Design pricing: It’s never just about the price

Dear visitor: Please keep in mind that this post is originally from Vibor Cipan's personal blog, the name of which we eventually adopted as our company name together with its conveniently-named URL. We're keeping the posts on our official company blog for all the subscribers to Vibor's blog who have read and commented on his previous posts. Please be aware that this post represents Vibor's personal thinking few years ago and doesn't necessarily represent the opinions of the UX Passion as a company today. 

Setting proper pricing for your UX design work is crucial. It goes hand in hand with setting your customer’s expectations. Set the price too low and you will gain reputation of the same kind. Set it high – you will also set high expectations. If you can deliver on them – then keep it that way. Reason: it’s never just about the price.

Introduction

For the past several weeks I’ve been involved with number of presales and sales talks, presentations and negotiations with clients. My team has helped me and we have established our price list – hourly and per-project rates for the number of different services we are offering: UX design (including interface design for web, desktop and mobile), information architecture, content creation and development, usability testing and user research, SEO, SEM, training and, of course, consulting.

Of course, coming up with the prices was tremendous effort from our side and huge time investment. Our consultants did very well and now I am very satisfied. We tried and succeeded in categorizing our services and their constituents. We have even developed number of internal tools to help us reach and estimate time needed for specific service or project. We want to be transparent and fair to our clients and we sincerely believe in delivering even more than expected. I like to believe that all this goes without saying in our industry. However, realistically I know that is not exactly the case…

It’s never just about the price

When sitting in the same room with the client or client representative, usually that is some C-level executive or high positioned person from IT / Tech division, most of them are looking for several elements of our offerings: our availability, references, tools and technologies we are working with, quality – and of course – price.

You know it all too well that often they will just go for price. You keep showing them PowerPoint, previous case studies, competitive offerings – but still – they often just look on the price. Personally, I dislike phrases like: “Hey, this looks just great and you guys are really good at what you do, I can tell that, but seriously, this price?!”

And that is the first error they are (unintentionally) making – focusing on the price and the price only.

I do, however, have tremendous respect for clients explaining to me that currently they do not have budget allocated for what they require from us and that they would be gladly buy our services but current situations does not allow them to do so.

But I see problem with “explanations” like “If you lower this price down, we will accept your offer and you can do business with us!” or, even worse “Do this for free / cheaper for us for this, first time, and next time we will pay you full rate!”. I consider this as an offense. Seriously I do. And my answer it that case is: “Well, let’s do it other way around – you pay me full rate now, and I will do it for free / cheaper next time! What do you say?” And you know is usually the answer? Nothing. Silence. Mute.

Quality / Price ratio in UX design

I believe in elitism. Elitism when it comes to the quality of the service and products. I believe that great clients are looking for nothing less than elite and exceptional products and services. I know that in this case I can say that those clients are not just great (since they are paying us properly for our services) but they are also smart.

If you take a look at my previous article where I am thinking about UX ROI: User Experience Return on Investment – you will see that there are 3 areas and 2 types of measurements I’ve described there. Investing in UX design in its broadest sense of word is not a cost. It’s THE opportunity for business. The opportunity for growth and market differentiation.

There is a well know and well established metric called Quality over Price ratio (QPR). In the wine trade industry this is one of the important elements. In the UX / web design industry some principles hold true as well. My business consultant explained it to me in simple terms in 4 simple cases.

Four simple cases – considering quality over price ratio

It all comes down to the fact that if something is of high quality and it costs relatively high amount of money – you, as a client, can be satisfied.
Also, if you pay small amount of money and receive exceptional quality of the service – you can be very satisfied (of course) but I would have troubles believing that something very cheap can result with high quality. Of course, as always, there are exceptions, but relying solely on those exceptions is very dangerous and, in the long run, much more expensive.
Third case is when you pay relatively high amount of money and receive very low quality service (if you get it at all) – that’s when you, as a client, are in really bad position and your frustration is completely understandable. I feel sad when I hear stories from clients describing their experiences with bad designers – those people are making huge damage to our business and profession, but the biggest problem here is that they are leaving their clients dissatisfied so they need to go out, hire a new agency and pay again, hoping that this time nothing will go wrong.
Last, forth option is when you pay a little and you receive / expect a low quality product. Usually, as a client you will keep bitchin’ saying that you have paid enough / lot and received a bit if anything. If you see yourself in this position – then do yourself a favour and don’t make that same mistake again. Personally, I’ll never do business with someone with this kind of attitude. Someone who disrespects design and UX as a profession is not going to be our client… Also, this point has some close relations with the third point – client ends up being dissatisfied but in this case it’s because in the beginning he tried to save some extra money (since, hey, this design thingy can’t be all that worth) and now he is angry because he lost his money (event that small amount he dedicated) plus he knows that he must look for new designer to do the job.

At the end…

Dear past, current and future clients – it’s never just about the money. Look what you are getting for that amount of money. Don’t just say “Yes, yes it’s very cool, but this is too much!”. Too much for what and what’s the reason? Is it because you don’t think it’s worth that money or is it because you really don’t have money in your budget for this? In either case think about quality over price ratio.

Paying 1 million dollars for Yugo car is expensive; paying 1 million dollars for Bentley is not

Paying 1 million dollars for Yugo car is expensive; paying 1 million dollars for Bentley is not

Paying 200 000 dollars for Yugo car is expensive; paying 200 000 dollars for Bentley is not. Are you looking for Yugo or Bentley? You know, both of them are cars and both of them will take you from point A to point B.

But, there are not-so-subtle-differences between those two… I love building and selling Bentleys to my clients. They love them too! Win-win, I’d say!

Let’s stay in touch – You should follow me on Twitter now!

Comments (14)

  1. Very well said. Any artist should be properly compensated for good attractive work. Models can make good money, why not artists and designers as well?

    If the model can make a lot of money for a client and an artist’s art work can also do same, how is that not a sound investment?

    I can understand that before handing over money, people want to be assured that your art can sell. However, who is there to critique whether or not it will sell for the company. I can understand some of the restraint from wanting to invest in something if the purchaser does not know: a) how much the art will affect their sales; or b) know all of the work invested behind the scenes in research to create that art.

    A Software Developer has the same issues to deal with at times, especially when it comes to user-interface design. The “Developer’s” concept of a UI may be much more in tune with their though processes (or just thrown together) while there is someone who specializes in UI design that could turn a frog into a prince.

    Thank you for the article.

    • Hey Joe,
      Thank you so much for your comment and insight. I love the comparison between model and designer or SW developer for that matter. And as I said in my comments here – a lot of responsibility is on us as design / UX professionals and practitioners to educate and empower our clients. It’s not just about selling our services and products – it’s about making case and sense for our client’s bottom line. We are uniquely positioned to affect their businesses, brand and overall experience – it’s a big responsibility and a big challenge. That is why I think it is of utmost interest for all parties involved to clearly present all those perspectives. And of course, that costs some money, but in the not-so-long-run can bring back much more for our clients.

  2. Oh, so true. Unfortunately there are too many potential clients who claim it is “too much money”. But the Bentley-Yugo illustration is the best metaphor for our industry and its pricing. I also believe what Joe says to be true. Design = Art and therefore more than justifies its pricing.

    • Thanks for nice comment. I just had a phone call with one of the “Good and smart” clients – as I said – I do understand that often they are tight on budget – but in those cases – you buy services in the amount you can afford. You don’t go and try to get all for nothing. And yes – Design often = Art.

      Also, I believe that for the good part, we as designers, are also responsible for educating our clients and explaining them what is exactly that they are getting from our services and products. In that scenario – they will also feel appreciated since you are giving them honest, deep and sincere explanations and managing their expectations.

  3. Thank you for this. Puts a lot in perspective. I am going to read this again tomorrow before sending out a proposal to a potential new client.

    • Hi Corrie,
      Thanks for your nice comment and for your time to read this. I wish you all the best with potential new client! Good luck!

  4. Great read and a good metaphore indeed! Oh, and there’s one thing I just can’t hold back: That’s a BMW, not a Bentley! ;)

    • Hi Olli,
      Yes – it’s BMW on the pic since it was the pic from one of my presentations and talks – and I’ve used Bentley as a metaphor since it’s price is about 200 00 USD and that is roughly 1 million Croatian Kuna and I was (obviously) thinking about millions when writing this… Anyhow, I guess there might be some BMWs priced 200K USD :)

  5. Excellent thoughts, thanks for the post.

    Here is one of my recent Twitter posts, to consider:

    Value Messaging: It’s not the price they don’t like, but what they understand they are (or are not) getting for that price.

    Consider focusing on benefits and results when speaking with prospects / customers (sounds like you do) . . . although, be careful bringing up charging them for your time, they really don’t want to pay for your time . . . but they are willing to pay for results. :)

    • Hi and thanks for comment – very well said when you say that time is not something they should be paying for and I agree with that completely. Focusing on their bottom line and concrete benefits is right direction!

  6. Thanks for posting this, this is very important in dealing with clients who need to understand the value of good design.

    • Thank you for your comment. It is really appreciated!

  7. This caught my eye: “But I see problem with “explanations” like “If you lower this price down, we will accept your offer and you can do business with us!”

    We really do find knowledge of or web devs and webmasters even graphic artists are put to a test. It is hard to explain how much work is put in getting a website live. We’ve had our share of working for less just to show them we know what we’re talking about.

    I might try the reverse offer technique you have though.

    Cheers!

    • Many industries are underpaid recently. The economy just took an overall hit in just about every aspect.

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