Working out what to charge is one of the endless challenges of being a creative professional – particularly in a difficult economic climate. Lots of creatives work out their pricing based on an emotional response to the job offer (“I want this gig!”), or to the client (“Can they afford this?”), or out of desperation (“I need this work!”), none of which is a great place to start.
Working out pricing based on a financial methodology, starting with your own costs and time, and an understanding of what the market can bear is obviously a much more sensible approach. It also takes time and expertise to get right, but it’s worth pursuing. You can find out more about how to price your work here.
There’s also a third option, which takes our understanding from the product world and applies it to those service providers among us.
Package Pricing means setting a fixed price for a fixed offer. Think of how it applies to products – it would be weird to haggle over the price of a pair of earrings that could be bought online. The price is there, and fixed, and only changes if you want something bespoke. Package pricing for services is the same, and works very well if you have a service-based offering that is always the same, and results in a definite outcome for the client.
Most creative practitioners have the ability to create a package price for some of their work (but not all, of course). Some examples of a packaged creative service include:
- a simple logo design;
- a composed musical ‘sting’;
- a short written report or article;
- a workshop delivery that is always the same;
- a video or animation that is fixed in length and style.
- The service results in a ‘product’ of some kind, which is why the price can be fixed.
When devising a Package price, it’s best if that price is outcome-based, rather than time-based. A time-based package means committing to spending a certain number of hours on the work, which can be difficult to predict and can create issues with client management and expectations.
An outcome-based package isn’t dependent on time – it’s based on a clearly explained service being delivered to a deadline, but how long it takes to create is not the basis for its value. How long it takes is irrelevant to the client, and not a measurement of worth. This can also work out brilliantly for you. The less time it takes to create and deliver, the better your ‘margins’ (that is, the difference between your cost and the price at which you sell).
Package prices can also work for the client, because a fixed price is something trustworthy. You’ve guaranteed that the work will cost $X, which is an amount the client can budget. If you have explained the outcomes clearly, and the deadline, then all you have to do is meet those criteria and you’ll (hopefully) have a happy customer. The price stays fixed as long as the job stays fixed – if the client wants to make additional changes, or desires something more bespoke, then you can change the price accordingly.
Some clients will love the certainty of a package price, because it reduces their risk. If the client has paid you to deliver a clearly outlined something on a specific date, for a fixed price, any time or expense overruns that you incur are NOT THEIR PROBLEM. The price point only changes if the client wants alterations, and affixed price can help you to appear trustworthy and professional. You might even find that clients micromanage you a lot less – there’s no need, because your offering is now based not on time spent but on outcomes achieved.
Not all of a creative person’s work can be neatly packaged, of course. A design overhaul, or a long video, or a piece of creative writing, or the score for a TV show cannot and should not be packaged. It’s dangerous for a creative to offer all of their work as a package or fixed price – this sort of thing should be properly quoted for, because there are too many variables.
However, it’s OK to offer a combination of packages and proposals. Develop packages for some of your more common, simple projects or certain types of client work. Use your proposal or quote process for more complex projects or clients who need something unique to them. This allows you to offer flexibility, meet clients’ needs – and still make money.
Lots of creative people also hate putting prices of any kind on their website, because they worry that it will fix their price point, or because their competitors will see their pricing structure and undercut them. In terms of fixing price, that’s definitely an issue, which is why it’s important to explain in your marketing that some offerings are packaged, based on strict criteria and outcomes, and the rest are not.
And in terms of competitors undercutting you? Some certainly will, and if your clients are shopping for cheap then they’ll be attracted to that lower price. LET THEM GO. There’s nothing you can do about senseless competitors who want to undervalue the market OR cheapskate clients. Focus your attention on clients who are shopping for the best quality, not the cheapest price.
Besides, if you have no prices on your website then clients might think you’re too expensive for them. After all, “if you have to ask… you can’t afford it!” Lack of clear packages could be turning off good clients with money to spend.
Here are some tips for devising your Package Price.
Work It Out Properly.
Your Package is not based on the time it takes, and you won’t be reimbursed for expenses, so whatever you’re creating needs to be efficient and repeatable. If each Package takes hours and hours more than it should, or involves lots of expenses, you’ll be out of pocket. Your Package needs to be template-based, or parts need to be automated, or a system needs to be created (See our article on creating systems). If costs are also at a minimum, and it doesn’t take you too long to create the Package, you’re in the best position to make money.
Define Clearly What’s Included.
It’s vital to set clear expectations for your clients about what the Package includes or the scope of the work. What will be delivered? What’s the deadline, and any other milestones? What does the client need to contribute? Will there be any extra costs or add-ons? Be specific to avoid confusion, otherwise you’ll have muddled clients (or you could end up spending too much time on the work).
Be Definite That You Are Open to Custom.
Packages don’t work for everything – or for everyone. Some clients will need or want more than your Package includes. Make it clear in your marketing that you can devise a quote or create something bespoke that fits outside the strict parameters of the Package. This is not an either/or scenario – you can do both Packages, Packages + Time, and unique quotes for your creative work.
More Than One Choice.
What’s better than one Package? Many Packages! Some clients still like to choose, even if the choices are limited. Packages are pre-set and pre-priced, so tend to look inflexible (although see the above point). You can address this with multiple Package options, at different price points. You could offer Small-Medium-Large options, or Good-Better-Best, or Basic plus Add-ons. Be clear on differences between the Packages, and you’ll provide your clients with choices and the possibility of an up-sell.
Package pricing may seem at odds with creative work, but if you have something you can offer to clients that is efficient to produce, outcomes based, consistently repeatable and good value or quality (from the clients’ point of view), a Package could work. When done properly, Packages can save you time by eliminating the need for individual quotes on certain kinds of work – clients have clear expectations about outcomes and so tend to be better behaved – and from a marketing angle a Package can open up additional money-making opportunities. It could be the other kind of Triple Threat, so definitely worth a try!