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Design on a Dime
By: Art Javid
For so many years, we have been strong opponents of designers who cut their prices dramatically, and in turn devalue the work of the rest of us. It has been (and still is) my strong belief that the design industry must abide by certain ethical and business standards (policies, pricing, etc.) in order to maintain and improve our standing in the business community. So how can the design industry – especially those of us who are freelancers – uphold our prices through these tough economic times, if it means the difference between putting food on the table or closing down shop?
I remember last year almost one third of the proposals and estimates we sent out, came back with a positive response and often a signed contract. Businesses were thriving back then and they could afford to revamp their logos or websites, without questioning our pricing and procedures. Unfortunately though, the past six months has proven to be incredibly brutal for our design firm. We have not had a single new client sign the dotted line for more than four months, and those who do show an interest in our design services, point to their lack of funds to start any type of project in the near future.
So, do we continue to put proposals together with our “normal” prices in hopes of a miraculous economic turnaround, or should we be realistic and cut our prices by 30%-50% and keep our business from filing for bankruptcy?
From talking to my design colleagues around the world, many have been faced with a similar challenge. To my surprise, one very successful designer in New York was forced to close down his studio, outsource his client’s work overseas, and bartend at nights to make ends meet!
Here is our solution to this dilemma:
1. Maintain your pricing but give the client flexible payment terms. For example, if up until now you used to bill 50% upfront and 50% upon completion, try to spread out the payment terms into more affordable monthly increments without interest. We have implemented a 3 to 6 month payment term depending on the size of the project.
2. Offer extra value-added incentives. If a client is looking for a logo design, propose the logo design like you normally would, but add on a business card and letterhead design for free. Make sure to mention on your proposal how much you normally would charge for these services though, and mark it down to $0 as a “limited time savings”.
3. Market your affordable services such as business cards, postcard design, and website maintenance packages. We have noticed that large ticket items are a deterrent in tough economic times, whereas small and affordable design items are rarely questioned.
On the other hand,
1. Do not cut your prices dramatically. Just think, once the economy turns around, you will be stuck doing work at half of what you normally charge.
2. Do not close down shop and give up on your dreams and ambitions. Maybe move into a home office, but continue marketing yourself and taking on smaller projects until the smoke has cleared.
3. Do not nickel and dime your clients during these times. Clients will appreciate your leniency and price breaks, and once they have the money they will call on you for much larger projects.
4. Do not give up.
Since we have implemented these practices, we have seen a surge in business over the past two weeks. Maybe the economy is getting better, and maybe it isn't the type of income we are used to, but something positive is happening here!.
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Art Javid is one of the co-founders of the American Design Awards, an international design awards organization with over 30,000 active annual participants based in San Diego, California.
Art is also the co-owner of Graphicwise, Inc. (with his twin brother Kevin) an Orange County, California-based creative design firm specializing in attractive and effective web design, corporate identity and packaging art since 1997.
Besides graphic design, Art has been responsible for co-illustrating 5 published children’s books for a Los Angeles area television personality, and enjoys playing basketball whenever time permits.
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