How to choose the perfect price (my super simple process)
As a service provider who is selling their time and expertise and skills and knowledge, all really intangible things, how do you decide how much to charge? This one’s for you if you’re asking, “What if I ask for too much and lose the project? What if I ask for too little and leave money on the table?”
Whenever I speak with other web designers, especially designers who are working towards their first few paid projects, there is one topic that comes up over and over again: pricing.
This is my super simple pricing method that I share whenever someone asks me, how do I decide how much to charge?
1. Find the starting point
The first thing I do is find the starting point.
I ask myself, “How much of my time do I think will go into creating the kind of experience and outcome that I want to deliver for my client?”
I don’t believe in charging an hourly rate, but I do have an hourly rate in mind for myself. Because when you’re selling a service, you’re also selling your time. It’s not the only thing (or the most important thing) that you’re selling, but it’s definitely one of the things.
So I like to start with the time requirement for the project. To do this, I guesstimate the number of hours that will go into a project, and then I add 50% Because I know that I tend to underestimate how long things take. Through trial and error, I’ve found that for me, 50% is a good correction.
So that number of hours multiplied by my hourly rate gives me my starting point.
2. Set the maximum
The second thing I do is set the maximum.
I ask myself, “What results are my clients getting in general? What results can this client expect to get? And what is that worth to them?”
When a client invests in working with me in creating a new website, I want them to get an amazing return on their investment.
That can look like:
Signing new clients
Booking sales calls
Getting interviewed on a podcast as a guest expert
Being featured in an industry publication
Increasing their prices
The list goes on and on, and it really depends on the client.
So I ask, “What is that worth to this client?” And that is the maximum.
This does take a little bit of guessing, but if you’ve done your market research, and you really understand your clients, this should be doable.
3. Set the minimum
We’ve set the starting point and the maximum, so you can probably guess that the third thing that I do is set the minimum.
I ask myself, “What is the lowest price I can charge and still feel good about doing this work?”
I don’t want to be in situations where I’m thinking, “I am not getting paid enough to do this.” I have done that before, and it’s the worst.
I’ve experienced intense resentment, pulling all nighters just so I could complete projects and get rid of those clients. That is not a good feeling and I didn’t start my own business to feel this way.
So I ask myself, “How much should I charge to ensure that this does not happen?” And that’s my minimum.
4. Make the decision
The fourth thing that I do is make the decision.
I pick a price, a price that’s somewhere near the starting point and falls between the maximum and the minimum. I just choose.
You’ve probably heard the business advice, “Take messy action, because that’s how you learn, that’s how you move forward.”
The opposite of taking messy action is just thinking about all the possible actions. And when you do that, nothing changes, there is no moving forward, and you’re stuck where you are.
The same thing applies to your pricing decision.
When my clients are indecisive about their pricing, I just tell them to pick something. They’ll work with a new client with this pricing and at the end of the project, they can review and tweak based on that real experience, as opposed to based on some hypothetical situation.
5. Check in with your gut
The fifth and final thing that I do is check in with my gut.
Once I’ve picked a price I ask myself, “Does this price make me feel like my clients are super lucky to get to work with me?”
And also, “Can I say this price out loud during a face to face conversation and feel really proud and confident?”
If the answer is yes, I know that I have the perfect price that:
Makes me feel really excited to go and do my best work, and also
Makes sure that my clients are getting so much more than the money they’re paying for their website.
Get the Web Designer Sales Call Script Template
Are you a web designer?
If after figuring out your perfect price, you need help figuring out what to say to a client during a sales conversation, I’ve got a script for you:
It’s called the Web Designer Sales Call Script Template.
I’m curious to learn how you make pricing decisions in your business.
Please take a moment to let me know in the YouTube comments right here.
