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Tuesday, 08 September 2015 02:38

You Are Too Expensive

You may not run into this problem and if you don't then that's great but I suspect you do, as do a great many designers and here's how I handle the issue when it comes up.

First though, why do clients think your services are too expensive...?

Perceived Value

The perceived value of a product or service is directly propertional to how much a client is willing to pay and broadly speaking can be broken down into one of two categories:

  • It’s a great price, when the perceived value is higher than the price
  • It’s too expensive, when the price outweighs the perceived value

The perceived value of a product or service is very subjective, individual and can influence the purchase or rejection of a product or service very quickly.

Redefining The Perceived Value

Imagine you walk into an electical store to buy a frige freezer. Now you probably already have in mind an idea of a price that you're willing to pay and I guess you'd also expect certain features for that price, no...? Well how about the first one you see is twice the price you expected to pay so you carry on looking around, no? But that wonderful super fridge you saw has set a bench mark, not only in price but also infeatures.

Now imagine you look at that super fridge again and see all the additional features you'll get which in your mind far outweight the additional cost. The èrceived value of that fridge has just increased.

In effect that fridge just made a value proposition by showing off its wonderful features as you walked in the door.

Value Proposition

This is where designers can really set themselves apart. If for example a client needs a newsletter system now these can be quite costly. However, I set these up every week so for me it's an easy task. Time consuming yes, but still easy as I'm doing it regularly.

The value proposition for me is simple: I add in a newsletter feature (normally costing arounf $300) and show the client how this can increase revenue far in excess of the cost of their design.

Comapred Value

This is different to comparing prices as most people will compare apples and pears. A hand coded design is significantly more expensive than a templatised design for example (and most people get that). I simply have to explain the differences in terms the client can understand.

Getting a Budget

getting a budget from a client is paramount for me. It gives me something i can work with. It helps me gain a handle ona number of things such as whether or not they have an internal resource I can work with, how much they need to outsource and how invested the client is in the project. All of these factors and many more have a direct impact on the pricing I provide.

Recognising the Value

Once a client recognises the value of what you can do for them the price actually becomes irrelevant. So much so that they want to spend more with you.

Reduce your price at your own peril, you could end up working for free or worse, under deliver and destroy all your clients' expectations. Better to err on the side of caution me thinks.

One thing I know for sure: If you over deliver and increase revenue for the client the price becomes a non issue and you do end up working with that client for years to come.

Additional Info

Last modified on Monday, 07 September 2015 17:09

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