Pricing Your Branding Services: You’re Doing It Wrong, and I’ll Prove It

It’s (potentially) a million-dollar question:
What’s the “right” price for branding services?

The answer: There isn’t one. Now, before you feel like I tricked you, understand that the reason there isn’t a “right” price is that most agencies don’t know how to price their services. 

Instead, they base their prices on what other people charge. When they buy easily, you think you’re probably too low. When they say you’re too expensive, you automatically think it’s because of your price. And then, you lower your prices (gasp!). In the end, you’re left with no idea how to price your services and feel confident about it. 

Over time, all that revenue that you potentially lose because you don’t get the pricing question right can affect your business’s lifetime value—you might be leaving a million dollars on the table!

Wouldn’t it be nice if you knew what your prices should be and felt really good about them being the “right” prices?

It’s possible,

and it starts with choosing the right criteria for your pricing.

Overcoming the ‘Where Should We Eat?’ Effect

Setting your branding agency’s pricing is a lot like what I call the “where should we eat” effect. 

Ever been with a group of people who were trying to figure out where to go for dinner?

Everyone wants to be cooperative, but they all have their preferences, too. So everyone says they don’t care where they eat. But then someone suggests sushi, and another person says, “Oooh, anything except sushi.” So someone else mentions Italian and, lo and behold, someone just had Italian for lunch. Rinse, repeat. 

This happens when there are no clear criteria for making a decision. Everyone will go around in circles and never feel like they’ve made the right decision.

That’s how most branding agencies are with their pricing.

They set their pricing based on what they think they can get. Then, they somehow get convinced their prices are too low, so they increase them. And then, a prospect doesn’t hire them because they were too expensive. So they question themselves again and then lower their prices. 

After all that, maybe someone else says it’s still too expensive. They’re just stuck in this purgatory, wanting to charge more but feeling like nobody will pay their pricing.

The Best Criteria for Pricing Your Branding Services

When you price your services without clear criteria, you’re never going to feel good about your choice of what to charge. No matter where you land, it doesn’t feel like the best decision. What if you’re missing out on major profits?

What if people think you're a total rip-off?

And then there’s my approach: Choose pricing based on clearly defined criteria!

But those criteria are not based on what other people tell you. Just like dietary preferences, everyone has an opinion. If you let others influence your pricing, you will never be able to confidently set a price you feel good about.

And guess what? Clients need YOU to believe in your pricing.

What happens when you don’t? Not only do you get shaken when people tell you you’re too expensive, but you’re more likely to negotiate with clients when they ask.

And when you negotiate with clients (i.e., lowering your prices just to get the job), you immediately lose all credibility, and it becomes nearly impossible to run that project efficiently. Now the client knows that you will do anything to get their business, and you’ll probably also do anything to accommodate them throughout the project. This is what leads to projects that go on forever. 

And projects that go on forever are rarely profitable.

Instead, I recommend you determine your pricing based on what YOU need to run a sustainable business. This way, there is a reason to charge what you do. When someone wants to pay less, you will know that you don’t want them as a client because they will make your business unsustainable. And unsustainable businesses, by definition, will go out of business.

Finding Your Pricing Sweet Spot

How do you figure out the dollar amount to charge? Naturally, it varies between agencies. 

I developed a simple system called the 50/25/25 rule that will help you decide what you need to charge based on what you and your business need.

Now, you may not be able to charge what you need to charge at first. But once you know what your goal price is, you can make the proper changes in your business to attain that price point.

And once you hit it, you’ll have a system for increasing it further and a reason to increase it.

You can read more about the 50/25/50 rule here.

Instead of relying on the arbitrary pricing you have used in the past, you know exactly what you need to charge to reach your business goals. Your confidence in your pricing will not only help you land more clients but also build trust with those clients. Your price and how you feel about it can greatly impact the relationship you have with your clients from the beginning, and that contributes to the success of your projects.