How to value your work

Why is it important for creatives to understand the business of design in order to succeed?

Creatives who don’t learn how to talk about money and business’ needs will be relegated to undercharging and being “order takers” to which their clients dictate what to do and how to do it.

Most creatives are trained to think about craft and mechanical skills. Some are taught to think critically. Even rarer are creatives who delve into aspects of business: marketing, sales, strategy, negotiations, culture and customer service. These are critical elements necessary to be a “whole creative” vs a “hole creative”.

The challenge for 21st-century creatives is to have a seat at the table, amongst the decision makers, to be able to apply their creativity towards solving more impactful problems.

What is the difference between cost, price and value?

There are three words that creatives mistakenly use interchangeably: cost, price and value. Cost is the amount of inputs incurred in producing a product or service. Price is what you pay for goods or services (cost plus profit). Value, on the other hand, is defined by the customer and varies from person to person. When I refer to creatives finding their value, I’m drawing a line between what it “cost” to make something versus what a customer is willing to pay for it.

Far too many creatives determine value based on cost (which do not have a relationship with one another). Something that costs very little might be very valuable to a customer. For example, a sentimental item (photograph), might cost little to produce but has great value to the individual.

Another example is to consider the price of a work of art. The market, aka the buyer, determines the price. Famous works of art are sold for tens of millions of dollars, while the cost (labour and raw materials) is relatively tiny in comparison. We seem to be able to reconcile this for “art” but are uncomfortable when it comes to commercial work. Why is that?

What’s the biggest struggle people face when pricing their work/valuing their work and how can you overcome this?

The struggle is from a few things. One, creatives produce amazing work with relative ease. It’s not difficult for them and requires little effort, which leads to the feeling of guilt or dishonesty from being paid a large amount. They equate effort with value. They rationalize that the harder they work on something, the more valuable it will be.

Conversely, something that takes little time isn’t that valuable.

What creatives totally miss is the buyer. The buyer sees different value in the work that is produced. For them, having a new logo that accurately captures their core values, direction and strategic vision is worth 10x or even 1000x of what they are charged. Furthermore, working with a reputable creative gives them piece of mind and a feeling of prestige that they are working with someone of very high calibre.

What are your top 3 pieces of advice for pricing your work?

The 3 tips are:

• Determine what problem is valuable to the client to solve and then solve it – price the client and not the service.
• Provide pricing options
• Anchor high.

What tips do you have for people who find it hard to talk about money with clients/customers?

Be unemotional when it comes to talking about money. Whoever wants it more cedes the higher ground in the buy/sell cycle. Realize that both you and the client are trying to determine fit, and one such factor is price. By not talking about budget, you are essentially making it difficult for the client to decide if you’re a good option for their needs.

Read “Win Without Pitching Manifesto”, “Pricing Creativity” and “Never Split the Difference.” We also have several videos which dive into the psychology of pricing, how to do it and how not to make in uncomfortable on our YouTube channel.

Birmingham Design Festival workshop images by Fraser McGee