Raise Your Rates

Uncomfortable Questions About Pricing

0:00Hey, everybody. Welcome back to the DP Graphic Design Cast. I'm Nick Longo. Just returned from Cleveland, Ohio for a fantastic crop-inspired field trip that they put on. And it was three days, 50 creatives, exploring a new town, checking out creative offices of both the

0:30Guardians baseball team, Rock and Roll Hall of Fame, and then just countless fun little things that we got to do throughout the week. It was a great chance to see a ton of old friends and make so many new ones. Hello to a lot of you. Hopefully you're checking out the podcast as well. The cool thing we did was on the last day, we had everybody in a room and we figured with 50 creatives under one roof and perfect kind of number, right? We were chatting about things that kind of, you know, keep us up at night or those things that we want to improve

1:03on and could have been a seasoned, you know, nine to five creative or the freelance person that runs their own business and money, pricing, salaries, all that thing just seemed to be the big thing that we all really circled on. So it was perfect timing because weeks before that I had started building this presentation and this episode that I wanted to kind of tackle. And it was perfect timing because we talked about it so much and I got home and raced to the computer to kind of do the final touches on this. And I think it's just perfect timing

1:34to talk about it. So let's start with a really uncomfortable question. I want you guys to think about when was the last time that you raised your prices? And I don't mean you added that extra hundred bucks because the project got a little bit bigger. I mean, you actually decided I'm worth more now. My experience has increased. My ability has increased. My clients have gotten better, maybe even bigger. I started noticing I'm faster at solving problems and I'm more confident when I

2:04present. I've made mistakes and I've learned from them and I can see problems coming that I couldn't see five years ago. So therefore, you know, I cost more. When was the last time that you did that? Because I think there's a really weird thing that happens to designers. We spend our entire careers trying to improve absolutely everything about ourselves. We're trying to make that portfolio and the work and the process better. We've done much better presentations. We're looking at bigger and

2:36better clients and look at the business skills that you've kind of acquired over the years. But somehow the price stays exactly the same. And I started thinking about this recently, not only after this last week, but a few talks that I saw about pricing and the perceived value. The argument I was looking at was basically this. Price isn't just what something costs. Price communicates something about the thing that you're buying. And that got me to think about us as designers because I think a lot of us are waiting for somebody else to give us the permission to charge more.

3:13We want the market to tell us. We want our clients to tell us. But that call is just not coming. Your client isn't going to say, could you resend this estimate with a little higher number? We're a little worried about you. That's, that's your job, right? That's our job. So here's the question. I want to get into today. What if the thing keeping your prices low, isn't your clients? What if it's you? So let's dig into

Pricing From Fear

3:42it. First up, you might be pricing from fear. There's something I've noticed after talking to so many different designers over the years. We're incredibly confident discussing somebody else's price. I've been a part of those conversations a lot, right? A designer might tell you that they're charging $800 for a logo and you immediately go, dude, like you need to charge more. I said that a few times over the last week. Easy. Then somebody asks us about our price and suddenly we're like,

4:14oh, well, I'm not too sure. You know, they're a small company. I don't think they're going to pay this. I didn't know their budget. What if they say no, right? What if another designer charges less? And before the client has even said anything, we started negotiating ourselves down. We're having the negotiation without them. Maybe you've done this. I have many times. You calculate the project and think this should roughly cost, say, six grand. Then you stare at that. 6,000 feels a little bit

4:44high. What about 5,500? Maybe next thing you know, you're all the way down to 4,800. That sounds safer. And then you send the $4,800 and the client responds. Sounds great. When do we start? And immediately you think, oh shit, they would have paid more. Here's the first thing that I want you to stop doing. Stop deciding what your client can afford for them. Your client's wallet is not your wallet. You might say, I couldn't imagine paying $10,000 for a branding, but you're not buying branding.

5:18You're selling it. Your client might be launching a product that they expect to generate millions of dollars with. They might be opening their fifth location when they approach you. They might have hundreds of thousands of dollars in marketing budget. And you're sitting there thinking, I don't know, five grand sounds like a little bit too high for a logo. To you, you're pricing from your own relationship with money instead of understanding theirs. What if the next time you build that estimate, instead of asking, what will they pay? You ask, what should this cost? That's a very different

5:53question. Next up, price is part of the message. Now here's where pricing can really get a little bit interesting because price isn't neutral. It communicates. People often infer things like quality, scarcity, and seriousness from price before they've even experienced the product or the service. That doesn't mean expensive automatically equals good, but price can influence expectations before the experience even begins. Think about that in terms of design. A potential client talks to

6:27three designers. Designer A says $2,500. Designer B might say $6,500. And designer C comes in with a confident 14 grand. Now imagine the client doesn't know how much you do design, how long you've been doing it. They don't know much maybe even about the industry. They're trying to figure out what's the difference. Why is this person 14 grand? There must be something different. Maybe there is. Maybe there isn't. But price has already entered the conversation about value. Now flip it around. What if your number

7:03is dramatically lower than everybody else's? We assume the client's thinking, what a deal, right? But what if they think, why is this so cheap? We're terrified that charging more will make clients question us. But sometimes charging less, I think, makes them question us too. There's another problem with being a little on the cheap side. If you're positioning yourself as the low cost option, you can unintentionally train the relationship around price. I have been a part of that so many

7:35times where I came in low. And guess what? Money became a part of every conversation for that part on not the strategy, not the client, not the customer. Everything becomes how much is that? Is that included? Can we shave some time off? Can you throw this in last minute? Because price was the reason maybe they chose you. The point is simple. Your price is part of your positioning. Make sure it's saying what you want it to say. All right, next, you're probably not the designer you were five years

8:08ago. Here's another thing I want you guys to think about. What actually are the clients buying from you today? So what are they buying from you today? Because if you're doing this for 10 years plus, or however long you've been doing it, they're not just buying the hours you spend making this thing. They're buying those 10 years or however long you've been doing it. They're buying pattern recognition. They're buying speed. They're buying judgment. And they're buying the fact that you know which direction not to explore. They're buying the fact that something can go wrong and you will

8:43have it all under control. That's the value. There's an irony there though. As experienced designers, we often get faster. And then we punish ourselves financially for it. A project that maybe took you 30 hours five years ago might take you 15 now. Why? Well, because you're better. We talked about that earlier. But if you're charging purely by the hour, you just became twice as good and potentially cut your revenue in half. You're not selling the same service you were selling five

9:15years ago because you're not the same designer. Maybe you're still charging based on the person you were when you were desperately seeking new clients. Maybe your price was created when you didn't really have the portfolio that you wanted. Or maybe you just picked $75 an hour because you heard another designer told you that and that's what they charged. And then you just kept doing it. You didn't change anything. Meanwhile, everything else around you changed. If you're independent, your pricing has to support your business. Your freelance revenue has to cover expenses, taxes,

9:50downtime, all the software you need, equipment, insurance, non-billable work, and everything else that comes with running one. So maybe the question isn't, am I expensive? Maybe it's, does my pricing actually make this sustainable? All right, next, new clients. This is the easy one.

Raising Rates For New Clients

10:12Let's get practical. There are two completely different conversations here, right? There's new clients and there's existing clients. And the new clients one, well, it's a lot easier because the new client, guess what? Doesn't know your old prices. They don't know what you charge for that last project to that last client. They have no pricing history with you. So here's my challenge. Raise the number. Consider going back and listening to an old episode. I'll try to link it down below. Well, we had the test pilots for younger creatives all double their rates and they all did it within,

10:47I believe a three month period recorded their entire process moving forward. They were all successful with it. It's a great way to look at it and say when a client, particularly a new one has no idea what your history was, you can try it out and it might just work. Those reactions they got, the discomfort that they got, the bigger numbers and how they had to say it, it all paid off. Now, I'm not just saying everybody listening right now should immediately go double your prices tomorrow, but test it out. What if your next three proposals were 10% higher, 15% higher,

11:22maybe 20% higher, pick something that makes sense for you and where you are right now. And here's the important part. That number should make you feel just slightly uncomfortable, not terrified, just a little uncomfortable. Now, here's the hardest part. When they ask you what it costs, get comfortable with this. Say the number and then stop talking. Don't say this project would be $8,500, but obviously we

11:53can adjust things as you kind of absorb it. No, no, no, no, no, no. Don't say that. No, don't say it. It's $8,500. I know that's probably a higher rate than you were expecting. Stop. Quit making excuses. They haven't said anything yet. You're kind of negotiating against yourself in a serious situation like that. Say something like this. Based on the scope that we've discussed, the project investment, key word, investment, not price, not fee, not estimate, not dollars, investment. It's $8,500.

12:30Then shut up. Let them process it because there's something I want you to remember. Your client cannot agree to a price you're too afraid to ask for. Maybe they say yes. Great. Maybe they want a little negotiation. Fine. Maybe they say no. Also, very useful because pricing is testing. You're learning what the market will support for your work, your clients, the reputation you put on the table,

13:02and your positioning. What if they say no? Let's stay here for just a minute because this is the fear, I think, that's underneath everything. What if they say no? We need clients. We need revenue. Bills are real. I'm not suggesting you blow up a healthy business right now because you want to prove something, right? But we have to separate two ideas. A client saying no to your price and your price being wrong. Those aren't automatically the same thing because maybe they can't afford you. Maybe

13:38they're not the right client at this point. Maybe your business has evolved. There's a question I really want all of you that run your own business to sit with. What if keeping every client isn't the goal? Because we treat 100% close rates like success. But if practically everyone you quote says yes immediately, could it also mean you're leaving money on the table? Possibly. Maybe you raise prices and close fewer projects, but make more money. 10 projects at, say, $5,000, well, that's going to give

14:12you $50,000. But eight projects at $6,500 will give you $52,000. Guess what? You did two fewer projects and made more money. Now you've created more time. That time to maybe improve your work, work on your portfolio a little bit, time to find better clients. Pricing isn't only about making more money. Sometimes it's about buying back capacity. Next, current clients. Ooh, this is the

Navigating Increases With Current Clients

14:43awkward one. So talking about these existing ones, this is a little bit harder because they do know the old number and they're going to remember it for sure. And sometimes they've been paying it for maybe years, right? But businesses change prices. We all see that. Maybe even your vendors change prices, right? Your software subscriptions, your streaming services, your rent, your accountant's rates. The world understands that prices don't remain frozen forever, except apparently graphic

15:15designers. We somehow believe we've entered into a blood oath with the rate that maybe we have established back in 2019. You're allowed to change it, guys. Man, that key is how, right? So first, give notice. Don't surprise them with this higher invoice all of a sudden. Pick a date, something, you know, give them a 30-day, 60-day kind of notice, whatever you feel is appropriate for that relationship. Second, don't apologize for it. There's a huge difference between being gracious

15:50and apologizing. You can say, hey, beginning January 1st, my rates will be increasing to reflect the scope and the level of work I'm providing today. I wanted to give you a complete advance notice, and I really value the work that we've been doing together. That's a professional business communication. Third, honor what's already been agreed to. If you've already quoted a project, obviously, honor that quote. We're talking about any future work with them when it comes to what you're going to do with that proposal and that email to them. Fourth, decide whether every client

16:25gets the same increase. Maybe your favorite long-term client gets grandfathered in temporarily, right? Maybe they receive a smaller increase. Maybe you move them up in phases. That's business strategy. But make it a decision. Don't accidentally undercharge somebody for another six years because you were afraid of one slightly awkward email. And maybe this is the question. What if your best client already knows that you're worth more? What if you've been stressing about this conversation for six

16:58months? And they respond with, sounds good. Thanks for letting us know. Give them the opportunity to surprise the heck out of you. Next up, raise your rates, raise your experience. Super good to think about, right? Because there's a dangerous version of charging more. You increase your prices 40% and you change absolutely nothing else. But does the client know your worth? If you want premium pricing, examine the experience around the work. How quickly do you respond? How good is your proposal and your

17:32process and your presentation skills? Do you organize those meetings? Do you hit deadlines every time? You know, can you explain your decisions? Do you make life easier for your client? Price is all part of that brand. Higher prices create higher expectations. And that's good. Rise to them. Maybe raising your prices is actually the thing that really forces you to tighten your process. Maybe you improve your onboarding. Maybe you start presenting in great slides rather than just emailing a bunch of JPEGs. Maybe you create

18:06better boundaries around how many revisions you're going to do. Maybe you communicate like the professional person you have with this new prices that say you are. Don't fake premium. Become better at delivering it. All right. Next up. This is the price increase audit. I want you to pull up the last five projects that you did. Look at what you charged. Then ask these five questions. Number one, if that exact project came through your doors today, would I quote the same amount? If the answer is no, then why are you

18:38still using that number? Number two, what has improved about me since I established that last price? Your experience, your speed, your strategy, your communication, results? Write it all down. Number three, am I pricing based on value I provide or based on what feels comfortable for me to ask for? Be honest on that one. Number four, which current clients need a pricing adjustment? Not someday. Write those

19:10names down, the actual clients. And number five, what number would I quote my next new client if I wasn't afraid that they'd say no? There's your number. That's the one to examine. Maybe it's too high. Fine. But I bet for a lot of you, that number isn't insane. It's just higher than the number that you've gotten comfortable in saying, well, guys, I hope this was helpful. Here's what I want you to remember. Raising your prices is not about ego. It's about recognizing that businesses, including

19:41yours, can evolve. And if you've been doing this well for years, you have evolved as well. Your experience has value. Your judgment, your efficiency, your reputation, all has incredible value. So stop charging like the designer that you used to be and stop waiting for someone to give you permission. Guess what? I give you permission. All of us give each other that permission. Maybe you've been saying I'll raise my prices after I land one more big client. What if you raise them before that big client? Maybe

20:16you're thinking I'll charge more when I'm confident enough to say that number. What if saying that number now is how you build that confidence? Maybe you keep telling yourself, my clients would never pay that. What if they've never really known because you've never asked? All right, here is my challenge for you guys. The next new client who asked for a proposal, increase the number, not recklessly, increase it because you're taking an honest look at what you provide today. Make the number slightly uncomfortable,

20:47send it. And then when they ask about that cost, say the number, don't apologize. Don't immediately discount it, say it and let there be silence for existing clients. Look at who hasn't seen a rate adjustment in years, make a plan, pick the date, give them notice, be gracious, be professional, but do it because there's a point in your career where continuing to under charge isn't humility. It's

21:17just bad business. You got better, your work got better, your experience got deeper, and your value, it went up. So maybe it's time your price has caught up. Raise your rates and I'll talk to you guys next time. If this conversation helped you think a little longer term about your creative career, hit like and subscribe. It helps more than you think. And if you know a creative who's trying to figure out their next move, share this with them. That's how we get this community to grow. Thanks.