21 min
Stop Competing On Prices Resourceful Designer: Strategies for running a graphic design business
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- Design
Lowering your prices can hurt your design business.
I was talking to a fellow designer recently who is concerned about competing on prices. He asked me what I do if a client says they can pay less for a logo at Fiverr, Upwork, 99 Designs, or any other discount design platforms.
This isn't the first time I've heard this concern from a designer. You may have experienced this exact thing with your clients questioning your prices compared to discount design sources.
The fact of the matter is, competing on prices is a no-win scenario. There’s no way that you can compete with the prices these places offer. Ok, maybe that’s not true. Sure you could lower your price to their level, but what would it accomplish? You would be selling your services for a pittance, and cementing yourself in a rut that would be difficult to escape. Competing on prices is not a sustainable way to run, let alone grow, your design business.
I’m going to make this a two-part series. Next week I’m going to explain how I respond to clients who say, “I can get it cheaper elsewhere.”
For now, I want to explain why competing on prices is a harmful and unsustainable way to run your business.
It all comes down to this. If you offer rock bottom prices, you will never be taken seriously as a designer, let alone a business owner.
If you try to match the pricing found on places like Fiverr or Upwork or 99 Designs, You’ll end up developing an unfavourable reputation that will be extremely difficult to overcome. You'll have a tough time trying to raise your prices in the future, which you will need to do if you plan on making a decent living at this design life.
Are you familiar with the concept of a “dollar store”? There’s probably at least one, if not many around where you live. The premise of a dollar store is that just about everything they sell costs between one to three dollars. They're known as cheap discount stores.
Dollar stores have a reputation for selling cheap merchandise. Not just in price, but in quality as well. After all, just how good can a $2 butcher’s knife or a $1 mini speaker be? And These stores are ok with that reputation. They make no claims that they are anything but what they are. Dollar stores don’t make their money by selling quality products; they make it by selling quantities of products. They make their money one dollar at a time.
Could you imagine if all of a sudden a dollar store decided to sell a crystal wine decanter for $50? Their customers would question the validity of that product. There must be something wrong with the decanter, or it must be sub-par in some way. Nobody would take them seriously, let alone believe the decanter is worth $50. It’s a dollar store, after all. And their reputation for selling cheap merchandise for low prices would hurt them.
That’s what happens to your design business when you try to compete by lowering your prices. Nobody will take you seriously as a designer, especially if you later decide to raise your rates.
So how do you deal with discount designers taking clients away from you? The answer is easy; stop competing with them. In fact, and this may sound weird to you, but if you feel discount designers are your direct competition, the best solution is to raise your prices.
Wait; what? How can raising prices help in this situation? I’m glad you asked.
I talked about this in an early episode of Resourceful Designer. In it, I explained how Raising your prices can lead to getting better graphic design work and more committed clients.
Recently I was listening to Tom Ross’s Honest Entrepreneur podcast, episode 87, to be specific. Tom is the founder of Design Cuts. He was on episode 155 of Resourceful Designer where we talked about supplementing your income by selling design products.
Tom mentioned an excellent point in episode 87 of his show. The biggest issue with pricing low is that the lower your price, the more designers you’re competing
Lowering your prices can hurt your design business.
I was talking to a fellow designer recently who is concerned about competing on prices. He asked me what I do if a client says they can pay less for a logo at Fiverr, Upwork, 99 Designs, or any other discount design platforms.
This isn't the first time I've heard this concern from a designer. You may have experienced this exact thing with your clients questioning your prices compared to discount design sources.
The fact of the matter is, competing on prices is a no-win scenario. There’s no way that you can compete with the prices these places offer. Ok, maybe that’s not true. Sure you could lower your price to their level, but what would it accomplish? You would be selling your services for a pittance, and cementing yourself in a rut that would be difficult to escape. Competing on prices is not a sustainable way to run, let alone grow, your design business.
I’m going to make this a two-part series. Next week I’m going to explain how I respond to clients who say, “I can get it cheaper elsewhere.”
For now, I want to explain why competing on prices is a harmful and unsustainable way to run your business.
It all comes down to this. If you offer rock bottom prices, you will never be taken seriously as a designer, let alone a business owner.
If you try to match the pricing found on places like Fiverr or Upwork or 99 Designs, You’ll end up developing an unfavourable reputation that will be extremely difficult to overcome. You'll have a tough time trying to raise your prices in the future, which you will need to do if you plan on making a decent living at this design life.
Are you familiar with the concept of a “dollar store”? There’s probably at least one, if not many around where you live. The premise of a dollar store is that just about everything they sell costs between one to three dollars. They're known as cheap discount stores.
Dollar stores have a reputation for selling cheap merchandise. Not just in price, but in quality as well. After all, just how good can a $2 butcher’s knife or a $1 mini speaker be? And These stores are ok with that reputation. They make no claims that they are anything but what they are. Dollar stores don’t make their money by selling quality products; they make it by selling quantities of products. They make their money one dollar at a time.
Could you imagine if all of a sudden a dollar store decided to sell a crystal wine decanter for $50? Their customers would question the validity of that product. There must be something wrong with the decanter, or it must be sub-par in some way. Nobody would take them seriously, let alone believe the decanter is worth $50. It’s a dollar store, after all. And their reputation for selling cheap merchandise for low prices would hurt them.
That’s what happens to your design business when you try to compete by lowering your prices. Nobody will take you seriously as a designer, especially if you later decide to raise your rates.
So how do you deal with discount designers taking clients away from you? The answer is easy; stop competing with them. In fact, and this may sound weird to you, but if you feel discount designers are your direct competition, the best solution is to raise your prices.
Wait; what? How can raising prices help in this situation? I’m glad you asked.
I talked about this in an early episode of Resourceful Designer. In it, I explained how Raising your prices can lead to getting better graphic design work and more committed clients.
Recently I was listening to Tom Ross’s Honest Entrepreneur podcast, episode 87, to be specific. Tom is the founder of Design Cuts. He was on episode 155 of Resourceful Designer where we talked about supplementing your income by selling design products.
Tom mentioned an excellent point in episode 87 of his show. The biggest issue with pricing low is that the lower your price, the more designers you’re competing
21 min