The year-end is upon us. Inflation is skyrocketing. Like seriously, according to Reddit u/owns_dirt, frozen chicken wings are a $1.33 each!
It's a good time to revisit your pricing for 2023.
It doesn't matter if you charge by the hour or on a fixed-price basis. At the end of the day, you're charging for your time.
Whether it's future time or time you've already spent productizing your service. It's time. We believe time is the most valuable commodity we have. Sec...just remembered, need to delete browser history...
That brings us to how you value your time and the importance of doing it right.
At a high level, this is how we'll complete our annual review for our Creative Director pricing, currently at $85/hr:
First, we'll compare our current pricing to competitive/market benchmarks. It's a good idea to refer to a credible source. In doing so, we not only compare the current rates being charged by self-employed professionals, but also what our clients pay for the same services in house.
This is a great find. It's a huge open-sourced Google Sheet of salaries and demographics. When we review the data (sheet above + our completed jobs + public job postings) we find a wide range of market prices.
From $60,000 full-time to $270,000. Our rates fall well within that range, towards the lower high-end at $175,440 per year on a full-time basis ($85 x 172h a month x 12) including benefits etc.
This may seem subjective, because it is. But here we go. We first assess a value on our time. Beginning with our personal time. This helps define the perceived value of our professional time.
For us, the assessment is, high! It probably should be the same for you too.
Then we have to rationalize that against client perception. I mean Ambreen's mom thinks she's the best and her time invaluable. It doesn't mean people are going to pay a premium for it. This comes down to the simple metric of "What's a client willing to pay me?"
The final variable to consider here is ROI. Is it tangible? Is it perceived? Meaning, does my time—that my client pays for—lead to a measurable benefit for them?
Do they realize it? E.g. if my services are performed overnight vs. my client's time, then there's a perceived performance benefit because they're getting results before the start of the next day.
We've understood the market, the competition, assessed our value on time, and determined whether or not that value is perceived by our clients. In light of which, we've decided that an increase to our pricing for the Creative Director of $10/hr. is fair and reasonable, considering the fact that hot dogs in the latest episode of Yellowstone cost 9 bucks.
New rate: $95.
Next steps, inform all active contracts of the increase with reasonable notice, because we love us some 🌭!
We're building an open-sourced tool to help you with pricing. Until it's launched, don't hesitate to reach out to us with any questions. Just reply to this email, we read each one and will respond.
👏🏽 Bold pricing strategies for 2023
About Rebekah Radice
Rebekah Radice, co-founder of BRIL.LA, has traded narcissism for purpose. When not driving growth, you'll find her tricking family into thinking she's Emeril Lagasse - likely covered in marinara. The spotlight was fun, but impact is better. These days she's using 20+ years of brand brilliance for good.