Don’t Advertise Your Prices

By November 6, 2020November 7th, 2020No Comments
“I need some help coming up with my price list.” I’ve been asked this question several times over the past couple months. Every time I am asked, I cringe just a bit. Rate cards, price lists, and packages are not the path to growing a successful, high profit creative business. Custom work for custom clients is the best way to go.

There is a hierarchy of purchase decision-making. On the bottom of the hierarchy is “Price.” Some people are shopping for the best price and even though your quality and the customer experience you provide may be better, they won’t pay more to work with you because they want the cheapest price, no matter what. We don’t want these people.
However, when you advertise your prices, you attract these price shoppers. For example, if you advertise $99 logo and another person advertises a $98 logo. You lose the sale before you even get a chance to speak with them. This is not a good business. (Unless your goal is to crank out 1,000 logos per year at $100 per logo to yield annual revenue of $100,000, then I wish you the best. I personally don’t recommend this business model.)
Next up the list is “Convenience.” If you can get it done faster and with better customer service, some clients will pay more for the convenience of choosing you for the project.

“Quality” comes next. If your deliverables will deliver better quality and result in a greater return on investment, some clients will pay more to work with you even if your price is higher or it takes more time. This is where good business starts.
Next up the hierarchy is “Relationship.” If you follow any of my content, you know I am a big proponent of relationship based sales. This is because I know that many clients will choose to work with you based on their trust in your relationship EVEN IF other people can do it better, faster, and cheaper. I built my agency on relationship based sales. This can be a great business.
Finally, “Reputation” trumps all. Paul Rand, Michael Beirut, Stefan Sagmeister, Milton Glaser etc., they all made a name for themselves and some clients choose them, paying top dollar for the privilege of working with them due to their great reputation. Build an amazing reputation and you will unlock the key to the highest prices and most premium clients. This is where the biggest money is, but it is also hard to achieve. Building an amazing reputation takes time, skill, and consistent effort. “Reputation” based selling is a great goal for your career, but for most people, selling based on relationship is usually a faster way to get higher paying clients.
Considering this hierarchy, I strongly advise against advertising your prices because it encourages your potential client to make their purchase decision based on price (the lowest level purchase decision), rather than any of the other considerations that would yield more revenue for you and better results for them. Additionally, there is a legitimate, psychological reason for presenting your price last.
The sequence of price and product information has an influence on consumer decision-making. When the price is presented first, people base their purchase decision on economic value, according to a 2015 study. (Cost Conscious? The Neural and Behavioral Impact of Price Primacy on Decision Making, Uma R. Karmarkar, Baba Shiv, and Brian Knutson, Journal of Marketing Research, 2015) Whereas, if the product or service is presented first, people make purchasing decisions based on the quality of the product.

Instead of advertising prices, what should you do?

  1. Don’t advertise with a price list, rate card, or service packages. Your clients have unique businesses with custom problems, you should solve them with custom solutions.
  2. When a client asks you for a rate card or price list you can simply respond, “Thanks for asking. We don’t have a price list. Every client’s business faces unique challenges. We take time to understand your custom needs and then provide you with a custom approach and price specifically tailored to help your business. When can we have a discovery meeting to discuss the needs of your business?”
  3. In the discovery meeting, take time to uncover their needs. Next, prepare a proposal. Walk your client through your proposal. Explain the work you will do and how you will solve their business problems through your creative solution. Show them examples of how you have successfully done this in the past. Then, after they are sitting back in their chair thinking to themselves, “I like this solution,” you present your price. With this approach you will close more sales at higher prices than selling based a price list.


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Michael Janda

About Michael Janda

I am Michael Janda, an executive level creative leader with more than 20 years of experience in both in-house creative departments and agencies working with some of the greatest brands in the world. I create books, courses, workshops, lectures and other training materials to help designers level-up.