Why is pricing design so hard?
The creative process is full of unknowns.
For freelance designers — or any creative service business owners — one of the most challenging aspects of business is pricing. We have uncertainty about what price our skills and experience should command. It’s difficult to compare how our prices stack up to others in the industry (because nobody likes talking about their prices). And even if we have all that sorted out, there’s no consensus on what pricing method is easiest to apply and fairest to use.
No matter what pricing method you employ or how much you charge, you need an ability to accurately estimate prices. For most of us, that involves estimating the time a project will take and then multiplying by your rate. Even if you don’t share those calculations with your clients, internally that’s what the process entails.
But this process is flawed. Not because we’re doing anything wrong. Simply because we’re trying to price an unknown quantity.
Creative processes are full of unknowns
Even when you have the tightest, most-detailed project brief and well-researched scope, there are parts of the design process which are out of your control.
Design timeframes are dependent on the speed and quality of client feedback, for example. You can do your best to pre-judge your client’s communication skills and aptitude for useful feedback, but until you go through the process you never know for sure how efficiently it’s going to play out.
During your design discovery, you may realize the initial business goals or user needs were flawed, and instead of spending most of your time exploring design solutions you have to spend it reframing project goals. The success of design, after all, relies on asking the right questions before you can define the answers.
Design is problem-solving. We have methods and repeatable processes that help us arrive at good design solutions, consistently. (This is one thing that separates designers from artists).
But like any problem-solvers, we don’t know for sure if we’ll arrive at the best solution right away, or take many rounds of exploration to find and test it. The more experience we have, the better equipped we are to arrive at that solution quickly. But even for the best of us, it’s difficult to estimate ahead of time.
If you’re part of a larger team or are collaborating on a project with others, then design time can be more complex to estimate. Every new communication channel to manage is another potential unknown quantity to navigate, not to mention an extra point of view to integrate.
Now throw in an agile design/dev methodology, and everything gets infinitely more uncertain again. You may enter into that process not even knowing what the final outcome is meant to be, let alone the goals of the next sprint. Your brief becomes a weekly moving target.
(This is one reason I prefer pricing by the week for longer projects — larger chunks are easier to estimate than hours or days.)
How can we price design better?
If only pricing creative service were as straightforward as pricing products. You have a known cost and a known profit margin you need to earn a profit. It’s simple math. No guesswork, no grey areas, no unknowns.
If we want design pricing to be that easy, we have to find ways to remove uncertainty from the equation. Fortunately, there are some methods to try.
1. Turn discovery into its own preliminary project
Many clients don’t know exactly what they want. Or they know their business goals but they don’t understand how those mesh with their customer’s needs. They turn to a designer to help them scope out those requirements as a first step in the design process. This may include things like research, info architecture, and user flow diagrams. Don’t fold that phase into your larger design project, and then try to estimate the remainder of the job that comes after it. Instead, sell this as a separate discovery “road mapping” service.
The outcome of this project is a clear scope of the design requirements that will inform the next part of the job. Only once it’s complete can you estimate the remaining design work. Your client is free to walk the deliverables of this project to someone else if they don’t have confidence in you to complete the job. (In reality, that almost never happens, but it makes them feel secure knowing they could).
This step removes any potential uncertainty and scope creep that springs from an ill-defined brief.
2. Break down UX design into its own project too
Sometimes you have to take this method of breaking down projects even further. The larger the project the more likely it becomes necessary.
When asked to estimate the price of a UI design job, my reply is almost always that I need to complete the UX side of the project first. How can I scope and price a visual design job until a full picture of the functionality is defined?
So I’ll sell the UX design process as a separate prerequisite project, and its outcome (usually wireframes) is used to scope and price the UI design work. It also acts as a handy tool to scope development cost as well.
Again, the goal here is to eliminate unknowns before committing to estimating the price of a project phase that relies on the outcome of the previous step.
3. Work with a flexible pricing structure
Despite its flaws, hourly pricing is the most flexible when dealing with design unknowns. If you can quote your client a potential range of time/cost, but then bill for the exact time used, you’re not penalised when a project demands extra design exploration to find the best solution. Contrast this to a fixed project quote, where you’ll be pulling your hair out anytime something strays from your assumed scope.
But it doesn’t really matter what pricing method you use. What’s important is how you build in flexibility. You might negotiate to be flexible on time frames if your client is rigid on cost. Or require some flexibility on cost if the deadlines are fixed and the scope isn’t certain. The more unknowns a design project has, the most flexibility must be built in. And don’t make the mistake of assuming all that flexibility yourself. Your client should bear at least half of it.
You eliminate stress about pricing when your client’s flexibility on cost is aligned with the project’s level of uncertainty.
4. Set clear client expectations
Many clients have never gone through this kind of creative process before. They don’t understand the amount of responsibility they have towards keeping a project on time and on budget. It’s up to us as designers to explain our processes and our expectations for what they need to supply at each step in that journey.
Be crystal clear about when final content and imagery are required. State explicitly what kind of feedback you need at each project phase, to ensure your client is focusing on the right things at the right time. Spell out what kind of delays will occur if they fail to meet their obligation to this partnership, and how that affects cost and timeframe.
Uncertainties about creative feedback can be reduced if you and your client are both on the same page regarding process and responsibilities.
5. Validate your design solutions objectively
The design process — especially when it gets to the visual part — can be unknown if too much subjectivity and personal preferences are thrown into the mix. This is the natural tendency of anyone critiquing design, because that feedback always comes from their personal viewpoint. However, we must educate our clients to think about design objectively.
This starts by framing design discussions the right way and validating design decisions in objective terms. Support your design decisions with usability research and best practices. Validate your design choices with user testing — or at the very least, feedback from a wider range of stakeholder and customers beyond the people in the room.
Well researched ideas and data-driven design should always win over subjective aesthetic preferences. The more you can shift design debate from subjective to objective terms, the more whim and uncertainty you remove from the creative process.
Pricing design will always be difficult
Unknowns will exist no matter how well you standardise your design processes. But playing the blame game and pointing fingers at your clients for creating scope creep isn’t right, nor is it productive. It only happens if you allow it to happen — through lack of a clear agreement, poor communication, inflexible pricing practices, or improperly set expectations.
If you find yourself repeatedly estimating prices inaccurately, there’s something wrong with your pricing method. It’s a wake-up call. Take that opportunity to reevaluate how you structure projects and estimate costs, and your business efficiency and profit margins will thank you for it.
Want to comment?See this story on Medium
Hi, I'm Benek Lisefski. Since 2001 I've run my own independent design business. Join me as I unfold 18 years of freelance business knowledge: honest advice and practical tips to help you take your indie career from good to great.
MediumTop writer in Design, Business, and Entrepreneurship.