Pricing Creative Work by Line Item, the Right Way to Do It

[@energygiver]

This was sooooooo good for my brain today! Hearing you breaking down PHASES for this demo project just sent familiar light bulbs into my head!! It makes sensssseee! Thank you Michael

[@morejanda]

Haha. Yes, this conversation will look familiar to you after our call last week.

[@howiesgurl]

What do you do when the client then asks for a breakdown of each of the 3 categories?

[@orangecountywebsites]

His books are gold I bought both. Coaching next. Course next. Love it

[@morejanda]

Thanks dude! Always appreciate you.

[@austinandriese]

I literally stumbled upon this days after asking you these exact questions 😂 Thanks again for the swift response regardless

[@morejanda]

Haha. Yes! I should have just sent this video to you. But I'm always happy to reply. Cheers!

[@LongNguyen-lg3yd]

This is gold, I wish I had been taught these when I was a student. Thank you

[@morejanda]

Hi Long! Yes! My mission is to fill in the blanks of things that people don't learn in school but should. Glad you found this video.

[@jaikumarsivalingam]

Thank you, Michael

[@morejanda]

You're welcome!

[@jermainechase9991]

I has happened to me. The client wanted a website, but had no logo, no content, no direction. After speaking with they realized they needed these things to get the project done. I submitted a proposal for each piece and the client actually started to strip out the pieces they “weren’t sure” they needed. I ultimately did not work on the project because it was very difficult for them to make a decision.

[@morejanda]

Yep. It has probably happened to every designer at some point. We have to be careful how we break down prices! Thanks for sharing your story!

[@mattdeere524]

Super cool, brilliant strategy! Thanks a bunch Michael.

[@morejanda]

Thank you. Glad you like it.

[@walkwithkeon]

Thank you for sharing this !

[@morejanda]

My pleasure!

[@kimmeek2061]

How do I make a line item for a government post construction cleaning bid?

[@ad2graphstudio193]

BRILLIANT concept. I look forward to testing it out.Thx Michael

[@morejanda]

It works for me. Hope it works for you.

[@bineshchandra]

You rock...Thanks Mike!

[@morejanda]

Thank you!!!

[@ElizabethArostegui]

Thanks a lot

[@morejanda]

You're welcome

[@Tech_Advisor_to_CXOs]

In your last example, if I were the client, I don't know what pre-press is, so I'd ask you if we really need it. I think we experts often use jargon which clients don't see the value of. How do we rephrase it to focus on the benefit to the client and not the activity? I have been on both sides of this: when I hired a designer for a logo he said he'll start with "brand guidelines" or some other such mumbo-jumbo, for an extra fee, which I refused saying "I just want a logo". He tried to explain to me but the explanation involved more design jargon like "identity system" which I didn't see the value of. We ended up talking past each other, neither convinced the other, neither learnt anything from the other, and both of us found it to be an unfulfilling conversation. Now, when I consult, and I say "We'll start with a strategy session for $19,000 after which -" and they interrupt with "We don't really need strategy; we need this specific thing". How do we overcome this?

[@morejanda]

Hey Kartick! Thanks for the comments and questions. If you present your proposal to clients, every step of the project is explained including any "jargon." Watch some of my content about presenting proposals and you'll see how I do it. My proposals clearly show a client each phase of the project, describe each service we propose and explain its necessity to achieve the desired result.

[@michaelgebben]

LOVE!!

[@morejanda]

Thanks Michael!!!!!

[@kellywilson]

Yesssss. Omg, that makes so much sense! Thank you!

[@morejanda]

Thanks Kelly! I appreciate the comment. This concept is a game changer.

[@RyanLoweDr]

This is a good one! However, working on a government bid right now (ugh... gross... yuck)... and since they are doing their best to compare apples to apples... And specifically are asking to align to their line item structure, what to do?! We've typically still forced them to align with our process, but I wish I could see the data on aligning with RFPs and RFQs in correlation to bids won/lost/etc. We typically do 1 bid per quarter, so we don't have a big enough data pool to make any assumptions.

[@morejanda]

Ya, those government bids are kind of their own animal. And I'm not too big a fan of that animal. Haha. You are wise in jumping through their hoops for those types of bids.

[@parrishthethoughtpodcast368]

Massive aha moment. Thanks Mike.

[@SimonSteeleMusic]

This is great thank you!!

[@morejanda]

Thanks Simon! So glad you like it!

[@wolfesound]

What if they say the 500 is revising the initial design and the 400 is too high just to prepress.... I had clients steal my designs after the initial concept is shared.

[@morejanda]

Sorry a client stole your design concepts. That sucks. Make sure you have the bulk the budget in items that can’t be pulled out. The numbers I put in the video are just examples. But instead of $500 for design revisions and $400 for pre-press… maybe $800 and $100 is a safer break down.

[@James-uz9se]

You can also ignore line pricing and include the phases for 1 price

[@morejanda]

See my other comment for your other question.

[@diogosampaio42]

Hi Mike, I've one question, what happens if we wanted to do this on a proposal: For example, the client only requested Logo and Business Card, how could we present to the client that for X extra amount of money he could get the letterhead as well? Usually we would say something like: "and for just an extra $400 we can design your letterhead, are you interested?" (not exactly like this, of course). How would we let the client know that he can get it for a better price since we would already be working on his designs ,(rather than not saying anything and he thinking that we could do it later on a seperate project), and still use this amazing strategy that you show on the video?

[@morejanda]

What you are referring to is "economies of scale." I talk about it in my book, Burn Your Portfolio. I also have some plans for content that relates to economies of scale and upselling. Stay tuned.

[@diogosampaio42]

@@morejanda Thanks! I have already bought and started reading the book so I still need to reach that chapter, but it's great that it is in the book 🙌

[@loopdropmedia]

So insightful and helpful as always, Mr Janda! And also reassuring as this has already been my approach! One question though, just playing devil's advocate for a moment - with the former method, if they do take out the letterhead line item, you'd still have a $1500 job. However, with the latter method (which I totally agree with!), because they can't remove an individual phase - is there not just more of a chance they'll take the entire job elsewhere if $1900 is too much for them? As a small solopreneur in the early days of being freelance still, I'd rather have the $1500 job than lose them entirely - any thoughts...?

[@morejanda]

In those cases, you may drop the price a bit due to the revised scope. But you will be in control of how much...not the client thinking that the one element was $400 of the price. If you're worried that they'll take the job elsewhere, then they are not sold on you....they are price shopping. If you feel like your client is price shopping...you need to know their budget and price inside of it, or they will go with the lowest bidder. The ultimate goal is to convince your client that you are the expert, they would be foolish to go somewhere else, and that the value of what you provide for your estimated price is highly in their favor.

[@loopdropmedia]

@@morejanda Amazing, thanks Michael! That's very helpful! 👍

[@James-uz9se]

Should you do line item pricing?

[@morejanda]

I do. I believe people like to see how you arrived at the lump sum price. It depends on the project size. If you are doing an $800 project...maybe you don't need line items. But if you have a $300,000 project....kind of hard to not have some line items leading up to it.

[@FutureFlareX]

Wouldn't it be better if someone steers his projects to a recurring payment schedule instead of using the milestone-based system? For example: The client should send a certain xx% of the total estimated price of the project each 2 weeks. The milestone-based system doesn't ensure timely consistent income.

[@morejanda]

That plan gets messy quickly because the work completed becomes out of balance with the amount paid. For example, you have an estimated 5 month project, with you plan, you could have the client pay 20% per month. In month 1 you complete 10% of the project (you're already out of balance). In month 2 the client is late on assets so you complete 0% of the project... (client delay)...but you still invoiced 20% of the project. Month 3 rolls around and the client decides to shift the focus of their business and cancel the project. They've paid you 30% of the project and they want money back. How much do you give them? (I lived this exact scenario...ended up cutting a check for $54k back to my client 10 months after the project started. Ouch. The best way is to keep your billing aligned with your work completed. The more you can keep that in balance, the better both you and the client feel about the relationship. Watch my video "Phased Production Strategies for Websites" - I go into detail in that video.

[@FutureFlareX]

@@morejanda Great explanation! Thank you!

[@morejanda]

@@FutureFlareX You're welcome!