How To Price Creative Work

If you’ve already had atleast a couple of clients, and you feel like you’re being underpaid, this one’s for you.

Personally, I’m talking about Programming when I say Creative Work but this is applicable to any Creative Process you’re trying to get paid for.

The Short Answer

As @patio11 likes to say, “Charge More!“. Double your rates until someone says ‘No’.

Note: His Salary Negotation and Don’t Call Yourself A Programmer articles are amazing resources btw.

This is a lot of work, yes. It will be taxing on your time and your emotional fortitude but hey, you’re the one complaining.

My (Longer) Version

The trouble with economics is that it thinks of all of us as perfectly rational, ruthlessly self-maximizing agents. In reality, things are much more complicated for creative work and creative people:

• We’re emotionally attached to our work, so we overcommit
• We want people to like us and our work, so we become people-pleasers
• We compare ourselves to the best in the field, so we undervalue ourselves!

A Vicious Cycle

When someone is trying to earn more, the cycle usually goes something like this:

1. Raise rates.
2. Client will (reasonably) ask why they’re paying more
3. Panic, and start promising to do more (start justifying the rate)
4. Wind up doing more work, which takes longer to complete.

5. Effective hourly-rate STAYS THE SAME

   • more likely, might even decrease. >_<
6. Get Frustrated about being underpaid. Cycle back to 1st step.

Use a 2-phase approach

There’s nothing inherantly wrong with doing more work to justify a higher rate. It’s just that you’re not solving your original complaint.

As such there are two separate questions you’re trying to answer so investigate them separately:

Phase 1 - What’s my Current market-value?

• You’re doing a certain amount of work (say X units).
• You’re currently charging $10 for it.
• Double that to $20 for new customers or charge $10 for a new project half the size (X/2 units).
• Repeat until you get consistently rejected, then negotiate. Let’s say that finally you get to about $30 for X units of work.

Note: We’ll talk in a separate article about what X might be and how to estimate it.

This is the current market value of what you’re doing. This is the step that most people skip, because most business-writing is focused on the next phase.

Phase 2 - How can I increase my market-value?

• Once you have your $30 rate, here is where you start offering more “value-added” services.
• For software maybe that means Better Architecture with better code-quality, automated tests, documentation (things users might not immediately see)

Note: Since this is something that doesn’t immediately impact users, you will need to get better at talking about these things and “selling them”.

• For something like photography maybe design their Save The Date for free if it’s a couple shoot. Maybe do an extra session with them, whatever your thing is. Get creative. :)

Should you Ease off the brakes or press on the Gas-pedal?

I’ll leave you with an analogy to tie things together: Imagine you’re in a car, with both the brake and gas pedal at half-pressed. You want to go faster; do you ease off the brakes or press down on the gas?

When I was younger I think I had more energy and would just default into pressing on the gas. But that way be dragons (and burnout), and as I’m getting older I’m finding much greater returns from removing blockers (internal and external) instead.

Summary

Phase 1 is about easing off the brakes, Phase 2 is about pressing down on the gas. I’d say go easy on the second till you’ve made progress with the first but ultimately it’s up to you.

And remember, the market value of your work is separate from your value. Don’t confuse the two.

Good luck out there. :)

Written by Joel Louzado who lives and works in Mumbai, India building fun things. Say hi on Twitter