Education

How to win more pitches as a creative freelancer.

“We decided to go with another agency,” once again we weren’t selected for the project. “Ahhhhhhhhhhh!!! We thought we had the project in the bag. Why were we not chosen?” Every freelance designer or agency owner has been there, and probably more than once. The reality is that, as the adage states, “You can’t win ‘em all.” However, you can improve your chances of winning pitches for new work with a few smart techniques.

1. Discuss the client’s needs.

Most designers have decent enough skills at presenting their work. And, as a result, they do an admirable job of walking a potential client through their portfolio of past projects. This has become the default culture for designers. Unfortunately, it is a flawed strategy. You must resist the initial urge to talk about yourself and first discuss the client’s needs.

Potential clients are only interested in what you have created for others as it relates to what you can create for them. WIIFM? (What’s In It For Me?) is on their mind with every page you turn in your proud portfolio. Before you present one piece of work take some time to ask a few questions.

“What is it that you are wanting to create?”
“What problem are you trying to solve in your business?”
“What is the message you are trying to communicate with the project?”
“What are the results you are hoping to achieve?”
“Have you tried creating something like this before? How did it go?”
“Have you tried solving this problem in other ways? How did that go?”
“What are some of the concerns you have about the project?”
“What has your past experience with other designers been like?”

Take careful notes and plan to address their needs in your pitch. It is helpful if you gather this general information prior to the pitch meeting. However, it is not uncommon to have to do it on the fly.

2. In a follow-up meeting, present your plan to execute on their project in detail.

Now that you know what the potential client needs it is time to prove to them that you are the best choice to do the work. Lucky for you, you now have an opportunity to strategically show off your fancy portfolio. To help illustrate how this conversation should flow, here is an example assuming the potential client needs to create a brochure…

“Thanks, for the info. I think I have a clear understanding of the brochure you are hoping to create. I’d love to take a few minutes to explain to you how your project will go and to show you a few examples of similar projects.”

“First, I’ve learned over time that it is important to embark on an in-depth kickoff and strategy phase for a project before we design anything. So we’ll start by gathering all of the text and images you want to include in the brochure. We’ll organize this information and prepare some wireframe layouts to establish the size of brochure necessary for all of the content you are hoping to include. Here are some examples of what that will look like.”

(Show off examples)

“Next, we’ll begin designing the look and feel of the brochure. This is the fun part when things really start to come to life. We’ll present you with three initial comp ideas and discuss your feedback. You’ll be able to tell us what you like and what you don’t like for each comp. Your feedback is critical because ultimately this is your project and we want to make sure you are happy with the design. We’ll take your feedback on the initial comps and refine them into a finished comp during two more rounds of comps and feedback. Here are some examples of past brochures we have done.”

(Show off and discuss portfolio examples that prove your capability to execute on their project)

“Finally, we will prepare your final design for press and we will coordinate everything for the printing. If you have a printer you like to use, we will be happy to work with them. Otherwise, we can get some printing quotes for you. We’ll also go to the printer and do press checks to make sure the colors and print quality meet expectation. All in all, we’ll take care of the printing coordination to make sure this part of the project goes smoothly.”

(Share testimonial about your abilities from a printer you use)

Obviously I have shortened up the actual conversation a bit for the sake of this write-up, but take careful note to the tone and presentation strategy. Several other items from the questions in point 1 could also be addressed while discussing your execution strategy. Keep in mind, you do not give them the solution here! You should charge for the solution! In this proposal presentation you are walking them through the process you will use (and charge them for) to create their solution. Your focus should be on addressing your potential client’s needs and answering their “WIIFM?” questions they are likely asking themselves as you speak.

3. Discuss results.

The final items that should be discussed are results. For a designer, creating a cool design is result enough. But your clients will want more. As appropriate to the project, share with your potential client your thoughts about how the work you create for them will:

Improve their brand image
Drive traffic to their company
Improve sales conversion
Increase customer retention

This is also a great time to share with them the results your other clients have achieved with projects you’ve created. It never hurts to share things like…

“I designed this brochure for a client to hand out at a trade show. They generated $X,XXX of sales from the show.”

(Be sure to always ask past clients for their results or a testimonial to share in your pitches.)

Certainly, this is not the only strategy for pitching projects and there are plenty of additional discussion points that could be included. Next time you are invited to pitch on a potential project, don’t fall into the trap of just presenting your portfolio of work and hoping for the best. (Let your competitors do that.) A little preparation and a little more focus on the client’s needs can go a long way to helping you win new work.

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I continue to receive amazing feedback from students of my Freelance with Janda courses. Thank you!

“Before taking Freelance with Janda, I actually spent a ton of money on another business courses where I didn’t really see the results or get my money’s worth. After doing the first module for free, I was hooked and paid for the rest of the course right then and there. Michael has a way of speaking where he makes you feel like you can do this! Every module is in-depth where he breaks it down for you, walks you through with examples, and solidifies the lesson with stories from his own experience. Originally when I got into freelancing, I was like a headless chicken trying to figure out why my business wasn’t growing. One of the major things that the course helped me with was learning how to focus, niching down (and actually how to do it), and actionable advice on how to find, nurture, and deal with clients. Wherever you are in your business–thinking about it, stuck in a rut, or scaling, I think everyone has a lot to learn from this course!” – Crystal Kam, Visual Designer, http://www.crystalkam.ca

“Enrolling in this course was one of the best decisions I could have made for my freelance career. The price is a steal for all the resources, knowledge and guidance you receive. I was pleasantly surprised with all the detailed templates too! Before this course I was overwhelmed trying to figure out everything on my own, but now I have the ultimate guide!” – Samantha Esposito,CEO of Creativ Wings, http://www.creativwings.com

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COURSE: Freelance with Janda
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Michael Janda In Business, Education,

When should I charge my client hourly vs. fixed price?

Hello Team! Hope you had a great week! This week I’m sending you a few thoughts on a questions I’ve receive several times. Hourly vs. fixed bid pricing. Hope you get some good nuggets below!

QUESTION:

When should I charge my client hourly vs. fixed price?

ANSWER:

Every project that can be bid at a fixed price, should be.

I recommend you only charge clients based upon a billable hourly rate when you provide services that cannot be completed under a fixed bid agreement. These types of services include, but are not limited to:

Extra rounds of changes on a project
Maintenance requests for digital projects
Simple design changes
Minor content updates
Debugging code
Unknown or unclear scope of work

Trading time for money (i.e. charging your clients by the hour) is the least profitable way to price your work because it eliminates the value of the work you produce and penalizes you for working quickly. When charging a client based upon an hourly rate, the faster you complete the work, the less money you make.

On the other hand, properly scoping and providing fixed bid prices allows you to factor both market value and the client’s budget into your price. Perhaps best of all, in contrast to charging your client by the hour, a fixed bid price rewards you for working quickly by increasing the financial return on your time.

All of that being said, many clients will ask for your hourly rate, and you should know how to calculate it. Simply stated, your billable hourly rate is your hourly burn rate (or your hourly cost to do work) with the addition of profit.

Here is a quick method to help you calculate your hourly cost to do business.

How much does your business cost per month? (Add up all of your expenses including the money you need to take out of your business to support your personal living expenses.)

Multiply your monthly expenses by 12 months in a year.

Divide that amount by 2,080 for the amount of “work hours” per year for a full-time worker. (This is based on 40 hours per week and 52 weeks per year.)

That calculation will yield your “hourly cost” or “hourly burn rate.” Keep in mind, this IS NOT the rate you charge your clients. This should be considered your “break even” rate as it does not include any profit.

My book The Psychology of Graphic Design Pricing and my course Freelance with Janda both go into much more detail about how to calculate your hourly burn rate. The method in this newsletter is just a simple method you can start using now. Next week need to add profit to our rate.

Profit margins vary wildly from business to business. I have been told that many agencies operate at very thin profit margins, as low as 1 or 2%. My agency, Riser, ran at a 31% average annual profit margin over our lifespan. The publicly traded “mega-agencies” typically report profit margins between 5 and 10%. Mid-sized agencies may average 15 or 20% margins and some agencies could have a 50% margin or higher. A well-seasoned freelancer working from their home office with very little overhead cost could easily have a 100-200%+ markup on their hourly burn rate. The industry profit margin is really all over the place with no set standard.

Now you may be thinking, “So, how much profit should I add to my cost when calculating my billable hourly rate?” Good question. Your billable hourly rate should include as much profit as your clients will approve. Making this determination usually requires some experimentation, an understanding of what other people like you charge for their time, and a bit of courage.

If your hourly burn rate is $30, but your clients will pay $150 per hour for your services (a 500% markup), have no concern charging it. After all, the market value of a product or service is equal to the amount someone is willing to pay. If your clients will pay it, you can charge it. That is your market value.

You really just need to pick a profit margin percentage that is comfortable to you; this percentage should start, in my opinion, with at least a 20 to 30% profit margin and go up from there. You are not price gouging your customer if you decide that your profit margin should be 100%+ higher than your hourly burn rate. If you have the expertise to provide value to your customer and your customer will green light work at a higher hourly rate, then charge it! After all, you are in business to make a profit.

Stop asking yourself, “How much should I charge?” and start asking, “How much profit should I include in my price?”

Hope that helps provide some clarity around hourly pricing and fixed bid pricing. When in doubt, a fixed bid project price with a detailed scope of work is the best strategy for your business.

Thank you!

Mike

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I continue to receive amazing feedback from students of my Freelance with Janda courses. Thank you!