Jennie and Davis help you understand the psychology of pricing so you get it right
How to price your work as a freelancer? How do you put a price on your art? These are tough questions. Not knowing how to price your work, though, is the business skill failure that is most likely to sink your chances of success. The way you price your goods and services not only determines how much money you will earn but also defines your place in the market.
Take ten minutes, right now, and boost this skill. You might never completely master it. You have to adapt and learn as your skills and the market change so it’s always a good idea to come to this task with, as the Zen proverb says, an empty cup. You can fill an empty cup. You can’t fill a full one.
How to price your work: the third business skill
Knowing how to price your work is a high-level business skill — The Third Business Skill — according to at least one expert — that will make or break your freelance business or side gig. Price your product or service too high and you won’t get the client or make the sale. Price it too low and you’ll wish you didn’t get the client or customer. Price it just right and you get exactly the customers you want.
There is a sweet spot for you and what you are selling. The trick is to find it.
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Here’s how to price your work if you want to fail
I once watched an artist destroy an otherwise thriving business by being psychotic about pricing her original art and custom installations. She often asked me, “How do your price your work?” And I took the time to sit down with her, explain it, and help her figure it out for her work and the clients she wanted.
I went over invoices, calculated expenses, and put a price on her time. I also explained that all of this was a starting point to know her base cost. She also needed to consider her market and what it wanted to pay for the art she was selling.
She could not separate her own erratic sense of self-worth from the process, though. She vacillated wildly between nearly giving her work away — sometimes after spending a great deal of money creating it — and getting angry at people who didn’t pony up ten times more than she’d asked for a piece or installation. This is after they had paid the price she quoted them. Somehow she believed her customers would not only price her work for her but would also help her get over her deep-seated issues with her own self-worth in the process.
Even though she had developed a brand and enough paying clients to keep her busy, profitable, and employed for life, she never made enough money at art to quit her service industry job.
She is no longer a working artist because she failed at this essential business skill. I have heard dozens of stories like this, especially from creative small business people.
When you have a buyer interested, they want to know the price. They aren’t your therapist. They aren’t here to validate you. They have a budget for what this service or item is worth to them. Get your emotions out of it.
There is a science here. (And some art.) It isn’t personal, though. And it’s best to approach the decisions with the application of at least some science.
How to price your work if you want to succeed
For a quick intro, here are two woodworkers explaining the psychology of pricing and how it applies to their business model. Much of this applies to all pricing strategies. So watch and learn. It’s less than 10 minutes long.
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