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Golden Mean Pricing

In this online series I will help you to understand the thought process behind Golden Mean Pricing by taking you through the common pricing struggles creative professionals face, how the anatomy of a project affects price, what other models out there have contributed to Golden Mean Pricing, and how to implement Golden Mean Pricing yourself.

Accurately Quote Creative Projects Using Golden Mean Pricing

"I wanted a pricing system that calculated the situation and allowed me to make an educated decision."
Tim Bouchard Partner

One of the hardest things for any freelancer, small business owner, or business developer to dial in accurately is the pricing of unpredictable creative projects.

Creative projects can range from copywriting, to design, to development. The unique thing about the creative industry is the multitude of factors that go into pricing along with the nonuniformity of the trade itself. Less frequently are any two projects identical, unlike a commodity or a systematic service offering where a consistent deliverable requires a consistent fixed price based on its market competitors.

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Frequently Asked Creative Project Pricing Questions

What if my Golden Mean Range is too narrow?

This can either be a blessing or a curse.

It's possible your hourly estimates are very close to your efficiency and the client's budget meaning you are dialed in. That is a great thing, since a narrow golden mean range reflects an easy pricing scenario.

On the flip side, the client's budget revealed that they are cutting it close by asking for the amount of work you are tasked with pricing. This is still ok, just be careful to prevent scope creep after starting the project.

What to I do if the Minimum Floor Price is always too high?

This can be a result of your hourly rate not being compatible with the clientele you are getting business inquiries from. Reasons your hourly rate may appear to be too high:

  1. You're over estimating your value compared to competitors.
  2. You may need to work on your efficiency due to over estimating how long a task will take.
  3. Your quality of work and experience is outgrowing your word of mouth and referral clientele. It may be time to think about targeting larger clients.

What happens when the client's budget falls below my Minimum Hourly Floor Price?

First, consider if you are assigning an hourly rate beyond what your actual value is compared to your competitors. Second, consider if the client is compatible with your level of expertise. It may be possible that you have outgrown that sector of your potential client base. Third, be aware of client's that may have the budget, but are either trying to negotiate from day one or need to be educated on the amount of work going into their project and how it will be accomplished.

The key to this scenario is deciding if your price is causing the issue, the type of client, or the client's familiarity with the type of work and it's value.

How do I figure out the Maximum Value Based Price?

The Maximum Value Based Price should reflect the "pie in the sky" project price. You consider a few factors to arrive at this:

  1. The client's budget. This will tell you the limits you can push to (or slightly beyond) to deliver the perfect solution.
  2. Your capabilities to execute a superb outcome. The absolute best way to accomplish the client's goals. This may be bringing in an outside contractor to increase value to the client or adding services that will support the original requested work scope.
  3. Consider the client's marketplace and business model. A business model with a higher conversion rate and a high return on conversions may be more open to expanding the budget if you provide the reasoning and services to improve that conversion percentage ROI.

What things should I consider when pricing within the Golden Mean Range?

This is the part of Golden Mean Pricing that will take practice on your part. Consider these factors:

  1. If the budget is low, but within the Golden Mean Range, price the most essential parts of the project and remove extras from the project to keep the price low, but address all the client's needs.
  2. If the budget is higher, you can work higher in the Golden Mean Range and price a project with added services to justify the cost increase.

Either situation still provides a comfortably priced and goal oriented project proposal for the client and dials in the scope of work for you the vendor.

Related Creative Project Pricing Resources

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