Freelance Pricing: A Case Study
Today I’m coming at the question of how to price freelance services from a different perspective. This time I’m the client, not the service provider.
When you freelance, you clearly aim for the sweet spot—as high a fee as possible without overpricing to the point the prospect walks.
But as the customer, I don’t share that objective.
This is the story of how I contracted with a design professional for Stand Up 8 Times, the business I launched January 1, 2009.
My designer works only by the hour and that was just fine with me.
Specifically, we agreed upon an hourly rate (a U.S.-based (not third world) rate in the higher double digits) which applied to all work. I paid a retainer at the beginning that she applied to all work until the initial deposit was depleted. This was followed by frequent invoicing at my request. (I like to receive small invoices so I’m never surprised by a large bill.)
Fortunately, she billed for time worked in small increments when that was the case rather than billing for a half-hour or even full hour when doing the smallest step along the way. I took her time records at face value—they seemed fair, even generous towards me.
Here’s why by-the-hour billing worked perfectly:
I was highly motivated to limit the amount of time required. For starters, I submitted perhaps 95% of the copy in a highly polished state and didn’t revise it. However, there were a lot of changes in terms of design, layout, names for links and web pages, etc.
Logo design in particular can devour huge amounts of time—and it did! Even though I went into this with a strong understanding of my business, target market, color preferences, etc. In other words, it could have been worse.
There was a lot of back and forth throughout the creative process. I was highly satisfied with how we worked together and the results.
If we had a flat fee arrangement, we could never have collaborated as much as we did through the creative process. She would have had to put her foot down to achieve a fair financial return on her end.
We didn’t need to define the conclusion of the project. It started with “look” and logo and went on to include creating the website, the newsletter, the blog, business cards and getting me started on using Aweber and Wordpress. Then we smoothly transitioned to website maintenance, special projects and other tasks that came up on an ongoing basis.
Anyone see any problems with this?
I don’t (and neither does she), but there seems to be a lot of criticism of this arrangement in the freelance world.
Many freelancers are opposed to pricing by the hour, claiming that it somehow commoditizes their work and doesn’t offer them the upside potential of a specified price.
What do you think? Your comments are invited.
P. S. By the way, my web designer and artist is Julie Winsberg. She is a joy to work with and I highly recommend her.
Inserted link will be: http://www.bluegreenrainbowdesigns.com
Originally posted 7-20-09