It’s easy to badmouth guesswork-based pricing decisions, but what’s the alternative? Proper, well-grounded pricing is a lot like the Peking Duck recipe – the recipe is not a secret, but the ingredients are hard to do well.
– First, there’s the “total task price” – the direct expenses you have by spending time on this and not something else [estimated production time x 1.2 x standard hourly rate + any additional expenses spent on the project]. That’s the easy part.
– Second, there’s the “market average”. In fact, there are at least 2 of them: the high market average that gets paid out for specialized, urgent, or otherwise marked-up projects, and the marked-down low market average. These are separate cases, resulting in 2 numbers.
– Third, the clients you target will have a smaller range of “budget average” that will be a bit higher than the low market average.
All of the above represents information that is available to you if you want to know. It takes about a month to gather or glean, but that’s usually not nearly as hard to learn as people usually think it is.
Every day, random clients who have no idea about your industry ask about and successfully get answers about the pricing landscape you work in. If they can do it, so can you.
Once you have a good idea of the ranges, building your price list is mostly about finding their intersections. I’ll write about that in part 2.