10 Pricing Principles & Strategies for Freelance Web Designers

Pricing freelance web design services has always been an issue, as it is a very important matter that can make a huge difference in how your business is viewed by your customers.

10 Pricing Principles & Strategies for Freelance Web Designers

Often it can be the determinant factor for success or failure, by allowing you to profit or causing you to lose resources while working on projects.

There are some common mistakes which many designers face when choosing how to price their services:

  1. thinking that the price can never be changed once it has been chosen
  2. thinking that there is such a thing as the “perfect price”, which will make them and the customers happy
  3. thinking that all the customers will agree with their pricing

There’s a lot of dispute about what’s the right way to charge and doing it wrong can lead to unwanted situations between you and your clients. But it’s important not to undervalue your work, just because you’re afraid you’re not going to find any clients. Some freelancers try to rely on negotiation and some stick with their own rates.

“Quality over quantity” is a great motto in the freelance world and it will help you avoid some sticky situations. Here are 10 basic principles that you should follow when setting your prices on the freelancer web design market.

1. Emphasize time over money

When presenting your rates to a client, try to emphasize the amount of time you will be saving them, not the amount of money. Remind them that time is a very important and non-refundable currency. They can often get carried away with looking for the best price and it’s your job to remind them why they are working with you instead of someone else.

This will allow you to sometimes keep your rates higher than the market average and have your customers respect you for it because their time is very valuable and the main reason to hire someone for a task is to have it done right and in a timely, efficient manner.

2. Rely on quality over quantity

Focus on producing high quality content to justify a higher price rather than trying to do as much work as you can and fitting it all into a very low price range. Wearing yourself out is bad for business.

3. Anchor your prices

People tend to be clueless about prices. Contrary to economic theory, we don’t really decide between A and B by consulting our invisible price tags and purchasing the one that yields the higher utility. We make do with guesstimates and a vague recollection of what things are ‘supposed to cost.’

- says William Poundstone, author of the book Priceless: The Myth of Fair Value (and How to Take Advantage of It).

Try presenting the client with a price by specifying that it’s the estimated value of what the service you’re providing is worth. Offer details to what this service entails, what they’d be getting for their money. Just as they are ready to accept your initial price, present them with a new price, especially tailored for them.

A good way to make use of price anchoring is to create a tiered pricing strategy, providing different versions of a core service at different prices. This will build in your anchor prices and allow you to take advantage of the multi-price mindset.

4. Don’t try to guess what you should charge

Trying to guess what you should charge can leave you very disappointed later on, when you find out what other freelancers are charging for the same type and amount of work. It’s very unpleasant getting disqualified from working on a project because your price was too high, as a result of you not doing your research. There is also the case in which you complete your work and collaboration only to later find out that you could or should have been charging much more.

To avoid these kinds of situations, make sure you research the freelancer market and know what the price range for the services you are offering is before deciding on your demands.

5. Don’t commit to a price without knowing the scope of the project

Before you embark on a project, make sure you know exactly what effort it will require for you to run this marathon from start to finish. Your time, amount of work and other resources all need to be taken into calculation when assessing whether a project is worth taking on.

6. If you feel a project isn’t paying up for you, increase your rates or drop the project

Scope creeping is a common problem in freelance work. Not only once will you have that client who tries to sneak in extra tasks and argue that the initial description of the job either had them or that they just assumed you are willing to take on the extra work, because you’ve already signed up to work with them.

Make sure that if this happens you evaluate how valuable this client and project are to you and if you come to the conclusion that your efforts are not being rewarded as you’d wish them to be, you take action.

When unhappy with the monetary compensation you are getting for your work, increase your rates or drop the project. It does hurt to lose a client due to a price disagreement, but often the client will know they are putting on your shoulders more than you bargained for and will accept to pay more.

Do this sooner rather than later. If you have concerns, make sure you address them as soon as possible, so that they can be quickly remedied and you don’t end up wasting time on a business relationship that has a high possibility of being dissolved in the future.

7. Decide if you will charge by the hour or charge per hours/resources used per project

Getting paid by the hour means keeping timesheets and billing your clients accordingly. The advantage of this method is that you are getting paid for what you’re actually doing in terms of time spent on a specific project. You also get paid for the extra time you put in, so this is often a viable choice.

Getting paid per project or fixed pricing means you agree to bill your client when your work is completed. The price is usually agreed on up-front. Fixed pricing usually involves more paperwork, because you will want to have evidence of resources spent while working on the project in case the client either asks for the documents or chooses to contest them.

There is no rule to tell you which type of payment model to pick in a particular situation. You will have to find out what works for you and your client. Understanding what works best for you in each type of situation is something you will to learn with time.

8. Don’t set your rates too low

Every freelancer has had that point in their career, usually at the beginning, where they didn’t have strong confidence in their skills or didn’t have a reliable enough portfolio, forcing them to set their fees below market price in order to get projects.

Don’t get stuck there. Once you’ve gained some experience and moved up the ladder, start trusting your abilities and the quality of your work. Set your prices according to researched market value, or even above if it feels like you are not making the most of your resources.

Don’t try to judge your prices based on whether you’d be willing to pay that amount for the services you are provided. More often than not, clients will decide you are worth the extra bucks if your portfolio is strong enough, if they are happy with your sample work or if you come with the required recommendations.

9. Exercise caution when comparing yourself to other freelance service providers

When trying to compare your prices to those of your competition, keep in mind that their time has a different value than yours. No two individuals are the same and the base factors for pricing are very relative. Some of them might even be ok with working a 50 hour project with minimum pay or none because their portfolio is weak, or the estimated value of their work is not as high as yours is. For all you know, they might be trying to repent for their sins in a former life by doing daily pro bono work.

Don’t ask your clients or potential clients to compare your prices to those of others. Don’t even suggest it. Research conducted by Stanford University shows that asking people to compare prices is the wrong choice for a business that relies on quality over quantity.

The mere fact that we had asked them to make a comparison caused them to fear that they were being tricked in some way.

- Itamar Simonson, Stanford University professor of marketing

The research reveals that when being faced with two options of difference price levels, customers may perceive the lower priced product as having a hidden risk and end up opting for either the higher priced product or not buying any of the two.

This theory is also backed by Nathan Barry’s account of how he chose the pricing model for his eBook that resulted in $100,000 in sales.

10. Specify a date limit for your pricing proposals

Unless you want to eventually be put in the situation where a possible client demands you honor prices from a three-year-old proposal, you should always specify a date limit on your pricing proposals. This will help you avoid the unpleasant situation of either having to actually honor the old pricing content or losing a client because they got comfortable with the idea of your services costing them a very low amount and are now incapable of accepting reality.

Pricing your services is no trivial task. It involves trying to keep everyone happy and satisfied and that’s never easy to do. For more information on the subject, you can also check out this interesting article about pricing experiments you might not know, but can learn from.

Takeaways
  • The main thing you should focus on is setting some value guidelines, so that the projects that take up most of your time and resources have the biggest return.
  • Don’t be afraid to stand up for your work, meaning that you shouldn’t underestimate yourself.
  • Change prices according to market trends, the amount of work you put into a project and sometimes, also to keep old clients and attract new ones.
  • Quality over quantity will go a long way.

Now that we’ve reviewed these ten basic pricing principles for your freelance web design business, we want to know which ones you live and price by. Feel free to share your experiences in the comments below to help fellow freelancers get a better idea on how to make the best of service pricing techniques and principles!

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3 Comments

  1. Very valuable article for freelancing web developer. Love to read your article very much. I hope your article will be helpful for the beginner !!

  2. you are just one of the best , really awsum article.This is the only site I have been coming to continuously for the past year and keep up the good work that you are doing.

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