Up until recently, I’ve been in a sort of silent struggle with the cost and pricing of my work. From products to client services, I’ve always been on edge about what to charge, how to charge, and when to charge. Lately, I’ve decided to quit worrying about it and adopt some general “rules” for pricing my work and what is factored into each rule.
The first and most important factor, at least as I’ve identified, is prior knowledge. Meaning, in order to complete the task that you’re being paid for, how much prior knowledge or experience do you have to have to say “I can do that.” The answer to this question helps me define a price spread for a given piece of work. If I have a lot of prior experience, or, I’ve done it a handful of times, generally my price will be higher.
Something I’d call a “confidence cost.” When my confidence level is high on a given task, I charge more to compensate myself for prior knowledge. Because I’ve taken the time to learn how to complete that task and do it well, it seems fitting to reward myself for putting in the time to arrive at such a future.
On the flipside of this would be tasks where my confidence level is low to medium. Usually this is for things that I know I can figure out if put to task, but know that I’ll need to dedicate some time to studying or practicing the thing before I complete it. In the situations, as you might have guessed, the price for that work is lowered.
This is one that I’ve mistakenly let fall by the wayside in the past. Turnaround time is simply the amount of time within which a client expects you to produce a valuable result. I used to promise ridiculous turnaround times: partially in an effort to “impress” my clients (big fucking mistake) and also because I was unexperienced (a given).
The fix, then, is to consider the timeline for the work (the amount of time the client would like the task to take) and the realistic amount of time you think it would take you to complete the task (keep in mind the prior knowledge factor outlined above).
If a client says “I need this by the end of the week,” then, given my prior knowledge, the price will go up. Some might refer to this as a “rush” cost. Whatever your fancy. If the timeline for the project is extended over a much longer window, then the price may go down if I know that I’ll be able to procrastinate here and there or put gaps in between the days I actually work on the project.
This is new, but something I’m experimenting with. Despite what some may think, there is an unspoken (if you’re professional, at least) disregard for Pain in the Ass clients. You don’t have to be a designer or a developer to experience this. P.I.T.A people are everywhere and learning to deal with them can be a rite of passage (of sorts) into business.
Either way, the idea here is simple: if I know I’m going to have to hold your hand through certain tasks or you’re going to email or call me every 20 minutes, I factor in a P.I.T.A cost. It’s usually not enough to matter, but more so, a fun way to pat myself on the back for putting up with a less-than-favorable client.
Budget & Benevolence
This one isn’t good for business (in the sense of collecting money), but something I pride myself on. I don’t mention this to clients, but in some cases, I offer a lower price based on the benevolence – or good nature – of the client. I tend to do this for people who are well-meaning, just starting out in business, or have a brilliant idea but lack the serious funds to get it off the ground. This type of pricing is used sparingly, but in places where I know if they knew I did it, the client would be incredibly thankful.
Pricing is a beast. It’s incredibly difficult to pin down what to charge someone for a piece of work and I truly believe that it comes down to the individual. Pricing calculators, advice columns, etc. are an “if you have to” way to price your work. Instead of this, take the time to consider what works for you and only you. Sometimes this will line up with other people.
More than anything, never let a client or customer back you into a corner on how you price your work. Be vigilant and honest about how you make your money and don’t be afraid to buck the status quo if it means running a better business (and creating a better product) for your customers.