Cedric Hohnstadt has been a freelance illustrator for almost twenty years. After reading my tips about pricing your work, he wrote in to say…
I still dislike talking money with clients, but it's a necessary evil and there's no avoiding it, so a few years ago I decided might as well educate myself and try to make the best of it. For whatever it's worth here's a few pricing tips that, for the most part, have kept me from underselling myself:
1. You should lose about 1/3 of the jobs that come your way because your prices are just too high. If you rarely or never get push back on your pricing, you aren't charging enough.
2. Never give a price off the top of your head. It will almost always wind up being too low or too high. Instead, just tell them you need a few minutes to run some numbers and then you'll call them back. That will take the pressure off and give you time to think it through properly. A good client should have absolutely no problem with this.
3. Sometimes it's OK to lower your price if the client asks, but don't do it "just because." It can make you look desperate and unprofessional, or worse, greedy and dishonest (as if your pricing is purely arbitrary and you just want to fleece your client for as much as you can). Instead, offer them some sort of trade off. Maybe the client gets less of something (in my case fewer sketches; simpler artwork; less rights to the work; etc.) or you get more of something (better payment terms; longer deadline; more samples of the final product; an in-kind trade; etc.) Whatever you trade off doesn't necessarily have to have the same monetary value as the discount, but that's not really the point. The idea is to show the client you want to help them and be flexible while, at the same time, not undermining the value of your work.
Thanks, Cedric. To that last point: One of the tricks that good agents know how to do is how to back off a firm price without admitting that they're backing off a firm price. They say, "You will pay my client $5000 or he won't do it. He has a firm, established price for this kind of thing and there's no way in hell he will accept a nickel less. If you were holding his grandmother hostage and threatening to kill her, he would not do it for less than five thousand dollars!"
Sometimes, that kind of demand yields the five thousand dollars. Sometimes, it doesn't. When it doesn't, the client might decide, "Well, four thousand is still good money for this and I'd still like to do it. Can you find some way to agree to that?" That's when the agent has to go back and say…
"You know, my client likes you and he wants to work with you and he believes in your project. Now, he wouldn't do this for anyone else but if you'll send him some free samples of your product, he'll knock a thousand dollars off his price just this once. I advised him not to do this and I"ve never known him to do it for anyone else…but he really likes you."
That way, the client can get the job and the agent can still say, "He is a firm, established price of five thousand." The trick is not to make things precedential and to find an excuse for budging off that firm price just this once. Some people do that all the time and their price remains firm even though they never actually get it.