Articles

Getting the Numbers Right

How Professionals Negotiate Price
By Maria Piscopo

Pricing is one of the most complex and grueling aspects of the design and illustration business. You can read the books and go to the seminars, but at some point you have to talk to clients. We asked creative professionals what price-negotiating techniques work for them and how they find common ground with clients and agree to a price. Whether you are an experienced professional or just starting out, these tips and techniques will give you a much better grip on pricing and the negotiation process.

"Perhaps the best pricing technique we've discovered is to write a good proposal," says Ed Brodsky, a partner at Lubell Brodsky Inc., a past president of the Art Directors Club, and a faculty member at School of Visual Arts, NY, "We start a proposal by restating the criteria for the project. This reminds everyone - including ourselves - what it was we agreed to try to accomplish. Next we explain what we plan to do in broad, general terms. This is followed by a more specific list of the work we intend to do, a price for each of these procedures, and a total. We almost always end the proposal by telling the client how excited we are to be considered for this interesting project and some of the benefits we expect the client to realize from our efforts. Perhaps the biggest advantage of writing a good proposal is that after we write it we often realize that the project can command a much larger fee than we initially thought. This alone covers the cost and time of writing the proposal and also has become the main reason we have successfully been able to raise our fees."

ICON Imaging Studios owners Harry and Cyndy Geier say, "We give clients three possible solutions to their needs. Each solution varies in regard to services and related prices. The client responds to the one that fits most comfortably into the budget - on the terms you set - but often will bracket up to the next price level in order to receive more services."

Gunnar Swanson of Gunnar Swanson Design Office and the author of Graphic Design & Reading have three solid recommendations:

"First, leave yourself room to do less. If you give a proposal for a trademark design and the client comes back and says, 'How about 75 percent of that price?' and you agree, then you have told the client that your pricing is arbitrary and you will do any job for less than your bid. If you respond with something like, 'I can do it for that price but instead of getting six roughs to choose from you'll get three and instead of refining two I'll refine one', then the client can still make a deal with you but won't bargain you down on every subsequent job."

"Second, make sure you understand the approval process. Write out the steps in every proposal or contract. A job that needs to be approved by one person will take a lot less time than one that needs to be approved by a committee. There are few better ways to sink a design project than to have someone who wasn't at the meetings (or, worse yet, someone you've never met or even heard of) second-guess an earlier decision. Make sure you involve everyone who has a voice in the decision. Sometimes you can't deal directly with real decision makers. This is a bad situation. Charge more and write even tighter proposals or leave the job to some other sucker. Third, never, ever take a job where you will resent having done it because of the price."

"For the initial meeting, at least, I try to encourage clients to meet with me in my studio, rather than going to them," says Louise Fili of Louise Fili Ltd. and co-author of Design Connoisseur. "Somehow seeing the body of my work on display and my office's perfect view of the Empire State Building adds credibility and makes my fees a little easier to accept. Many of my clients are chefs. When they ask me why my fees are so high (which they aren't), I ask them why risotto costs $35 at their restaurant. I never quote fees over the phone, unless I foresee a situation where someone expects to get a logo for $50. The one time I did give a logo fee verbally, the person was shocked. She said, 'But it's only four letters!' That's an interesting concept - charge by the letter."

Don Sparkman of Sparkman + Associates and author of Selling Graphic Design says, "The most common mistake creative professionals make when negotiating price is that they do not ask for a retainer or a percentage up front. Also, many do not specify what their fees are for. For instance, a proposal states that logo/logotype design costs $10,000. Fine, but it doesn't say how many ideas the client will get. The client can ask to see round after round of ideas. If the designer tries to tell the client that the $10,000 is used up, the client can correctly point out that the contract states that he or she would get a logo for that price and that hasn't been done yet."

Common mistakes include taking money negotiations personally. "Or being shy about talking about the money and getting what you need out of the deal," says Swanson. Most design clients sell stuff. They figure out what their product costs them to produce or what it's worth on the market. If a customer wants something cheaper or can't afford their product, they don't think they are being insulted. Why do graphic designers assume that someone turning down their price means they're not worthy? If you make a sale every time you talk to a prospect you either have otherworldly powers or you aren't charging enough."

Finally, Liane Sebastian, author of Digital Design Business Practices, offers this perspective, "Pricing a project isn't as tricky as getting the price - either through negotiation or through project management. You must know your overhead and what you need to keep the office rolling and profitable. With that knowledge, your prices have conviction. Awareness of what the competition is charging and what the market will bear will also help you find the right client and/or project matches. Be willing to walk away from the wrong ones and have confidence that better clients - the right match - will come along."

Maria Piscopo is the author of The Graphic Designer's & Illustrator's Guide to Marketing and Promotion (Allworth Press, www.allworth.com).

Reprinted with permission of STEP inside design, www.stepinsidedesign.com.