Since putting more energy into my freelance logo design business by going freelance I’ve thought long and hard about making my business better; how can I be more productive, efficient and profitable. Part of this thinking has included reviewing my logo design prices… am I charging enough?
Here today, I keep it simple for myself and my clients by charging fixed priced. However, I don’t feel this is the right apprach ongoing, especially if I want to build a successful business. As all identity designers know, some projects take substantially longer than others, and in some cases, your work has more value to the business.
I’ve recently had a chat about this with a friend and fellow designer, Kyle Courtright, who shared an excerpt from his eBook, The Ultimate Guide to Logo Design, where he delves into a discussion on value based pricing.
I’ve learned from this insight and will review my prices and sales process accordingly. I loved the chapter, and think you’ll learn from it too, so Kyle has kindly allowed me to share it with you all… enjoy.
Chapter 5 Excerpt: The Ultimate Guide to Logo Design
In it’s simplest form, pricing your logos comes down to one thing.
Value.
Value is the regard that something deserves. It’s the importance, worth, or usefulness of something.
I hear it all the time, “How much should I charge for a logo?”
It’s a fair question, but one that can’t be determined universally—your logo rates are not a one-size fits all type of scenario.
And really, that’s the beauty of it.
We have the opportunity to price our logos based on the value each one of us provides.
Value-based pricing is all around us.
Starbucks sells a cup of coffee at a premium price — about $3. On the opposite side of the street a cup of coffee from McDonald’s goes for $1. Consumers are willing to pay a premium, but only if there’s enough value to pump into that $3 you’re about to hand the Starbucks cashier.
Let’s say a designer creates a custom logo for only $50.
If I asked them if they thought their logo design services are worth $50, they would emphatically say, “No way”.
So why do some of us settle for cheaper logo pricing when we know our logo services are worth more?
To figure out the “why”, we have to discover root of the decision to settle on the cheap price, and the role we play in the cheapening of our work.
Here are a few reasons we can settle for pricing our logos too cheaply:
1. Fear.
Not knowing where the next project is coming from can be a scary thing.
You’ve got bills to pay, expenses to cover and taxes to plan for.
Fear has a crippling nature. It not only has a numbing affect on our decision making, but stunts our creativity too.
We can’t let fear put a strangle-hold on how we price our logo services…not to mention creativity.
There’s good news, though.
We can easily counteract these fears by having a backup plan—a shortlist of avenues to get new design leads/jobs.
With a plan in place to acquire new leads, you won’t be tempted to decrease your logo rates just for a better chance at winning the project.
Instead, you’ll be worry-free when design inquiries are sparse.
Need some effective avenues to get more logo design work? Check out the following resources to find all the logo projects you can handle:
- Folyo
- Authentic Jobs
- Juiiicy
- Inbound
- Workshop
- Working Nomads
- Thumbtack
- Behance
- Dribbble
Also, check out this list of 100+ graphic design resources to make your work more efficient and cost-conscience.
2. Lack of conversion-centered focus.
You’re a creative who wants to do just that…be creative.
And that’s completely understandable.
But there’s another world that many designers aren’t as attune to.
I’m talking about the world of SEO (search engine optimization), A/B testing, analytics strategy, heat mapping, conversion-centered design and conversion rate testing.
Let’s briefly focus in on one of these avenues that won’t take up a lot of your time, but will pay big dividends for your design business.
Conversion rate testing.
I’ve found that taking the time to optimize for conversions has correlated to winning a larger percentage of design projects, and in turn, positively impacts design rates.
A higher conversion rate will create a higher demand on your design business.
Next to expertise/quality of work, having a high demand is one of the easiest ways to raise your logo design rates.
In order to reach a higher demand, winning more clients is great avenue to pursue. If your demand increases, your logo rates can follow suit.
Here’s a conversion test that you need to try out…
I did a simple test to see how many design clients I won from email, and how many were won from a phone call. Pretty straightforward.
The results were eye-opening.
The analytics showed a 21% conversion rate when I just used email. But when I was able to speak with the potential client over the phone, the conversion rates skyrocketed to about 65%. That’s a 309% increase!
In other words, you just tripled revenue from this one small change.
This is the power of testing your conversion rates.
Remember…higher conversions mean more revenue, more revenue means your logo rates have more breathing room to increase.
Constantly tweaking and optimizing seemingly small parts of your design business will positively impact your bottom-line over time.
Trust me, if you’re willing to put in the time to optimize for conversions, you’ll increase the demand on your business.
You’ll set yourself up perfectly to price your logos exactly where they need to be.
3. Your logo rate is…comfortable.
The biggest mistake I see my fellow logo designers make is keeping their logo rates the same for years on end.
They get comfortable with a rate which prospects often say “yes” to. Since they say “yes” so much, it has to be the perfect number, right?
Not exactly.
Think of your logo portfolio from a couple years ago. Most of us would say that we’ve learned and improved quite a bit over that 2 year timeframe.
Many of us would even cringe at some of our old logos. We don’t want some of them to see the light of day.
Why?
You’ve upped your game. You’ve honed your craft. You’ve gained valuable experience.
David Airey developed a design pricing formula which I feel is pretty much spot on. Take a look at the formula below to get a better idea for each factor that plays into determining your logo rates:
Level of expertise
+
Project specification
+
Turnaround time
+
Service and support
+
Level of demand
+
Current economy
+
Physical location
=
Total Cost
There’s a reason why “level of expertise” is at the top.
Knowledge, skill and design quality all make up this category of expertise. These are some of the biggest determinants of value when your pricing your logo services.
Don’t do a disservice to yourself with a stagnant price which represented your work from a couple years ago.
If you need to set a reminder each quarter to take another look your pricing, get it done. Constantly reevaluate your logo rates so they represent the real value you bring to the table.
The Power of Transparency
You already know that honesty is a virtuous quality.
You also know that winning that next logo project is predicated on building two things: Value and trust.
Most prospects will give you the benefit of the doubt and assume you’re generally an honest person.
But what if you took honesty to the next level? What if you could somehow show them that you’re honest person? Someone they could truly trust?
“Honesty is about the scars. It’s about the blemishes. But it’s more than just bragging about failure, which could be a form of ego. It’s about truly helping people.” – James Altucher
I’ve learned over time that being super transparent with prospects plays is a key factor in winning more logo design projects—and giving yourself the chance to raise prices.
Here’s what I’ll communicate to prospects before a potential logo project…
I’ll let them know, “If you’re looking for the cheapest logo designer out there, then I’m not the best fit. But, if you need a quality logo that represents your business in an effective way…then the fit is right.”
Do you see what happened in that conversation?
A higher level of trust and value were established.
They knew I had their best interest in mind because I could have left out the part where I’m essentially announcing that my logo services aren’t cheap.
I’ve found that clients see this type of transparency…refreshing.
They can even resonate with this idea of not being the cheapest because many times, they tend to have the exact same business philosophy.
They aren’t the cheapest company among their competitors either, and know what it means to have a value-based mindset.
All of the sudden, you have a commonality with this person. They understand where you’re coming from. They get it.
Skeptics may dub this is as “over-transparency”, or more specifically, “A quick way to lose a potential client,” but I’m telling you…it just works.
If you implement this into your own conversations with prospects, you’ll win way more logo projects along the way.
Branding happened in this conversation too.
I associated myself with design quality—not communicated with a haughty disposition, but with a confident and firm delivery.
There are those rare cases where consumers just straight up don’t care about value. And that’s okay. These are the tire kickers you don’t want to work with anyway.
These individuals have a set number in their head on what they think a logo should cost. Anything outside of this set number becomes too much — no matter what type of value you provide.
Thankfully, most situations aren’t like this.
It really is a sad thing is to see businesses sometimes pull back funding on the visual cornerstone of their brand. They see a logo as an expense rather than an investment.
Sometimes, it’s impossible to convince potential clients that it’s all about value. Their mind is made up and it’s out of our control.
What we can control is having the wherewithal to weed out the bad leads and from the good.
In the end, don’t take value-based pricing for granted when it comes to your logo services.
Discover the level of value you bring to the table, take an honest look at what your logos are worth, and set your rate.
Once your rate is set, stick to your guns until you have the chance to reevaluate.
Gone are the days of settling for overly-cheap logo pricing.
Don’t sell yourself short.
It’s a freeing feeling when your logo rate is at a price that aligns with the value you provide.
Enjoyed this extract and want to read more? Make sure to check out Kyles eBook, The Ultimate Guide to Logo Design, and find him on twitter here.