Value Based Pricing Calculator
Price jobs according to the value you provide a company.
Overview
I was always so annoyed that I didn’t know what to charge for my work as well as not being very confident to charge a lot for design service. Every time I talked to someone about pricing they all had a different way of doing it and there didn’t seem to be a consistent pricing method for work.
So, I went down a rabbit hole to see if I could find a way to create a consistent and simple way for me to price any job that would come across my desk, and that is how the Value Based Pricing Calculator came about!
Role
Freelance Designer
Duration
1 Month
Team
Solo Project
01 // I Hate Pricing
Within the design industry, many designers struggle to effectively market themselves and their services. They focus on talking about design rather than the potential value their changes could bring to a company. I didn't take the usual research approach. I began with a concern and then used the internet to see if it was valid. Initially, this was more of a personal exploration than a product design one.
Pain Points of Pricing
Determine a consistent pricing strategy for jobs.
Understand how to articulate the value of design work to a client.
Find ways to boost your confidence when discussing pricing on calls.
Lack of Confidence
As a new designer or freelancer, it can be easy to think that your work isn't up to par or that you should charge a lower rate.
Inconsistent Methods
Each new job presented a new challenge: pricing! I had no way to set the same rate for each job. I was simply picking a number that felt right to me.
Time = Money
My research led me to YouTube and Twitter. Finally, I wasn't alone; thousands of people in the comments were worried about how much they should charge.
02 // Industry Analysis
Our research uncovered several key issues that freelancers experience when entering the industry. My task was then to investigate further to find out what industry leaders were doing and compile all the relevant information.
🔎 Goals of Industry Analysis
Determine a consistent pricing strategy for jobs.
Understand how to articulate the value of design work to a client.
Find ways to boost confidence when discussing pricing on calls.
The Chris Do
There were also an array of videos with successful freelancers explaining how they priced for their services. One interesting concept appeared and this was Value Based Pricing by the designer and business owner, Chris Do.
When I dived deeper into the video, most peoples problem with pricing centred around two main things:
Not knowing the problem
Freelancers were trying to sell to a client without knowing what the problems were first.
Talking like a designer
Most freelancers talked about design terms rather than what return on investment a business could expect.
Chris Do
Founder, The Futur
The Process
Consistent success requires a clear and concise process. Here is the step-by-step process used by The Chris Do to help price jobs and increase revenue.
Step 01: Discover
Discover what their objectives are as an organization.
Step 02: Diagnose
Diagnose what problem is preventing them from achieving their goals.
Step 03: Pitch Solution
Transform their goal and your solution into a monetary value. For example, "€10K in additional monthly revenue.”
Step 04: Charge 10%
Sell them your solution. ‘My solution can help you to generate an extra €120k a year’
Take your 10% of the additional revenue you generated for them!
03 // The Calculator
In reality, it's just a collection of formulas and math integrated into a Notion database. I could have designed a fancy app or website, but many freelancers use Notion, so they can easily copy and paste this calculator into each client folder when they're trying to get a job.
Step by step process
I wanted to keep the design and layout simple, as the freelancer will likely be going through it while on a call with a client, leaving little room for them to think about what comes next.
Show the client in real-time
There is no need for the freelancer to manually calculate or enter any numbers; the amount is automatically updated in front of their eyes. This builds trust between you and the client, as they can easily see where their investment is going and why you are charging what you are.
Conclusion
Solution ≠ App
My first attempt at creating a custom app for this calculator was frustrating. In hindsight, I wouldn't have even attempted to build the app. Notion was much quicker and had the added advantage of being a service used by thousands of freelancers.
Powerful Formulas
Creating simple formulas and code can take your ideas and concepts to the next level with minimal effort. I wrote a formula that took only two minutes, but saved me hours of pricing time.
Don’t stop at the first idea
As more and more people around me start using it, they wanted a comprehensive guide on how to ask questions correctly. I plan to include a thorough guide on how to ask clients these challenging questions so they can get the answers they need.
Labels & Wording
During this process, I confused myself several times about the labels I had on each column. After a few attempts of trial and error, I found a set of words that made sense to both freelancers and business owners.