You need to to raise your prices if you want better work.
Sounds strange doesn’t it? The idea that if you raise your prices you'll get better graphic design work. It kind of goes agains the whole "undercut your competition" idea that is predominant in most industries. But when it comes to graphic design, charging more means better work for you.
I first covered this topic in a blog post titled It's Time To Raise Your Design Rates. In this episode of my graphic design podcast Resourceful Designer, I expand on the topic and tell you how I first discovered the connection between higher prices and better work and I explain how if you raise your prices you'll be better off as well. Make sure you listen to the podcast for the full story.
Pros and Cons if you raise your prices
Let's start off with the cons since there really aren't that many.
- Con - Harder to land work.
- Con - May loose clients
That's about it. These cons may be areas to concern yourself with but they are the only two cons, and chances are you won't have to worry about them. So let's move on to the pros.
- Pro - More money for less work
- Pro - Higher end clients with bigger budgets
- Pro - Higher perceived value for your work
- Pro - Clients who can afford your higher prices will probably have more work for you as well
- Pro - You will be taken more seriously as a designer
- Pro - The ability to compete with other high priced designers
- Pro - More interesting projects to work on
- Pro - Less one time clients and more recurring clients
As you can see, there are way more pros than there are cons, and I only listed some of the pros. As for cons, I Googled it and those were the only two I found.
The fact is, after your raise your prices you will be in a better position to attract higher end clients with bigger budgets and recurring work. It all comes down to perceived value and people taking you seriously. A large corporation looking to rebrand will have more confidence in a graphic designer that changes them $8,000 than one that charges them $800. It's perceived value. Both designers may have identical skills, but the higher priced designer will be taken more seriously.
It's just like layers. Would you prefer have a high priced attorney represent you or the appointed public defender? The high priced attorney of course. Why? Because of the perceived value. The public defender may be just as competent as the high priced attorney but he/she will never be taken as seriously as the high priced layer. The same theory applies to graphic designer.
Do pricing strategies matter?
No. It doesn’t matter if you charge by the hour, the project, or by value. If you raise your prices you will project an image of having more value to your clients. And if it looks like you offer more value for your clients you will attract bigger and better clients.
Why do you think companies like Pepsi Cola pay so much when they create a new brand? It's not because the designers or agencies they hire spend tens of thousands of hours on the project. Nor is it because the designers or agencies are more talented and more creative than you are. It's because the designers or agencies have created a higher perceived value for themselves that make large companies trust them more and take them more seriously and in return large companies like Pepsi Cola are willing to pay a premium price for them.
You can accomplish this as well. Maybe not land a client like Pepsi Cola, although never say never. But you could land some very lucrative accounts and get the ball rolling. Because once you land one large client more tend to follow suit.
Do you tell your clients when you raise your prices?
This is entirely up to you. The few times I've raised my own prices I didn't tell my clients and they didn't question it when I sent them an invoice billed at my new higher rate. People are used to prices going up and wont be as surprised by an increase as you think they will. Now if you feel this is a little back handed then go ahead and inform your clients when you raise your prices. Chances are you wont hear anything negative from them. And if you do end up loosing a client because of the increase, they were not loyal clients to begin with and you are better off without them.
What do you think?
When was the last time you raised your prices? How did it work out for you. Let me know in the comments section for this episode.
Questions of the Week
I have another Question Of The Week to answer. If you would like me to answer your question in a future episode please visit my feedback page.
This week’s question comes from Norman,
Hi Mark,
Hey Mark I'm loving the podcast since my discovering it a few weeks ago. I've learn a ton! My question for you is how did you find/get your first leads and clients, aside from the obvious strategy of working within your current social group or doing work for family/friends, but the first time you had your eyes set on a client that you wanted to work with and how did you go about approaching them? Thanks a ton Mark for all the knowledge and help!
To find out what I told Norman you’ll have to listen to the podcast. But I'll give you a hint. In my answer I refer to my blog post on attracting new clients.
Resource of the week is HostGator
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I want to help you.
Running a graphic design or web design business all by yourself isn't easy. If there are any struggles you face running your design business please reach out to me. I'll do my best to help you by addressing your issues in a future blog post or podcast episode here at Resourceful Designer. You can reach me at feedback@resourcefuldesigner.com