Throughout the last few years of running Renga the thing that I have found the most difficult by far is determining how to properly price. It’s been difficult to determine what to value my work at across the board because there are so many variables. I have always wanted to have a simplicity and transparency to my pricing that would be the same for all my clients. This has posed a huge issue.
One of the difficulties with this was charging for strategy work. After sitting down with a few potential clients I was realizing that the value I was giving in the discovery meeting and proposal was large, but very difficult to bill for.
One of the podcasts I was listening to mentioned that clients never want the cheapest or the best option, they want the safest option. They will always take the option that is the least amount of risk. There are so many variables to this, but it shows that the variable is based on the client. Risk is entirely predicated on the clients situation. All we can do, is provide case studies, understanding of their business and a breadth of capabilities. If a company is looking to get a new logo they have so many options, you can get a logo for $5 or you can go to a large agency in Manhattan and pay $500,000. The end result might be exactly the same from both of these, but what you are paying for is the process.
If you are a large public company who is going to be putting your logo on the side of trucks, billboards, on ads that you are going to spend millions on, you probably don’t want to spend only a few thousand dollars on your logo. If you’re a new coffee shop who is putting the logo on the window, you should probably invest your limited capital into the atmosphere of the shop and the quality of the product you’re selling, rather than spending the majority of your budget on identity design and website. The reason is because the value of a logo is dramatically different for both situations. This is why we have adopted “value based pricing”. The price that we present to the business needs to make sense for both of our businesses.
We will always price our projects on a per project basis. Often we’re asked how many hours a project will take, I have started to ask “why do you need to know how many hours it will take?” the truth is that there are not many good answers to this question, outside of “someone else quoted us at $x/hr”. The creative industry is unique in that the whole basis for pricing is based on the incorrect metric. Having a deadline is of course important, but shouldn’t the value be placed on the quality of the product and it’s ability to accomplish the business objectives?
It would be great if quality of creative was directly correlated to the hours put in, but it so rarely is. Those at the top of their craft have spent years accumulating skills and data to allow them to work more efficiently. This reminds me of an anecdote that is all over the internet in many different formats, but the sentiment is the same:
“Legend has it that Pablo Picasso was sketching in the park when a bold woman approached him.
“It’s you — Picasso, the great artist! Oh, you must sketch my portrait! I insist.”
So Picasso agreed to sketch her. After studying her for a moment, he used a single pencil stroke to create her portrait. He handed the women his work of art.
“It’s perfect!” she gushed. “You managed to capture my essence with one stroke, in one moment. Thank you! How much do I owe you?”
“Five thousand dollars,” the artist replied.
“But, what?” the woman sputtered. “How could you want so much money for this picture? It only took you a second to draw it!”
To which Picasso responded, “Madame, it took me my entire life.””