Pricing Design Work & Creativity

Pricing Design Work & Creativity

First Question Woah Yea Only question, actually (Laughter) No, you might have a follow up! W-What do you charge for a logo, and can you break it down for me? Like how you…charge…like…you know Yes Hourly? How many hours? W-What is your creative…director… What are they worth? What are their hourly rates? So a logo. How many people here design logos? Or…yup, okay. Alright! So we’ll ask the group, then. Logo. So the question is: How much? Hourly rates, how do you break it down, whatever. How much do you guys charge for a logo? Depends Ok, Depends. Anybody? How much do you charge for a logo? Just throw a number out. Fifteen hundred for a package. What’s in the package? A logo. What else? Colors. Colors Typography. I always include a brand strategy, even if they don’t think they need it That’s just built into it. And…supporting elements. Excellent! Like what are supporting elements? This is a really long list already. Go ahead, keep going. Uh, illustrations or icons, patterns… I see. The whole system! Anything that can support the brand, beyond the logo and the fonts. Perfect! Ok, great! Thank you for being so brave to say that! Anybody else want to throw a different number up? 500, perfect! Earth, right? Earth. Earth said 500. I like that! OK. and that’s for what? A logo? For just a logo, yea. Ok, perfect! Great! Anybody else? [Inaudible} Twenty thousand Oh! Gabrielle said twenty thousand! Nice! SOLD! (Laughter) Twenty thousand. Gabrielle, what do you do for a twenty thousand dollar logo? She’s basically saying: You give me twenty thousand dollars, I’ll design you a logo, you own it; It’s yours. Oh, ok! So she–Ok. But anything else? Do you do anything else, bes–Ok. Twenty thousand. That’s great! You’re looking at it! (Laughter) That’s her whole studio. Any other numbers to throw in here, you guys? Hah, that’s a pretty big jump! That’s 3x. Let’s look at it, guys. That’s 3x of that. My math’s pretty good. Fifteen hundred. What’s that to that? Now the math is not so good! (Laughter) Rosille! Rosille, a smart person, tell me what the math is on that. Is that just 20x? Huh? No it’s not 20x. 17, 15x? [inaudible] (Laughter) Alright, Ok, Ok! That’s the good “X.” It’s not 40. Your math is terrible. Good “X.” 13.Yea. It’s some weird number like that, but it’s good! That’s a good “X.” That’s great. Let’s talk about this. So, do you guys wanna know the answer to this? We can talk the whole night. Let’s do it! Alright, I’m gonna tell you. Just, will you relax? (Laughter) You know what? You got too much testosterone goin’ on dude! Ease it up with the weights, will ya? Alright, just relax. So here’s the thing. And, I did this talk recently, and I’ll draw a logo for you guys. It’s a pretty good logo. Ok What’s that logo worth? Billions. Because if I have a T-shirt, it’s worth nothing. Or it’s worth the materials that it costs to make it. I put that on there and kids will pay 20 bucks for it. It’s pretty weird. So that logo’s worth a lot, but the logo’s just a part of their brand. Right? So that illustration could’ve been something else. I’m pretty sure we’d pay the same amount. And you know that, because when Michael Jordan has his Jumpman shoe, it’s a different mark. And that now is worth a lot. Ok, so, why is it that some people can charge 1x for that, 10x for it, and 100x. What’s the difference between those companies? Why is that? Value to client That’s important. Ok? The value to the client. So, uh, this is one client. Let’s assume that’s a skirt. That’s a mom and pop business, so, that value to them is ‘meh.’ Ok? And on the opposite side of this is some kind of giant corporation. So somewhere between here, so… Everybody here presumably is talented enough to draw this logo, for sure. But depending on who you give it to, the price should change. So then now we’re not charging for time. We’re charging for value. Here’s one thing that you need to know, because I talked to some of the guys that worked over at, uh, Landor and Associates. They designed some of the worlds biggest brands. Fedex, Cincos, um, H&R Block. They get a million dollars a logo. Ok? Green square But it’s a good green square. What they have when the logo doesn’t work well is: They have risk. Ok? Uber had a backlash. People revert their logos, and they went through all this stuff, so, there’s a lot of risk involved. Ok? And then they have physical things that they need to put the logo on. It costs a lot of money. So are they going to hire some rinky-dink operation to create a logo for them… …when they have to spend hundreds of millions of dollars, to reprint the airplanes, all the brochures, everything that this thing touches? Forever. For a long, long time. That’s an expensive proposition. That’s why you would want to charge them a lot more. So you don’t go into it saying it’s the flat number. You price the client and not the job. What’s the value? Ok? A logo…When you guys say ROI: I don’t like that because this mark could’ve been anything and it would still be as valuable to them. So it doesn’t technically have a positive business impact but it could have a really negative business impact. If people hate it. If it looks a giant, phallic symbol. Which sometimes these things do, right? So that’s why its variable. Now, for me, um, I have this thing where I need to charge a certain amount of money for a project. Otherwise, I can’t be interested in it because if you look at this space it’s a big building. I gotta pay a lot of people. Electricity. It costs a lot of money just to be in business, so I know I can only manage so many jobs per month… …so just by virtue of what it costs for me to do business, my rates are going to begin much higher than yours. Ok, so, what do we charge here? You’re in frame! That’s Frank, you guys. (Laughter) Look good for the camera, dude. Ok. What do we charge? I think we charge anywhere between fifteen to thirty thousand dollars for the logo. We charge anywhere from twenty to fifty thousand to do the strategy before we draw the logo. Ok? We charge another ten to write messaging. And we charge another ten, or so, to do the applications, depends on what they ask for. The applications typically are three things. I say pick three. Right? So it’s gonna be a business card… I’m writing a little fast and sloppy here. I’m sorry. Is that straight, at least? Business card, what else do they want? Letterhead! Thanks, Matt. Letterhead…email blast. That should be its own thing, moving into the future, because that’s a lot of work. Huh? Brand guides is included in this. In this, yea. The usage guide is included in there. It’s a template we have. It’s pretty easy. We just knock it out. That’s what we charge to do a logo. But how do you break it down? Like for the logo, is it just like flat rate, or do you have like, account executives that go in and they charge their hours? No, no, no. I don’t do hourly. It’ll look something like this, ok? Line item number 3: Logo You’re gonna have three rounds. Ok? 18k. That’s it. The other ones I have more words to use, but the logo…I don’t know what else to use. Ok, so when you show that to your client, they don’t care? They don’t go: “How many hours did you put it?How many–?” No. Ok. What should you say when somebody says: “How many hours? I need to see the breakdown. The accountants need to know. How many hours of work? What are you gonna say? Well, we don’t charge hourly but…what’s a good response? Besides saying: “No, F-U.” What’s a good response? I’d ask them: “Does it matter many hours you put in–or we put in–or does it matter the value you’re gonna get out of it?” Well then, sometimes it can get pretty sophisticated and they’re like: “No, we wanna know.” Right? Right!? They don’t just say, like: “Ok, you win!” Does anybody else…have you had that conversation before? No, I haven’t. Ok I guess it’s that confidence of giving them their value again. Like if you’re gonna pay so much, you’re gonna get this many hours, or this amount of my effort. So I guess it’s that confidence of: “Ah, I’m just gonna charge you 18 because you know I have experience and we’re winning and we have whatever. You know, all this to back it up. Do you see what I’m saying? I get what you’re saying. So theres an issue of confidence. To be able to walk into the room and say: “That’s the number.That’s how I work. That’s our policy.” That’s how we work. So there’s this issue of confidence. Do you know Paul Rand? Famous Paul Rand. I think he charged like a million dollars for a logo. He’s like: “Sometimes it takes me two weeks. Sometimes it takes a year. I’ll know when I’m ready. I’ll see you in a little bit.” That’s how he did it! He’s not apologizing. Go ahead! I always liked the Paula Scher reference with the city logo, where she literally drew it on a cocktail napkin in that meeting where they were going over what they were looking for… …and they charged a certain price, and the client was skeptical and she’s like: “No, that’s it! That’s the logo right there! You just did it. It took you thirty seconds.” And she’s like: “Well it took an education that cost me 6 figures and 34 years of experience to draw that in 30 seconds.” Right, right. You’re not paying for time. You’re paying for— Picasso had a better version of that, but yes. That’s the same idea, right? It didn’t take me 10 seconds. It took me a lifetime to draw like this. Ok? So look guys. Here’s the thing: I like to argue. I like to debate. Ok? So I can debate this a number of different ways. So should you guys arg–Do you guys want it to be more interactive? Do you guys wanna argue with each other first? Or how do you want to do this? Or do you just want the answer and let’s go home? Wha–wha–what’s that–what’s the… [inaudible] (Laughter) You care about the slides huh? It’s like: “Ding!” Ok, I’ll just give you the answer. I can do anything you guys want. I can roleplay. We can juggle. We can do whatever you want, ok? Alright. Jung, give me a hypothetical hourly rate. It doesn’t have to be yours but give me an hourly rate. Hopefully divisible by eighteen, ok? What? 200, OK. 200 bucks an hour… Ok, 200 bucks an hour. Rosille, is that 90 hours? Somebody? Yeah? 200 bucks an hour times 90 hours. Ok, so, Jung, you be the client. I’ll be Jung. Ok? Take the mic. I will argue with you. Ok? Here’s tactic number 1. I don’t like this tactic but I’ll use it with you right now. Jung, are you ready? You’re the client, and I’m you. Ok, you ready? No, no. So you wanna know my hourly rate? So my hourly rate’s this times this. So I have a question for you, client. Why do you wanna know my hourly rate? I guess I wanna know where my eighteen thousand dollars is going. Ok, so does that mean if I work less hours, I should charge you less? Yea. So if I go over those hours, I should charge you more? Sure Really? Yea! Ok, so, you’re saying to me: You value this logo taking longer rather than shorter? So it means: If I just tell you it took me 4 months to work on it, you will now owe me thirty-six thousand dollars. If it’s in my budget and if I think you’re worth it. But i would also ask: Why would it take that long to make that logo? I wanna put a lot of effort into it. But I could hire somebody else that would charge me the same rate but be quicker. So you value time over money then? Sure, as a business person, yeah. So here’s the deal: I work really fast. I can come up with a logo, but I’m being punished for me being efficient and really good. Do you understand? The logic doesn’t work now. That’s the problem. So clients can’t have it both ways. They can’t say: “Tell me how many hours, but you can’t go over it.” I can’t put a cap on it. It has to have some symmetry to the logic. So if I work less, you want to pay me less. So then there’s a lot of analogies that you can draw now. Most business people value time. Remember at the beginning of our talk? Time is the most important thing I have. That’s it. So if I can do a logo for you right now and you love it in 5 minutes, are you saying it’s worth less than 18? Or is it worth more now? Because I saved you a lot of time. We can go to market right now. It’s worth more! So charging by the hour punishes me for being good. Now I’ll tell you what: You can hire four interns straight out of school. They’ll charge a couple hundred bucks total, and you’ll wait. And then you’ll say it’s not right, but you can’t articulate to them and they don’t know why. And you keep waiting and you keep revising and what aren’t you doing now? You’re not running your business, Jung. Shouldn’t you be focused on your business? So my job is this, Jung: I’m gonna give you an amazing logo that you’re not gonna have to change for a long time. A mark that you’re going to be proud of; That people are going to look at and clearly understand what it is that you do. That’s worth eighteen thousand dollars. Today. Come back to me in a year. It’ll be twenty-six. That’s what it’s worth today. That’s it. So you’re putting–Basically, you’re putting value to yourself. To what you’re worth as a designer. Well, I’m basing this price just on you, actually. If you were bigger, that number would just go up. No, but what I’m saying is that you’re trying to–You’re defending or arguing the value of eighteen thousand dollars by saying that what you’re going to do… …or your value of your work is worth eighteen thousand dollars because it’s so amazingly good; So much better. So, you’re trying to elevate– Did I say that? In a way, yeah. Ok. Then you said it and not me. Right, so, that’s what–As a client I’m thinking that– That’s what you’re thinking?! Yeah. So what did we just do here? So Frank Shih. When I sell him that I’m better and worth all this stuff, he’s not gonna believe me. I didn’t say any of those words, I think. We can replay the tape. I don’t believe I said any of those words, but Jung thinks that, because I’m confident and I’m presenting it like this. Right, it’s confidence, but you’re also comparing the two because you’re saying: “If we have three interns that will take forever–” So you’re building up the value. The value of not only the quality of your work, but also the–I guess–the efficiency of your work, as well. So you’re kinda putting a lot of values to what you’re doing. I think so. I think so. Just try this idea out for size: Symmetry of logic. If it works like this in design, does it work like this somewhere else in our life? Look for an example. So you’re gonna go on vacation, or you’re gonna go out for dinner, and you want the house to be spotless by the time you get back. What do you value there? That the job gets done by the time you’re back. That’s important to you. Now my friend, um, who owns his own design agency and he’s…you know… ..he’s a big deal. He said something like this. I don’t believe you can use this, but he uses it, because he can say it, ok? He says: “Do you like Nikes?” Do you like Nikes, Jung? Not really, no. Just play a-freaking-long! Ok, ok, I like Nikes! He doesn’t understand how these games work. Yeah, you like Nikes. They’re worth seven hundred dollars. Do you care how those shoes are made? Do you care that there’s some kid, who’s paid fifty cents, to work on that? Do you care? You just care that they’re Nikes. Right? That’s symmetry of logic, there. What you care about is the end product, that is a high quality product, and it lives up to your expectations. So he says that. So he tells them to F-off. He does. I’ve had lots of business conversations with him. He’s craaazy! …but he’s effective. Um, ok, so I’m going back to the drawing right over here where Nike is 1x, 10x, 100x… …value to the client from a mom and pop versus a large coorporation… Yes! …and the way I measure value is by, uh, increasing profit or reducing risk. Right? No, I didn’t mention profit. You’re just reducing risk. Just reducing risk, ok. Yes, and you could also look at it like this: How many thing will this logo touch? That you print? What is your printing budget? It’s 40 million dollars. Well, I’m not gonna charge you 2,000 dollars. You won’t get the job, by the way. If you under bid that project, they’ll be really scared. So you can ask them: “What’s your printing budget? How many things does this mark touch?” What happens when this goes wrong? So, in their mind they’re like: “Oh my god. You’re right.” So you can hire somebody for less money– So, you’re getting a ton of information before you even offer a service and price and you’re getting all the information and doing the math in your head… …of what the end product is gonna render them so you could see what kind of value it’s gonna have. I don’t do it in my head, I do it live with you. Sean, how many things are we gonna print this on? Bla bla bla bla. What’s your printing budget? Like, oh my gosh, what do think you should spend? I just try and get them to say it. You guys see the theme here? I just wanna do like a meta moment here, please. Meta moment is: I don’t wanna say it. I just wanna ask you questions until you say it. When you say it, you believe it. You guys understand that? ‘Cuz you’ll lose this fight every single time. I just ask lots of questions. Go ahead. So alright, now playing devil’s advocate–I’m sorry–This um, young lady– Amy Gooseman Amy! Ok, so I’m talking with you, I’ve already talked with Amy, I followed her on Instagram and I’m engaging with all her stuff… … and I see her engagement is doing well because she’s a really great graphic designer… Yea. …and so now I’m coming to you, and she quoted me fifteen hundred dollars… Right …and now I’m coming to you and you’re saying eighteen thousand dollars but I’m seeing–I’m trying to figure out because I know she does really great work. I mean what’s the difference, ‘cuz I feel that she does great work. She gets a lot of engagement. I’m tryna see how she would be a risker–that much of a riskier person to go with; To pay eighteen thousand dollars. Ok, um… I’m gonna ask you a few questions. Is the logo important to your business? Uh, yeah. Ok, it means something. So if it’s right: You can move on with your business. If it’s wrong: You have to redo this process again. Is that right? Correct. So I understand there’s some risk associated with picking the wrong vendor. What criteria would you use to determine if it’s a good vendor for you or not? Um, I guess proof. Proof? So what’s proof to you? Uh, case studies… Case studies. Does Amy have more case studies than us? Uh, no. Ok, what’s your next thign? Uh, what other criteria am I gauging– Yes. Um, that’s it! Just, I wanna know that what shes done before. Think about the risk. Ok. Think like a client. Don’t think like a designer, think like a client. How long have you been in business? How many referrals do you have? What’s your credit story like? I wanna see your office space. How many employees work for you? And for all those things, theoretically, I can beat Amy on. So you can take risk or not. Are you a gambler? So if you can’t– Huh? So for me–which I don’t have the credibility, obviously, that Blind does–so I wouldn’t be able to be in the same…in the same ballpark figure… …as like I can’t even think about anything close. No you can! Here’s the thing I’m gonna tell you guys right now: You could all do this right now. Everybody always thinks because I’m this person and I’ve done this and I have these awards… No, it doesn’t matter because the first day I started, I wanted to charge these rates anyways. I was already working like that. Ok? You just have to be able to say it out of your mouth because the first time I charged ten thousand dollars for strategy… …was the first time I charged ten thousand dollars for strategy. I didn’t do it for a hundred, and then two hundred, and two-fifty. I just went for it And when they paid I was like: “Huh, this is really good. I need to charge twenty thousand dollars for strategy!” And that’s how we keep getting these things up. And then I find out some other fools charge a million dollars. I’m like: “What is wrong with me? I could charge more for this!” That’s it. You just have to believe that this is what it’s worth. And it has to be relative to the risk to the company. I don’t care who you are. You can be Paul Rand, You can be anybody you want–He’s not alive anymore– Mom and pop comes to him, he’s gonna do it for a sandwich… …because that’s what it’s worth to them. Ok? Clients don’t choose the best option. They choose the least risky option. You need to appear as the least risky thing. So just ask them: “What criteria are you using to make your decision?” You should already know this. I know it… They run credit history checks. They wanna see your refferals. Ok? Social proof is really important. They wanna know that you’re an expert Well, you know what? I wrote the book, literally, on brand–There it is. I teach and consult people how to do this. I don’t say it like that. (Laughter) I’m much friendlier in person. Rossille, what do you wanna say? Should we be finding out–and how do you find out–what a company’s revenue is? You want me to do that? It’s really easy Is that important to you guys? To understand revenue of the company? You can make guesses, you can ask, but people are not likely to tell you that. Some designers make the mistake that they just wanna cut to the end and try and find out what the company’s worth. This is kind of a roundabout way that makes it a little bit more comfortable for the client to share and disclose financial information to me in small steps. I like to engage in conversation and to establish with the client that I’m a business person that understands business concepts. How do you find out about money? How do you find out about money? So you know when you–When I went to my financial adviser he’s like: “How much money do you guys make?” Woah! I– I mean we just met! Like, do I get a handshake first? What’s going on here? Ok? I have a round and about way of doing it. And you have to start to understand their business. Tell me how you generate–Rosille! You’re your client again. Pick a client that you know really well. You have to know their business quite well. Ok, so I wanna understand how you guys generate revenue. Ok? Because I believe those other designers are going to make you some really nice things, but I actually want to help you increase revenue. Is increasing revenue important to your company? Ofcourse. Some people say no, oddly enough. Some people say no. I don’t know why. Increasing revenue: So how do you generate revenue today? Do you have multiple skews? Do you have an e-commerce site? Like, how do you make money? Uh, we have an e-commerce site, and we sell out products and physician’s offices. Ok. E-commerce. Do you ever sell direct? Other ways? Or through sales reps? Hmm…Not at the moment, but we’re thinking of starting a– Give me a couple categories, please. Because if it’s just one, it’s kind of really fast. Ok, well E-commerce, I mean, direct to patients, yeah, through the– But through their e-commerce portal? No, no, no. In the offices. Like plastic surgery. Ok, so we would consider that more of a retail.. Retail, yeah. Ok, retail. Ok, what else? Right now, that’s–Well ok. Um, I guess you could say… Let’s say they have reps too. Yeah,reps. Ok, let’s say reps. Ok. Alright, perfect. And now I’m gonna ask you just to…to uh…do two things for me right now. One is: Just be who you are, playing the client. And also be the person looking at you and understanding how you feel. Can you do that? Say that again. Ok, to be aware of your emotions while you’re talking to me, ok? ‘Cuz later on I’m gonna ask you a few questions about that. So I have to tell you now ‘cuz otherwise you’ll be like: “Huh? I wasn’t paying attention to that.” So far, so good? Ok, so e-commerce, retail, and reps. Do you sell internationally, or is it all domestic? Um, internationally too. Ok, so you have international reps too? I believe so… Just play along. We’re not fact checking. Sure, Canada. International reps. Ok. Alright, what percentage of your overall revenue per year do each one of these represent, percentage wise? Ok great! You’re doing really well! Retail would be another 30? Ok, that’s not gonna make sense. Yea that’s why I did the number “2” but you stopped me from doing that. (Laughter) Yea do e-commerce at 45. Yea. You know these are just made up numbers? As long as it equals a hundred, we believe you. Retail at 25 and then just split the rest. Now you’re just being too granular with me, come on! Ok…twenty-five…that’s seventy. And then do reps at ten percent and international at twenty. Ok, ok. Now, that equals a hundred, right guys? Ok, now: What are your profit margins on each one of these things? It’s gonna come here. It’s gonna slip right in. You guys won’t even know it. So this represents forty-five percent of your revenue. Since you’re selling direct, your profit margins are gonna be very high here. There’s no middle man. If this costs a dollar to buy, the retailer bought it from you for fifty cents. So you have to make it for twenty-five cents in order for you yo survive. It’s called the double keystone. It doubles each time. Ok? At retail, it’s a dollar, at wholesale, it’s fifty cents, and manufacturing–that’s cost–at cost, it’s twenty-five cents. So you understand that? So when you have no middle man and you’re direct… This is why Apple has trillions of dollars in cash because they make it and they sell it directly to you. What do we know the e-commerce percentage to be? What do you think your profit margin is? So this is where everybody’s lack of business sense here is gonna hurt you in this kind of conversation. You do need to know some business fundamentals and we will talk about it, ok? Well, you think about a dollar and it costs you twenty-five cents to make it. What’s the highest this can be? No, it cannot be. You cannot make a hundred percent profit. Seventy-five! The highest it can be is seventy-five percent profit. Right? ‘Cuz it costs you twenty-five percent to make it. So it’s not gonna be seventy-five percent; There’s some other costs in there. Ok? So lets say it’s like, um, sixty-five percent profit. Ok? And we’re gonna talk about gross profit here. We’re not talking about net profit and I’ll get into that later. So this is 45% of your revenue, 65% gross profit. When you’re selling to retail, assuming that it’s in the store, what’s your profit margin gonna be like this? What? Somebody is doing their math! Twenty-five percent. Right! ‘Cuz you had to sell it for fifty cents, so the best that it can do is twenty-five percent. Ok? If you’re doing your job right, its 25%. And then the reps. The reps are what? A wholesaler. They sell to retail, so it’s going to be very similar. Ok? And international reps generally want even more money from you because you’re an unproven thing and they have to do all the marketing and all the hard work. It might be as low as 20%. Ok, Miss Client: What area of this seems to make the most sense to focus our efforts in terms of marketing/branding initiative. Where? Build me a website! Well, here. It’s obvious. It’s right here. Already, this is the biggest portion of your revenue, and you make the most profit in here. So you guys that build websites…almost always the answer is here. Sell direct. Now, most clients don’t have 45% of their revenue. It’s much lower than this… …’cuz they’re not good at building websites and it’s not where they’re set up. They started here. So this will be like 80% and this will be like 5. It’s usually opposite. Ok? Alright, so if we’re able to move the needle–we do really well, fast forward to the end of the year: How much percent increase can we go from 45? What do you think it is? How much can we hope to boost this up? Rosille? At least 20%. No, that’s too generous! Oh my god! No. Like 2, 3%. They’re not gonna say 25% ‘cuz that’s rediculous growth! Right? If we can do really well in this year we might get this up to 5% higher, up to 50%. So let’s say it’s 5% higher, ok? So we’re gonna increase 45 plus 5%. Alright let me clarify something right here. When I’m asking the client about how much impact the initiative will have on their company… … I’m really trying to ascertain what the real value of what it is that I’m doing. Not the value of the time that I put into it, but the net value of the result that clients are going to get. Now most designers tend to think about design or solutions in a qualitative way. Like it looks better, it’s more expensive, it’s more luxurious, it’s more premium. Those are qualitative things. But when I look at a quantitative thing in terms of we’re gonna raise percentage from 2% to 4%… …We’re gonna convert on 2 million dollars of business to 4 million dollars of business. So in essence, then, I’m establishing in the client’s mind that what we’re going to do is worth 2 million dollars. What is that to you in terms of revenue? Before profit? What is that to you? Oh, it’s 20 million dollars. Now I know. So I take that number times 20 and I know you are a 400 million dollar company. See how I figured that out? Now here’s the thing: I don’t have to do the fancy math… …because once I talk business to another business person, they feel comfortable talking to me about the numbers. “Oh, Chris, we do 8 million dollars a year and this numbers that! We don’t need to focus on that.” I’m like: “Great, that’s what I thought.” (Music) But the thing is: I helped them to realize in the process where they need to focus their energy. Ok so look at this, guys. If we increase business 5%, it’s gonna equal 20 million dollars in revenue, ok, at 65% gross margins. 65%…whatever that number is…it’s a lot of money. It’s at least 10 million. It’s probably something like 12 million, ok? So if we fix the website, you stand to gain a net profit of 12 million–Uh, gross profit–12 million dollars. Is that true, Miss Client? What kind of money should we spend in building this new amazing e-commerce platform? If you’re gonna make gross profit of 12 million dollars, what kind of money should we spend to build a better site? What’s it worth? Whatever it takes. Kinda, but throw out a number! Um…yeah, like 10% of that. 10%? 10%. So let’s spend 1.2 million dollars to build you a new website. Are you cool? I’m cool. Who here builds a website? Ok, I’m gonna call Sean. I’ll hire Sean for–What do you charge? Not that I know, but just throw something out! What would you charge me? “Sean I got a job. Big client. How much would you charge me?” Today right now, yeah, yeah! 6,000 bucks. I’m gonna pay Sean 6,000 dollars, he’s gonna be thrilled with that, and I will make the difference between these two. That’s all it is. Oh, I say…they’re gonna pay me 1.2 million dollars. I’m an entrepreneur. I’m gonna find somebody to make it. The best person I know. I’m gonna pay the full rate. No negotiation, I’m gonna pay you full rate. It’s a fool’s rate. (Laughter) And I make the difference. Gabriel. So, um, now I’m the client. How can you guarantee my 5% increase? I can’t. I did not guarantee you that. I just ask you a question. Well but I’m…I’m not… I can’t guarantee you that. …I’m not convinced that making the website will be up 5%. Well, what number would make you happy? What’s a realistic goal? Not an optimistic and not a pessimistic goal. So…but…but…what would you say if a client…a client’s never said that back to you? Did they ask that question in a meeting? How come we can guarantee this? I cannot guarantee results. So then, if that’s the risk thing again. If you want a guarantee I’m gonna charge you 3 million dollars. I’ll give you a guarantee. You will? I will! I’ll just…I triple the rate. I’ll give you a guarantee for 3 million. I can figure it out for 3 million dollars, I’m pretty sure. And then if it doesn’t go up 5% you’ll give the 3 million back? What? Wait. Hold on. There’s too much laughter on that side! What’s that? If it doesn’t go up by 5% you’ll give the 3 million back? Yeah! That’s what a guarantee is right? Yeah, I stand behind my work. And why do you think that it will? Because I’m good. ‘Cuz then I’m gonna hire Al Martinez to do the data analytics for me. I’m gonna hire 3 Seans. Gimme the best work you guys. Let’s study this thing. Let’s figure it out. We can tweak. You know….you guys don’t know this but I’m a Capricorn… …which means I believe in constant improvement. That’s what my therapist told me. Constantly improving all the time. A 5% increase over a certain period of time is very doable. So here’s what I’m gonna do: I’ll have my attorney draft up something. You have your attorney look at it. See if it passes mustard, whatever, and if it’s good, then we move forward. Here’s what I’m gonna say though: Let’s give it a realistic time table. If I hit half, I make half. ‘Cuz anything percentage over 0 is better. It’s money in your pocket, right? So if I gave you this offer today: If you give me 50 cents, I give you a dollar. Would you do that deal? Yes. What if I said: You give me 75 cents, I’ll give you a dollar. Would you do that deal? Of course you would! That’s a 25% return on your money! What are you getting in the bank right now, like .01%? A 25%…I asked this question in Las Vegas to a crowd…he’s like: “No. No. It depends.” I’m like: “It depends on what? If you’re crazy? If you’re still breathing?” Why wouldn’t you do that? All entrepreneurs believe in that. We put our money into the bank all the time to make a tiny little percentage. We hope the stock market gives us a 4, 5 , 6% return. If I tell you to spend 75 cents to make a dollar–which is 25% return, or whatever it is, that’s not the right math, but… …that’s valuable to you! I believe I can move this. I’ll pro-rate this! How’s that for a deal? Good deal. one of the most valuable things, I can tell you right now. You guys sell what you do. I sell what the world can do.

100 thoughts on “Pricing Design Work & Creativity

  1. I don't know how I ended up here… But goodness what value!! 36min just rekt all my thinking about pricing, and I'm a performer for over 10yrs!

  2. This video is so useful im not even a designer but figured my brother could use this video. I watched almost the whole thing and shared him the link too!
    Edit: I watched the whole thing actually. The line at the end was so good.

  3. I have no idea how I end up here, but this guy give some very good tips, and you can apply it to every bussines

  4. Really educational. I learned a lot from this vid, not about the design or business knowledge, but also your way to way of presenting and proving to other people

  5. I've seen this video suggestion pop up in my feed several times over the past year. Not expecting much more than some overly generalised advice, I finally decided to give your video a whirl. Totally blown away by your lessons on establishing a sense of value for a prospective client. Best 30 minutes a seasoned designer can put into their education.

  6. I came to this video to search for graphic designers / web designers! Please reply with your Instagram usernames so I can see your work! Thank You!

  7. This is the most important video I ever watched on YouTube. Everyone is full of shit. This video provides so value. So amazing.

  8. I would never hire this guy, just simply break down your cost as 1 logo = $10000 (creative process included)…..that's it! Please tell the client, many hours goes into the creative process there is no way to quantify it, just say creative process is not defined by hours only, experience, savvy, genius level mind, all part of the cost. In other words, $10000 gets your creativity, exclusivity, and all intangibles that comes with hiring you. Bottomline is if you are not worth it to the client then they should not hire you, but if they like your work sample, and decides to hire you then you should give them a time frame or able to meet deadline, price is very simple 1 corporate logo = $10000.. why are you guys even have a class on this? My god, if this need to be explained to you then you probably are NOT that good. If you are GOOD, you don't need to explain yourself.

  9. The word Quality is missing from people vocabulary these days, you might think you do a good job charge an charge an absolute fortune because you think your worth it, then ask for thier feedback/Review or you may just walk away with the money, Either way the customer should feel he/she has had a quality job performed, it's not about money it's about QUALITY, today people are way to greedy.

  10. i will rewatch the video every day until i can be wake up in the middle of the night and convince someone how valuable i am

  11. Does anyone have more information about this instructor? I would really like to follow him and learn more from him. Literally learned so much from this 36 minute video.

  12. This is crazy, you charge about 100k for this? I mean, well done thats great but I dont get it. Yesterday i read that British Petroleum paid over $200 milion for their logo, and it looks like something you could hire someone on fiverr.

  13. 15:17 I don't think I said any of those words
    True, but that's like saying "I said 1 +1, I didn't say anything about 2, your the one who's talking about 2". Anyone who's paying attention can see right through that.

  14. This is great talk about understanding your value. However, nobody is paying 10k for three assets. However, businesses will pay 10k for all their stationary assets.

  15. Grateful for your aid to educate the public. Question, how did you get the $400 mil. result, because 5% * 20 mil = $100,000,000 & (65+5)*20 mil = $1,400,000. I may be missing another step. Will you and/or fellow classmates help me to understand, what I possibly missed?

  16. Van Gogh's paintings are sold upwards of $40-$60 Million in this day and age…
    He created about 400 paintings in his life…, However sadly he…

    Died as a Very poor man, afflicted with multiple diseases…, he was fortunate to have few warm meals in a year with coffee…
    The Creator of the Original Superman character was paid about $120 for his creation…

  17. Only if Picasso had Your kind of Business Sense…!! He would have died a richer person than Jeff Bezos and Bill Gates together…!!

  18. No offense, but most people just design their own logos. And 99.9% of the time, whenever a company "updates" their logo, it's always hideous, and hated by the masses. So they paid all this money to get a new logo, that everyone hates. Look at the Nickelodeon logo for instance. Everyone hates their current logo. Everyone loved their old logo. It was the worst decision ever made in the history of business.

  19. ha… the comments are all talking about how good the advice is but the way its being expressed by the 'teacher' is so jarring and aggressive its hard to see the point without feeling secondhand offense.

  20. For things like Nike, their product price is also adjusted to the market, when the general market pays 50$ for a pair of shoes how many would rather buy the same thing for 500$?

  21. 9:00 picasso once gave a drawing on a napkin instead of money, when they waiter was confused how is this worth so much value it took few seconds to draw. Picasso replies 60year + few seconds.

  22. Informative video. Delivering value through Graphic Design is what clients appreciate. They want to see positive results through business growth. Charging a client is based on the strength and ability of the client to pay for the design and consultation package combined. Visit our page by clicking the logo on the left. Visit our website at CafyDesigns . com

  23. capitalism makes me sick… How much you would charge to become free ?
    I did my own house, make my own food & everyday i do consume energy from myself – Why this is illegal –
    i live for my own ! Did you ever reached ? NO, most of will save money of next paycheck to buy something with a logo..Thtas why some broke and other study this to make some broke. even if this one is an employee or customer

  24. Graphic Design is a true art form that requires a process. Some people do not grasp this, as they will try to get a logo on fiver for only $5.

  25. I think he is more good in doing business than create graphic. But that is good, especially if you're a freelance graphic designer.

  26. god these people struggle with understanding the role playing parts yet they are going to actually do this…doubtful .

  27. This is why agencies rule! If you are a freelancer, you can not ask for as much money as an agency. Because as Chris said, you can guarantee the work will be flawless when you have experts in your company. This video helped me alot.

  28. Big companies that pay these big prices go to MADISON AVENUE and change their logos every few years.

  29. "…Do you like Nikes? Do you care that there's some kid thats paid 50 cents to work on that?, do you care? You just care that they're Nikes " – Symmetry of logic

  30. In just one day i have watched this video almost 5x times already, this is really powerful thinking and good thinking for any type of consultancy work… I'm definitely going to use this wisdom!

  31. Definitely opened my eyes a little bit more about pricing, although I don't charge per hour, but it's a bit difficult to price something like that back here especially when people are hard on money. They would rather go somewhere else if it's cheaper. I had a situation when I told the client my price he told me "…oh really, well never mind my sisters kid will do it, you know he's good with computers…". So what do you say to that, except Thank you have a good day 🙂

  32. I am interior designer but I thinks this video helped me. And please recommend me videos about design making, interior, furnitures, architecture

  33. this dude is realy bad in answering questions. Like somebody asked how the customer can be sure that his customers increase in 5%. The right answer would have been to explain the customer what will attract his customers by his design.

  34. To summarize. We don't provide any positive values, we charge based on the depth of client's pocket. To top it off they can't even question our lack of effort, because that would mean they are rewarding inefficiency. "I can charge more" "I can charge more".. Damn man, people trust art, sometimes blindly.

  35. You know Indian freelancer ready to design logo in just 5usd and there are many Indian web agency can build websites in just 200usd

    Its eye opening wtf

  36. John Pasche who made the Rolling Stone logo, „Tongue and Lip Design“, got 200 dollars. When he later realized how this logo was constantly used world-wide he humbly asked for a little more. Mick turned him down

  37. With clients like that and all clients, should they pay the full price before or after or should there be a deposit?

  38. Is it not easyer for the company to buy 10 different logos from the internet from freelancers for 100 $ each and pick the best one ?I personally think for the designers it would be fair when they own the rights for the logo and get % from every dollar the company made bcs its maybe like a slotmachine for the designer bcs he never know how successfull the company is in future but the designer can have luck and the company is huge in a few months or years and they say hey we will buy the rights for 1mio. Then u can decide u will sell ya logo or not .That would make sense to me .

  39. sooo many artists don't spend time learning the business side of things or how to market themselves, and complain about barely being able to make their rent. If you are charging 20-35 bucks for a commission on …you would have to do 1000+ pieces just to make 20-30k. that's an impossible level of output. If Banksy can get millions for a single piece, you can find clients willing to pay $50-$100 a hour easily! If you are good, people will pay. you just have to up your rates, take less jobs but make more or the same as before, while being less stressed out. And constantly evolve your skill set.

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