Welcome to five minute magic from Creativity For Sale Podcast. A quick fire episode, sharing tips and tricks from the pages of the book of the same title. 

Every week I'll be sharing one or two ideas that can give you. And actionable take away for your creative career, your business, or just the food for thought for the weekend ahead. These are taken from the audio book, and you can find the full version below. ~

One of the biggest challenges for any creative professional or freelancer is figuring out what to charge for their work. Should you bill hourly, daily, or by project? How do you put a price tag on creativity?~

Today we're exploring the age-old question, 'what is your value?' We'll unpack the complexities of pricing creative work from the freelancer who quoted 500 for a job that others priced at 15,000 to the long-term value of client relationships. We'll discuss why sometimes it's worth taking a lower-paying project and when it's crucial to stand firm on your rates.

We'll also tackle the temptation of accepting work outside your expertise and why the highest-paying job isn't always the right one to take. Whether you're a seasoned creative or just starting, this episode will challenge you to think differently about your worth and how you price your services. It's another bumper episode.

Daring Creativity. Podcast with Radim Malinic

daringcreativity.com |  desk@daringcreativity.com

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Radim Malinic: [00:00:00] Hello, and welcome to five minute magic from creativity for sale podcast. A quick fire episode, sharing tips and tricks from the pages of the book of the same title. [00:00:10] Yes. Creativity for sale. Every week I'll be sharing one or two ideas that can give you. And actually we'll take away for your creative career, your business, or just the food for [00:00:20] thought for the weekend ahead. These tapes are taken from the audio book, and you can find a link to the full version in the show notes.

Today we're exploring the age old [00:00:30] question, what is your value? We'll unpack the complexities of pricing creative work from the freelancer who quoted 500 for a job that others priced [00:00:40] at 15, 000 to the long term value of client relationships. We'll discuss why sometimes it's worth taking a lower paying project and when it's crucial to stand firm on [00:00:50] your rates.

We'll also tackle the temptation of accepting work outside your expertise and why the highest paying job isn't always the right one to take. Whether he's seasoned creative [00:01:00] or just starting out, this episode will challenge you to think differently about your worth and how you price your services. It's another bumper.

[00:01:10] Enjoy.

What is your value? A piece of art is only worth as much as someone is willing to pay for it. But this doesn't [00:01:20] just apply to art. It applies to anything in life where the price changes according to scarcity, exclusivity, or perceptions about its value. [00:01:30] And there's a lot of value in solutions and those who can provide them.

When it comes to business, those solutions might be in the [00:01:40] form of business plans or audits, usability reports, brand strategies or marketing blueprints. Business [00:01:50] problems that need solving often bubble under the surface for a while until someone makes a plan of action to solve them. Then, the need for a solution is [00:02:00] often rational, practical and pragmatic.

Many years ago, I heard about a freelance developer who went to see a potential client, in [00:02:10] person like it was the norm some years ago. He sat in the waiting room, only to see a few other people exit the war room of a coding conundrum. [00:02:20] After the greetings and handshake, the conversation went swiftly onto the project and its required solution.

Once the freelancer had heard the [00:02:30] full score, he took a breath and exhaled a relieved sigh. The solution is pretty straightforward and will only take a few hours to fix. [00:02:40] The room fell silent and the client's faces revealed a look of surprise. It will only cost 500 to fix, one of the team replied. Ha![00:02:50] 

That's interesting. We just had an agency here that told us it will take a month, and 15, 000 in project fees. The [00:03:00] freelancer didn't win the project, and we can learn from this story. First, you will generally have no idea who you're competing against when [00:03:10] pitching for a project. Unlike the freelancer watching the war room door.

So don't try to base your rates on what you think others are charging, [00:03:20] especially as your pricing might look a lot different to your competitors, if you don't have to factor in the costs of running a whole agency and hiring employees. [00:03:30] Second, make sure you listen closely and understand exactly what the client requires, so you don't accidentally overcharge.

[00:03:40] Third, it's very tempting to big up the scope of a solution to possible clients to charge a higher cost, [00:03:50] but they might see through the charade. Ultimately, the key is to propose an appropriate and honest figure that is right for the problem and [00:04:00] its solution, and your own experience, level and knowledge.

Regardless of the various market considerations and comparable industries, the key [00:04:10] in every cost is whether the client can pay, and whether you can deliver what they need. Which in essence is about trust and reliability. Is it [00:04:20] clear what you offer and how you'll solve the problem? Are you honest with your prospects or do you sprinkle a little BS on top to win the work?[00:04:30] 

Can you actually deliver what the client is asking for? Are you too keen to close the deal without fully understanding the brief? [00:04:40] There will always be a difference in the price submitted from various creatives in the mix. Sometimes, the decision on who to choose isn't [00:04:50] judged on the total estimated figure, but how the person or business proposes to solve the problem.

This means detailing the process, [00:05:00] giving a full scope of the action, and telling the client the estimated length of time it will take. In this way, they will understand that bigger [00:05:10] projects require additional resources, with extra costs attached. The value of long term clients. [00:05:20] Some of my clients have been with me for more than a decade.

And others, even longer. There's something so [00:05:30] valuable in continuous collaboration that pushes both sides to keep producing good work, grow both businesses, and achieve things we didn't even know were [00:05:40] possible when we started out. At the start of your journey, you don't have a name for yourself. And so being realistic, clients aren't likely to put forward [00:05:50] vast sums of money for results they can't be sure they'll get.

For that reason, which I now truly understand, only 1 in 20 of the [00:06:00] projects I proposed a cost for were actually agreed for that amount. The other 19 had a decent budget for their project, which at the time felt a [00:06:10] bit short based on the true market value and what I could provide for what they needed, but I went with it anyway.

In such situations, [00:06:20] you can make one of two decisions. Either you can negotiate some more, or you size up the long term value of the client and go with that rationale. [00:06:30] I preferred the latter option. When you put the focus on finance over creativity, It sets a tone that will always be focused [00:06:40] on budget constraints instead of creative solutions.

I'm not saying you shouldn't discuss money, because you have to, of course. I [00:06:50] am saying that discussing the creative solution should come first, and cost negotiations shouldn't become a big thing. [00:07:00] Plus, if you get the client on board with your solution and vision for them, they are more likely to pay whatever you're proposing.

As most [00:07:10] of us know, when Amazon first started out, it was an online bookseller, and in no way a groundbreaking business model. It wasn't a profitable [00:07:20] business either, not at the beginning. Now, you and I both know that Amazon is one of the most valuable and profitable companies in the world. They [00:07:30] still sell books, and you might be surprised to know that they still sell them at a loss.

Why do they do this? Because they see value in [00:07:40] keeping customers in the long term. It doesn't matter if the customer acquisition happens on a low ticket item That doesn't make them a quick profit. [00:07:50] It's about how much they could be spending in the future across many available products. This is what makes Amazon the biggest product search [00:08:00] engine in the world.

Not Google. It's the place where people search for new products or solutions and are only one click away from making a purchase. [00:08:10] In the business of creativity, you can spend far too much time negotiating the right cost and lose an opportunity to retain a long [00:08:20] term client who will grow into a high ticket buyer.

Sometimes, you might have to kiss a few frogs in this process, but the long term thinking [00:08:30] pays off if you have the right business mindset, like Amazon, and the drive to grow and explore future opportunities. [00:08:40] The value of long term work. Conversely, there are situations where the client is looking for a one off project, [00:08:50] with a defined start and finish, and they won't need any further services from you as the problem is solved.

On these occasions, I don't want you to think like Jeff, [00:09:00] the oddly shaped rocket owner Bezos, but like a builder. Many years ago, my wife and I wanted to renovate our house. We had our vision, [00:09:10] ideas, dreams and an earmarked budget. It was our very first building project and therefore our thinking was unclouded by previous knowledge.[00:09:20] 

We were spurred on by the fuel and we wanted to build a grand design. At the start such lofty visions are best approached without [00:09:30] knowing how much they will actually cost, but at some point Someone has to put a price on your dream. So, we appointed an architect and [00:09:40] explored the options of how best to optimise our dwelling for the future.

However, as soon as things got exciting when we could see what our house might look [00:09:50] like, we also faced reality head on. When a few builders quoted us for the work. The five quotes varied [00:10:00] significantly, but we picked the one who was the most expensive and the most trustworthy. I thought my self certified negotiating skills would [00:10:10] come to play perfectly.

Except they didn't. The quote was final and there was no negotiation. Could we do something about the [00:10:20] numbers? I asked. The answer was a firm no. The bricks cost money. The other materials cost money. The work was going to take [00:10:30] six months. It cost a lot, but we agreed on the basis that we understood the long term value of the work.

A beautiful, secure, and [00:10:40] well renovated house. We could have spent less and we could have ended up with a nightmare being built instead of a dream. In a creative business, [00:10:50] you can add up each individual element in the equation and produce a final cost, which is simply that, the project cost. When the [00:11:00] prospect sees the itemised list of deliverables and actions to achieve it, they will get a full picture of the whole project.

A few potential [00:11:10] clients will want to lower the price, but this is where you should know your worth and value. Sure, the client may have underestimated how much it would [00:11:20] cost them, just like we did. But it doesn't mean they don't need to get the work done. An authoritative voice and approach can sway the [00:11:30] work in your favour here, and super clear communication is key.

Whilst some days you can shave off a few numbers to build a [00:11:40] long term client relationship, other days you will need to stand your ground and build the house for what it should cost. [00:11:50] When is it not worth it? When a sizeable financial opportunity is presented to a creative for the first time, [00:12:00] it's not often that they can fully concentrate on what's being asked of them.

Holy shit, how much did you say? is something they wouldn't say out [00:12:10] loud for fear of looking inexperienced. But inside, they're racking their brain about how to make it work, and where to start. The reality is, [00:12:20] projects can be agreed even without the freelancer having the necessary skills and knowledge, let alone expertise.

I've done this. I [00:12:30] agreed to take on work that I wasn't the right person for. I thought I needed the cash and wanted to do the work. Would I have taken the job if it had been [00:12:40] priced at a much lower rate? I was a rookie idiot once upon a time, so maybe I would. But being offered a high price made me change my heart and [00:12:50] ignore my mind.

Many years later, I made the same mistake only in reverse when commissioning creative work. The inevitable [00:13:00] car crash happened when I came across people who replicated my naive escapades from the early years. Even though I could spot the warning signs right from the start, [00:13:10] I still was led to believe they were the right people to do the work, only to look for contingency solutions when the first choice didn't work out.[00:13:20] 

I don't believe that creative people are inherently greedy, and if they were, I'm sure they wouldn't bother choosing a career in this industry. However, any [00:13:30] insecurities about the health of our finances, and the predictable unpredictability of incoming work, can make the best of us accept work that we should have left well [00:13:40] alone.

We've all been guilty of taking on work that's really meant for somebody else. And it takes a long time to become confident enough to pass on what [00:13:50] doesn't feel right, even if it's temptingly well paid.