right questions and get an idea of what the goal of the project is and what problem you're solving. And with that you'll have an easier time. Like, it's awkward and uncomfortable to talk about money, but it's just, you know, you provide a service you don't... Peco doesn't say, hey, you know, if you don't mind paying your electric bill, that be great. No!

Alex: 33:26 For all those people outside of Philadelphia. Peco is an energy company.

Elle: 33:30 Sorry, the electric company just shuts your lights off, right? They're not uncomfortable asking for what they're owed. So I think it's important to just be comfortable and confident and you know, understand what you're providing is important to people.

Alex: 33:47 Right. I've also heard, over a period of time, if people aren't saying "no" to your rates, your rates are too low. If you're eventually not getting something going "No, that's too high for me." That's a bit too high for me. You're clearly too low. I mean like if you think about it, you go into a store, you see a whole lot of things and some are a little too high for you, but it's not too high for other people and they still end up selling that product, right? They can always drop that price and put it on sale or whatever and then you can come back and buy it. But if it just, if you are never hearing the word no, try to raise them up. But if you are never hearing the word no, try to raise your rates a little bit and goes to a client says no and then you can always negotiate back down. But there's, there's no rule that says like once they say no, they're gone. Right. That's, that's the negotiation.

Elle: 34:40 That's really interesting. I never really thought about that. Like your rates are too low if nobody ever says no. But like that might be a, an indication of how great you are to work with how good you are at your job. And maybe you don't need to charge more. Like if your bills are paid and you make enough money, like you know who's to say that you're not charging enough? So it's case by case. It really is like person to person.

Alex: 35:00 But I also think that um, being more selective with clients and when you can raise your rates, you can maybe bring on someone to work with you. Like there's all kinds of opportunities that go along with that. If you continue to undercut yourself, you are again undervaluing your work and you are hurting the people in the community around you. So, yeah, I think finding an accurate spot for your rates involves people saying no from time to time.

Elle: 35:27 Sure. And that's okay. There's always more clients out there and it is a negotiation. I think you're fishing in the sea. So many fish episode brought to you by plenty of fish.

Alex: 35:38 And Swedish fish

Elle: 35:42 Is that a dating app still?

Alex: 35:42 I have no idea.

Elle: 35:42 Oh Man. Wonder if that's still out there.

Alex: 35:45 I found my love on OkCupid. So, uh. Shout out.

Elle: 35:48 Okay Stupid.

Alex: 35:50 This is not, this is not okay.

Alex: 35:55 All right, well this has been an episode of The Overlap. Thank you so much for tuning in. I hope you got a lot out of this. If you have any experience with any of the pricing structures, especially the ones that we haven't touched on or, or that we don't have experience with, the tier pricing or the retainer pricing, please hit us up on Twitter. We'd love to hear more about that. I'm on Twitter @mrtrost

Elle: 36:19 And I'm @lovelettersco

Alex: 36:22 We would love to hear more. We can mention it on a later episode. Um, thank you so much for tuning in.

Elle: 36:28 Sure. For more episodes and show notes about anything that we've talked about today. Visit overlap, podcast.com our music is from Aa Alto on free music archive, and, uh, you know, thanks for tuning in.


CSS Grid: The newest layout tool for the web

web development
graphic design

File Organization: Or, "Where'd I put that thing?"

web development
graphic design

What is UX? An Intro to User Experience Design

UX Design
Web Development

Static Site Generators: Gatsby + Hugo + Jekyll = Good Times

Web Development

Typography Basics: Everything you need to know to make great layouts

web development

Creative Briefs: The key to happy clients and teams

graphic design
web development

Focus for Designers and Developers

meta skills
graphic design
web development

Gatsby, Work/Life Balance, and Building Community with Jason Lengstorf

web development

React: Make Excellent Apps and Websites in JavaScript

web development

Pro Print Tips for Developers: RGB vs CMYK, Illustrator vs Indesign, and more!

graphic design

Pricing Structures, or "How much should I charge for design/development?"

graphic design
web development

Coming Soon: March 19th!

graphic design
web development