Over the last few weeks, my workload has been somewhat dominated by corporate identity work. Fortunately, it is an area I have always been strong in, but to have so many corporate identity projects in at once, all of different sizes and for different sized clients, got me thinking about pricing.

The curse of any corporate identity project is in the estimating. From the client’s perspective it seems simple: “How long will it take you to create me a new corporate identity?”. But as we all know, nothing is ever that simple.

So… How should you price?

Well there are 3 main schools of thought for pricing. These are explored below:

1) Value Based Pricing

The current trend for pricing of corporate identity projects is value based pricing. This involves setting pricing based primarily upon the perceived or estimated value to the customer, rather than the time taken to produce the end logo. So to an extent the end price is largely dependent upon the size of the client.

This pricing method is not, in my opinion, the way to go for a freelancer – especially not one that has only been going for 3-4 months! For large agencies, working with huge clients, it has value, but for the rest of us we need look elsewhere.

2) Project pricing

The next solution is pricing by project. David Airey, in his book “Logo Design Love”, recounts a short story of Picasso sketching in the park when a woman approaches him and ask for a self-portrait. Picasso obliges and in a single pencil stroke is done. The woman loves it and asks, “How much do you want for it?” Picasso replies, “5000 dollars”, leaving the woman aghast. She questions, “How come you want so much money for something that only took you a second to draw?” To which Picasso responds, “Madame, it took me my entire life”.

As a designer we have trained and taken many years to get to this point in our lives where we may be able to produce the perfect corporate identity for a client with our first design – in less than an hour. Should we, therefore, only charge an hourly rate for that logo or should we charge for our many years of experience? It may have taken only an hour to create it, but it took 20 odd years for me to learn how to create it that quickly.

Project pricing is a very good way of pricing… but the average client is still likely to ask you to break it down by the hour. It just seems to be human nature.

3) Pricing by the hour

So the final, and traditional pricing method, is by the hour. Whether we like it or not, this seems to be most often where we end up. And in the main part it works – if we’re pricing a brochure and have all of the info for it, then we can roughly estimate the hours it should take. Likewise, for a web design.

But (shocking truth alert!) for a corporate identity project, we often don’t have a clue how long its going to take! All we can do is give ourselves a set amount of time – time that we need for experimentation, time for ideas, time for finalising concepts, time for research and so on. We might nail it first time – but we will still spend the rest of the allocated time working up other options, tweaking concepts and experimenting with other routes – routes that may end up leading absolutely nowhere. Because often, that first logo we create (the one that we thought was ‘the one’), turns out not to be ‘the one’ after all!

The bit not so much about about pricing…

And then there is the Paradox of Choice.

“The what?”, I hear you cry!

The paradox of choice states that in providing too much choice, we often feel less satisfied with our end pick, than we would have done had there been less choice. By giving a client 40 odd logo options to choose from, we simply confuse them, force them to pick one logo from the three that they cannot decide between, and leave them not ever feeling 100% sure that they made the right decision. We are far better off providing them with 5 good concepts – chosen by ourselves as the experts – than all 500 concepts that we made (including the really horrible ones that should never have gotten beyond the sketch pad, let alone ended up in the client presentation!)

Whilst you may be concerned that a client will judge you by the fact that you spent 3 days and only produced 5 concepts, if one of those hits the mark, they won’t care. Explain your process, justify the designs with sound logic, and tell them why each logo concept is in the presentation. If needs be (and this is a fail safe only for presenting in person), keep a “best of the rest” sheet for emergencies in case they really are not buying anything you have presented. It may save you in the end, or it may make them realise that the ones you chosen are by far the best options.

And now back to pricing…

I’ve digressed…but this all has an influence on both pricing and, in the end, client satisfaction.

All clients are different. All clients have different budgets and different expectations from a corporate identity project. There are those clients that want stakeholder research, a materials audit, market research, visual values and then, after all that, a suite of justifiable logo options from them to choose from. And there will also be those others who simply want “a page of logos”.

Price it right for you

The most important element of pricing for such a project is that you come out with a price that you are happy with. Obviously the client also needs to be happy with the price, otherwise you will not be getting the work (and some will try to haggle with you from your starting price… this is business, after all!) but if you are not happy with the end price you are working with, you will get angry or bitter towards the client when it is not their fault.

You may find yourself working far more hours than you feel you agreed to, when, in fact, you accepted this work at that price. The client will always push for a little bit more. You should have built in time for that in your estimate. And if they negotiated you down too much, you should have stuck to your guns over a fair price, or you should just accept the price as it is, and get on with producing the best possible design work you can in the time available.

As designers, we are in control of our pricing. We all know that estimating a corporate identity project is a little “how long is a piece of string” but we have to allow for what we can – and over time, you find a set amount of time that you are comfortable with for all such projects. If a client decides to shorten that time, then either accept it or gracefully walk away.