Pricing is one of the most difficult and controversial topics for any service-based business owner. And I don’t think anyone struggles more than a web designer to get pricing right.
Every website professional that I’ve encountered over my time in the industry has cared deeply about doing a good job for a fair price, and I really believe it’s the big, faceless corporate companies that mess things up for us.
Recently, I was on a call with a potential client, a very well-off London solicitor. He told me he couldn’t get his head around why he was paying “all this money” for a website when he was seeing adverts for free websites all over the internet.
And this is the problem. People who are outside of the web design industry have no idea what is involved in the planning, designing and building of an entire website—and it’s really not their fault either. But it is down to us to explain the value of hiring website professionals.
However, sadly, this is difficult. So what usually happens is we doubt ourselves, end up underestimating the workload, are negatively influenced by “too expensive” comments and end up undercharging.
With that in mind, I want to give you some tips to guide you through the process of determining “how much a web designer should charge”.
Tip 1) Cost is subjective, so stop worrying what other people think
One person's expensive is another person's cheap. Cost is very subjective, and it’s impossible to know what someone else is thinking, so never set your price based on what you think the other person can or can’t afford. It just doesn’t work.
When you’re working with clients around the world, as many online businesses do, it’s even harder to know what would be deemed expensive or cheap. The only option you have is to set your prices based on what you feel comfortable with and stop worrying what other people think. I know this is easier said than done, but setting your price based on worry or the ‘race to the bottom’ mentality is absolute nonsense. Be confident in your price and your customers will feel confident too.
Tip 2) Set your price based on what you want to earn over the year and how much time you want to spend working
Tip number two is for the start-up that forgot to do their maths!
It’s such a common newbie mistake to make and, I’ll admit, I’ve been there myself. When I first set out in business, I was hanging around with the wrong business owners, people that didn’t value the work I was doing. I’m no accountant and, at that time, I set my price based on what others around me were charging. BUT there was a big problem with this strategy—I was doing a lot more work than my competitors. This meant, unless I worked a hundred hours per week, I’d never reach my yearly income goal. Rookie error!
Instead of looking at what others are charging, set your prices based on what you want to earn and work backwards, considering how many hours you want to work. This might be obvious to most of you, but for those who struggle (as I did) remember this—your calculator is your friend! Start working out what you need to charge in order to get to where you want to be financially.
Tips 3) Your price point should be just stretched enough, but not so much that you can’t say it out loud.
Bear with me here; I’m about to go all metaphysical.
You need to find just the right balance between a price that stretches you, and a price that you’re actually comfortable telling your potential customers. It’s no good setting a price that you’re not able to say out loud because it doesn’t feel right. Equally, if you have that niggling worry that you’re undercharging, you probably are.
So what can you do? Well, human beings have their own internal guidance system that has the amazing ability to weigh up all of the outside influencing factors and make the best possible decision for their circumstances. It’s called your intuition. Yet humans seem to bypass this guidance system and look for outside validation to questions only they know. What I’m saying here is, set your price based on your gut instinct. It works!
Tip 4) Find a target audience that can afford your services
Yes, I did go all hippy woowoo in the last tip, so here’s some concrete advice. After taking into consideration tips 1 to 3 (which all pretty much come back to the fact that the answer to your pricing woes lie inside of you), there is still one major outside factor to consider here—your target audience.
While it’s a myth that all start-ups are poor, there are some target markets that can afford your services, some that can’t, and some that think you’re too cheap. When you’ve decided what you’re going to charge, you then need to think about who can afford it. But remember not to make too many unfounded assumptions here (see tip 1).
Deciding which target audience is right for your price point is pretty much trial and error and, if you’re a new business, it’s going to take some time to get this right. My biggest piece of advice is to make sure you don’t choose an industry you hate working with just to make more money; that usually doesn’t work out well. Again, you need to strike the right balance between who you enjoy working with and who can afford your services—trial and error.
OK, that’s all for now. I hope you found those pricing tips useful. If you want to explore this conversation more, and get feedback on your pricing questions, I have a free Facebook group for web designers—“Brilliant Boundaries: Community For Web Designers”—which is a safe place for website professionals to discuss common boundary-setting topics such as pricing, packaging, client communication, business processes and more. Join the Facebook group.
Hannah Gibson, PhD
Owner at Gibson Copy Ltd.