How to Handle Price-Sensitive Design Clients

Justyn Hornor

Over the years, I’ve found that clients typically fall into two extremes when it comes to pricing: the “I don’t care” crowd, and price-sensitive clients. Of course, my favorites are the ones that don’t care about the price, but these are few and far between. Generally speaking, most clients seem to fall into one of these two categories:

  1. I Don’t Care: Some clients simply don’t care about the price. In reality, they do, but they likely have experience with what they’re asking you to do and know what it will cost before they send in a request for a quote.
  2. Price-Sensitive: These clients may have never worked with a designer or developer before and don’t know what to expect. Sticker shock is normal and sometimes extreme.

In this article, I’ll give you some insights into dealing with price-sensitive clients – the folks that tend to express consternation when they see how much it’s going to cost to get the job done.

Provide Details

First and foremost, I use the process of sending the client a quote for my work to achieve several things in at once: clarify the work, break the work into discrete chunks, and show the client how various parts of the project affect the pricing.

First of all, a quote provides a great way for you to clarify what your clients want you to do. I usually include a 2-3 sentence summary of what I think the client is asking me to do. For example:

“Update the homepage of your site with the new logo and change the colors of the links and headers to match the new color scheme.”

This description provides a simple, plain-English statement of the work to be done. They may not know what CSS is or image formats like PNG and JPG mean.

Next, I’ll break the work down into chunks. This is for my own benefit as well as my client’s. If my job was to both design and implement a new logo on a client’s site, as well as update their site’s colors, my quote may look something like this:

Description Hours Rate Total
Research logo ideas 3 $ $$$
Design logo 5 $ $$$$$
Upload logo to site (PNG) 1 $ $
Change H1, H2, H3, AHREF (visited, hover) CSS 2 $ $$
TOTAL $$$$$$$$$$$

The client can now also see what costs them the most and have an opportunity to discuss how they can reduce the costs of various parts of the project.

Providing details empowers your clients, but it also does something far more important — it develops trust. When they can see why your project costs what it does, they’re much more willing to discuss concerns. Handing them a total with no explanation is a great way to get a very frustrated response from price-sensitive clients. Or worse, no response at all, as they may just get a quote from someone else.

Be Willing to Explain Yourself

Once you have the quote in their hands, be willing to explain how you came up with your figures. You’d better have a pretty good idea as to why it’s going to take you so long to design the logo, using the above quote as an example.

You know your clients and their knowledge-base. Talk to them in terms they understand — avoid industry jargon. Most clients just don’t know how you do your job and may need an explanation of the quote.

When they’re experiencing sticker shock, often they’re looking for a way to justify the cost in their own heads. Giving them a calm, rational explanation can go a long way towards calming them down or at least helping them understand the price.

Give Price Sensitive Clients Options

If you are getting aggressive push-back from the client regarding your price, you may have to give them some options. Using the quote from above, ask them to send you some logo ideas and cut your research down to one hour instead of three. Possibly cut your logo design time with the understanding that you may not be able to get all the details they need with less than your quoted time.

I also like to offer pricing options. Maybe spreading payments out over a few months or even giving them 60 days to pay can be the difference between a concerned client and a content one. Small businesses especially are sensitive to cash flow, so giving them payment options can really help them decide to pull the trigger on your project.

Know Your Limits

Lastly, make sure you know what you’re willing to do or not do. I’ve had to turn down projects because I couldn’t do the job for the price the client wanted. In other cases, the projects got to be so small that it wasn’t worth my time.

Know what you’re willing to do. If you need research for a logo design or testing/debugging for a development project, put it in your quote. If the client doesn’t want to pay for that, you may need to decline the work. The last thing you want to do is put out sub-par work that could bite you in the backside later.

In Sum…

You’re going to eventually run into price-sensitive clients. This is especially true with small businesses where cash is critical to daily operations. Providing a detailed quote can help establish what it is you’re doing, the parts and pieces of the project, and how much each part costs. This springboards into discussion points.

Flexibility is the key, but know your own limits. Don’t get yourself into a situation where you can’t pay your own bills or have to compromise your own professional standards. It’s never worth compromising your standards and rarely worth cutting your price way back. So, stick to your standards and be gracious if they just can’t afford you.

Have you had any experiences with price-sensitive clients? How do you approach delicate matters like project cost vs. complexity?

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  • http://item-9.com Jason Pelker

    Better advice: don’t work with price sensitive clients.

    If you have to, though, just use 10-hour retainer blocks. If you use agency pricing like the example above, your cheapo clients will always creep your scope up with change requests and over-communication.

    • http://georgelangley.ca George Langley

      Better yet – turn those price-sensitive clients into educated ones. I mean, I have no idea what goes on in my transmission.

  • Jessica

    I think the key is knowing what clients are the right fit for your business. I’ve found that the smaller the client and therefor the smaller their budget, the more they expect/want from me. So I end up spending twice as much time, as they have to be hand-held, and end up loosing money in the end. I understand what the author is saying about itemizing your estimate, which I usually do, but with the smaller/price-conscious clients, they tend to nit-pick and try to negotiate things “out” of the cost. It’s hard to meet their expectations when a part of the process is removed. So the key is, you really have to know when to take on the project or when to walk away.

    • http://v-sopdesign.com Arlene

      Jessica is right! Some clients would start questioning why certain items are needed and why certain items take so long to complete. It is even worst when they compared the quote with another competitor.

      Therefore, it is important to pick the right clients at the start, if you think they are going to cost more than you are getting from them. It’s best not to take up the job!

  • http://www.numinousmedia.com Ryan

    Very few clients (that I’ve worked for) are completely price “in-”sensitive, especially if they are smaller businesses or non-profits. That pricing breakdown structure has been very helpful to me in the past, and helps them understand exactly how I work, and why I cost what I cost. To avoid scope creep and excessive change requests, I make it very clear at the beginning on the process that any time I invest over the hours I’ve proposed in my estimate will get billed at my normal hourly rate.

    I’ve also found, strangely enough, that if the client pays something up front, they tend to be less picky down the road. I’m not sure why this is the case, but that’s the way it’s worked out so far.

  • http://www.kiskadigital.com Roi Agneta

    I completely disagree with providing highly detailed quotes or estimates, e.g. $x for research and $x for design. By doing so you open yourself up to nitpicking, as Jessica pointed out. My approach is to quote on high-level deliverables (with an appropriate level of detail), not project tasks.

    • http://www.adwizbranding.com George Pytlik

      I used to show detailed line items on my estimates. Many clients loved it, because it showed them how the bill adds up, and when they understood it they didn’t complain.

      But I had a couple of highly bureaucratic companies (large companies) that used it against me, trying to nitpick every line item against the invoice, asking me to show that I spent exactly that much time on each item — exactly as Roi Agneta describes. It was a nightmare and I had to change tactics.

      What I do now is give them a detailed list of the kind of tasks involved in completing a typical project, but with no specific times attached. It’s just a generic list of what designers do in cases like these. This addresses the issue of helping educate them as to the budget, while protecting the billing process from nitpicking. Best of both worlds.

  • http://uglyfashionmedia.com Eoin Oliver

    I find that removing some things from the job, or reducing the time spent on them can be detrimental to my own work. That could lose me work in the future when people see my portfolio. Keep the quality high and you can charge accordingly.

    If you lose jobs based on price but you know it’s the right price, then don’t worry, if your quality is high, another customer will come along.

  • http://www.benhamdesignconcepts.com Brian Benham

    When 1st starting out and trying to make a name for yourself, I have found it helped me to give a discount to a client that has a project that showed off my skills. Basically buying the job so you can use it in your portfolio to show new clints. Lets face it, when someone hires you they want to see examples of your work so they know you can do what you claim to do.

  • http://www.alabiansolutions.com Alabi Adebayo

    Great article. Clients are more sensitive to price especially when they cannot connect the amount been paid with the value of the service been rendered. I encounter this with majority of my prospect since I work in Nigeria where small business find it hard to see the value of web technology.