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Underpricing turn around and rough price.

Discussion in 'General Business Forum:' started by thematthewbrennan, Jul 9, 2013.

  1. Ok this is a two fold question I am just throwing out there!

    1: If you (like nearly everyone when starting out) underpriced a client, that keeps bringing reasonable work. How do you transition for undercharging him to charging enough without losing him, or making him refuse to pay because all of a sudden your 5-6 times more expensive.

    2. I used a cost per day estimator which takes into account your area, age, experience and it said I should charge 200£ a day. This seems a lot to ask for. For example I recently done a 36 page product brochure and it took 5 days work. That would be 1000. That seems a lot to be asking a client for who is probably expecting a 100-200 bill.
     
  2. jooty

    jooty Active Member

    1 - Its hard to do, especially with clients that are aware of existing rates (even if they are too low)

    2 - I think that you turned the project round in a very reasonable timescale, £1000 for that is not excessive.
     
  3. Coffee_and_Toast

    Coffee_and_Toast New Member

    Try and put all the cowboy offerings out of your mind when you're pricing anything, there are thousands of people who are willing to undercut you (and do a shoddier job) but you have to trust that a client will spot this and avoid them. Chances are if they don't then they're probably a client you wouldn't want to work with anyway.

    The real value you'll have is in your existing relationship with the client; they know what a good job you do and how well you work with them, so don't be afraid to level your prices out if you started out under-charging them. Your client will shop around and find similar prices from similar designers & much lower prices from the afore-mentioned cowboys. If you've worked well in the past I see no reason they would go elsewhere.

    You could handle the transition by staggering payments at the new rate? Either increase your initial deposit for a project or set payment dates for certain increments? Just remember to pay attention to your own cashflow as much as you try to help your client out with the new prices =)

    (also DRD is right, £1000 for a well-designed 36-page brochure in 5 days is a very reasonable price)
     
  4. Dave L

    Dave L Well-Known Member

    This - as you've correctly identified - is the issue with coming in cheap to secure work in the early days: how do you break free from an established low rate once you've gained the confidence to demand a living wage? I don't know if you actually charged £100-200 for what we can all agree would be fairly priced as a £1k job but, based on my 7.5hr working day, that equates to somewhere between £2.66 and £5.33 an hour, both of which amount to less than the national minimum wage (dramatically less in the case of the former). Obviously, you can pitch to new leads at any rate you like but, with existing clients, I think the only way to pull it off without driving people away is to readjust at regular intervals over an extended period (and making up that kind of a gap is going to be a long haul). Depending on your relationship, you might want to explain the situation and see if a better rate can't be negotiated more quickly but the truth is that you're caught a trap you laid for yourself (which is not to say that it isn't a common or easy mistake to make). If the client doesn't want to play ball, you may conclude that the relationship has served its purpose in terms of building up your skills/knowledge/confidence and that you want to court a better standard of client in the future - there's no reason you can't escape the trap but the low-rate gamble does come at a cost, at least in the short term.
     
  5. This is all what I thought guys. Thanks for all the input. The problem was I went from working full time and taking on side jobs, to fully freelance. I was very happy to accept a few hundred for the odd job when I was working. Now much more is needed!

    For the booklet, 1 weeks work was put into it, but it has been about 3 weeks on and of, with the client making small changes, sending product pictures and waiting on the printers.

    I would love to be charging him 1k, I know however he would not pay that! Any tips, other than putting prices up on the site (Which is a no no I believe) to finding better paying clients, and letting them know your rates without scaring them away?
     
  6. Katedesign

    Katedesign Well-Known Member

    It's all been said above - but just put up the price gently every time you can and when the pain hits him he'll leave - or he'll realise that you are doing a good job and will stay with you.

    On the 36pp brochure you can often get price by saying X amount per page + initial design/layout design charges.... which at say £20 per page + £250 works out at about £970.... or £1K. The faffing about with changes - unless they are major are just part of the pain of being a designer! Though after a huge number of changes you do have to start charging.
     
  7. Great, thanks for the info guys. Going to charge around £600 I think, pains me!
     

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