5 ms·

The Dark Art of Pricing

70 points by taylorbuley 15y ago

chopsueyar 15y ago
Here is an excellent article on pricing, published in Harvard Business Review some years ago (it is such a great article, I feel obligated to provide it to the HN crowd)... http://www.amazon.com/gp/product/B00005RZ5D/ref=as_li_ss_tl?ie=UTF8&tag=littdidd-20&linkCode=as2&camp=217153&creative=399701&creativeASIN=B00005RZ5D http://www.amazon.com/gp/product/B00005RZ5D/ref=as_li_ss_tl?... How Do You Know When the Price Is Right? by Robert. J. Dolan Published Sep 01, 1995
- revorad 15y ago
  I didn't know Amazon sells PDFs!
  - _delirium 15y ago
    It's one of their ebook formats, though not the one most publishers use. Seems to be mainly used by a few academic publishers (like HBR) that uploaded their whole back catalog as PDF.
- USSRLivesOn 15y ago
  It appears that there is a free version of this article available here: https://www.u-cursos.cl/ingenieria/2009/1/IN578/1/material_docente/objeto/225558 https://www.u-cursos.cl/ingenieria/2009/1/IN578/1/material_d...
  - chopsueyar 15y ago
    Nice.
chopsueyar 15y ago
How about "The Dark Art of Getting Your Client to Pay You the Agreed Upon Amount in a Timely Manner"?
- jpwagner 15y ago
  I would read that!
- weaksauce 15y ago
  Here is a great talk on that subject; well worth the 40 minutes if you are interested in this subject: "F*ck you. Pay me.": http://vimeo.com/22053820 http://vimeo.com/22053820
  - Dylanlacey 15y ago
    I do love that talk, but it all basically boils down to: * Have a lawyer * Have them create you a standard contract * Don't ever talk without lawyering, to their lawyer * Never assign rights of any sort "Until full payment is received" (At least for that point in the work)
deleted 15y ago
[deleted]
sambenson 15y ago
Could this be applied to development work as well? I.e Mobile / web apps...
- petercooper 15y ago
  Thankfully the software development game isn't quite as arcane and antiquated as the visual arts. If you pay a coder $250 an hour to write some code for you from scratch, you generally get to use it for more than a year or on more than one specific server without being charged additional "licensing" fees. And that's a good thing.
JacobAldridge 15y ago
I recently finished Priceless: The Hidden Psychology of Value by William Poundstone [1] A number of great lessons in this, but perhaps the key one was that pricing is not as much of a 'dark art' as many of us believe. There's a good deal of scientific research into pricing successfully and profitably, which is detailed therein. In relation to the OP, of course you need to know where to start - is $100/hour high or low for my industry and my experience? - etc. Once you have that information you can build your pricing strategy The next step (as chopsueyar alludes to elsewhere in this discussion) is clearly communicating all of the right expectations so you do what the client wants, the client is delivered what they want, they pay you on time, and you have the choice to delight them and win loyalty and/or referrals. [1] http://www.amazon.co.uk/Priceless-Hidden-Psychology-William-Poundstone/dp/1851687823 http://www.amazon.co.uk/Priceless-Hidden-Psychology-William-...
Revisor 15y ago
I will join the book recommendations with THE book on pricing - The Strategy and Tactics of Pricing http://www.amazon.com/Strategy-Tactics-Pricing-5th/dp/0136106811/ http://www.amazon.com/Strategy-Tactics-Pricing-5th/dp/013610... I'm reading it for a second time right now and it's stuffed with actionable information on pricing, value communication (aka marketing), price communication, purchase cycle, pricing over the product lifecycle and so on.
suivix 15y ago
To whomever's site this is, the font looks really bad on Google Chrome: http://i.imgur.com/MZuXS.png http://i.imgur.com/MZuXS.png
- hippich 15y ago
  Whatever browser you use, fonts look gorgeous on Google Chrome: http://img6.imagebanana.com/img/x10gyshc/Selection_002.png http://img6.imagebanana.com/img/x10gyshc/Selection_002.png
  - AltIvan 15y ago
    There is something wierd here; in Google Chrome 13.0.782.220m it doesn't looks so nice as you but not so ugly as the parent comment. http://i.imgur.com/NC0fH.png http://i.imgur.com/NC0fH.png
- kristofferR 15y ago
  It's not Chrome's fault, it's Windows'. Font rendering sucks on Windows compared to on OS X.
tgrass 15y ago
I am seeing this request made more and more frequently by designers: By helping to keep pricing standards high, you not only help yourself by avoiding the title of “The Poor Man’s Marian Bantjes” (essentially the creative equivalent of a knock-off handbag), you also help every other young designer struggling to get paid out there, and help every designer that came before you to continue making a living doing what they love. Low wages here are a sign of a labor market saturated by qualified designers. Pleading with youth to raise their wages in order to protect the interests of those whose careers and income are already established is disingenuous at best, and naive at worst.
- bornon5 15y ago
  Yes, if most young designers demanded respectable wages, it would help established designers. But to claim that that's the only motive for this kind of plea isn't fair to the people succeeding in the industry. I recently graduated from art school. Nearly ever one of my illustration professors (all established illustrators) harped on this issue, encouraging us to demand industry-standard wages, and to turn down jobs that paid dirt. It wasn't hard to see that they love the profession, and want to see it supported in perpetuity. By making sure that the next generation of designers continues to convince the world that illustration is an art form worth paying for, they're supporting an endeavor they love. Call it passing the torch. That it helps them continue to earn a living is fully beside the point.
- eftpotrm 15y ago
  This only encourages a race to the bottom though, which doesn't help them build viable, sustainable long-term careers. While I see where you're coming from, I do still think the advice is sound in the long term.
- dominicyen 15y ago
  I attribute low wages to the lack of education of industry-standard rates. The author brings up a great point about the concealment of pricing amongst creatives to prevent others from knowing your annual income. How can students be expected to know how much to charge when their instructors and peers aren't inclined to speak openly about their numbers? Without this baseline of information, young designers (myself included) fall into the trap of pricing far below market due to misinformed notions of 'this is great experience!' or 'I need to get my name out there'. An aside: Qualified is an ambiguous term in relation to design. Expand on what you consider 'qualified' please.
enjo 15y ago
If you think that is a good price for a professional designer to earn crafting what is essentially a logo for a huge company, you are mistaken. Huh? Why would the size of the company and the reach of the logo matter in the slightest? It's this type of thinking that makes dealing with designers somewhat frustrating. I will never (EVER!) pay royalties for work that I commission. If I'm paying you to build it, I'm paying you to build it for me. It's mine. The thing is, I've yet to have trouble finding someone to do that for me. I've run into this situation on a few occasions. On each I've politely said no thanks and took my business to someone who was willing to do it for a reasonable fee with full rights assignment to me.

70 points by taylorbuley 15y ago

Here is an excellent article on pricing, published in Harvard Business Review some years ago (it is such a great article, I feel obligated to provide it to the HN crowd)... http://www.amazon.com/gp/product/B00005RZ5D/ref=as_li_ss_tl?ie=UTF8&tag=littdidd-20&linkCode=as2&camp=217153&creative=399701&creativeASIN=B00005RZ5D http://www.amazon.com/gp/product/B00005RZ5D/ref=as_li_ss_tl?... How Do You Know When the Price Is Right? by Robert. J. Dolan Published Sep 01, 1995

revorad 15y ago
I didn't know Amazon sells PDFs!
- _delirium 15y ago
  It's one of their ebook formats, though not the one most publishers use. Seems to be mainly used by a few academic publishers (like HBR) that uploaded their whole back catalog as PDF.
USSRLivesOn 15y ago
It appears that there is a free version of this article available here: https://www.u-cursos.cl/ingenieria/2009/1/IN578/1/material_docente/objeto/225558 https://www.u-cursos.cl/ingenieria/2009/1/IN578/1/material_d...
- chopsueyar 15y ago
  Nice.

chopsueyar 15y ago

How about "The Dark Art of Getting Your Client to Pay You the Agreed Upon Amount in a Timely Manner"?

jpwagner 15y ago
I would read that!
weaksauce 15y ago
Here is a great talk on that subject; well worth the 40 minutes if you are interested in this subject: "F*ck you. Pay me.": http://vimeo.com/22053820 http://vimeo.com/22053820
- Dylanlacey 15y ago
  I do love that talk, but it all basically boils down to: * Have a lawyer * Have them create you a standard contract * Don't ever talk without lawyering, to their lawyer * Never assign rights of any sort "Until full payment is received" (At least for that point in the work)

deleted 15y ago

[deleted]

sambenson 15y ago

Could this be applied to development work as well? I.e Mobile / web apps...

petercooper 15y ago
Thankfully the software development game isn't quite as arcane and antiquated as the visual arts. If you pay a coder $250 an hour to write some code for you from scratch, you generally get to use it for more than a year or on more than one specific server without being charged additional "licensing" fees. And that's a good thing.

JacobAldridge 15y ago

I recently finished Priceless: The Hidden Psychology of Value by William Poundstone [1] A number of great lessons in this, but perhaps the key one was that pricing is not as much of a 'dark art' as many of us believe. There's a good deal of scientific research into pricing successfully and profitably, which is detailed therein. In relation to the OP, of course you need to know where to start - is $100/hour high or low for my industry and my experience? - etc. Once you have that information you can build your pricing strategy The next step (as chopsueyar alludes to elsewhere in this discussion) is clearly communicating all of the right expectations so you do what the client wants, the client is delivered what they want, they pay you on time, and you have the choice to delight them and win loyalty and/or referrals. [1] http://www.amazon.co.uk/Priceless-Hidden-Psychology-William-Poundstone/dp/1851687823 http://www.amazon.co.uk/Priceless-Hidden-Psychology-William-...

Revisor 15y ago

I will join the book recommendations with THE book on pricing - The Strategy and Tactics of Pricing http://www.amazon.com/Strategy-Tactics-Pricing-5th/dp/0136106811/ http://www.amazon.com/Strategy-Tactics-Pricing-5th/dp/013610... I'm reading it for a second time right now and it's stuffed with actionable information on pricing, value communication (aka marketing), price communication, purchase cycle, pricing over the product lifecycle and so on.

suivix 15y ago

To whomever's site this is, the font looks really bad on Google Chrome: http://i.imgur.com/MZuXS.png http://i.imgur.com/MZuXS.png

hippich 15y ago
Whatever browser you use, fonts look gorgeous on Google Chrome: http://img6.imagebanana.com/img/x10gyshc/Selection_002.png http://img6.imagebanana.com/img/x10gyshc/Selection_002.png
- AltIvan 15y ago
  There is something wierd here; in Google Chrome 13.0.782.220m it doesn't looks so nice as you but not so ugly as the parent comment. http://i.imgur.com/NC0fH.png http://i.imgur.com/NC0fH.png
kristofferR 15y ago
It's not Chrome's fault, it's Windows'. Font rendering sucks on Windows compared to on OS X.

tgrass 15y ago

I am seeing this request made more and more frequently by designers: By helping to keep pricing standards high, you not only help yourself by avoiding the title of “The Poor Man’s Marian Bantjes” (essentially the creative equivalent of a knock-off handbag), you also help every other young designer struggling to get paid out there, and help every designer that came before you to continue making a living doing what they love. Low wages here are a sign of a labor market saturated by qualified designers. Pleading with youth to raise their wages in order to protect the interests of those whose careers and income are already established is disingenuous at best, and naive at worst.

bornon5 15y ago
Yes, if most young designers demanded respectable wages, it would help established designers. But to claim that that's the only motive for this kind of plea isn't fair to the people succeeding in the industry. I recently graduated from art school. Nearly ever one of my illustration professors (all established illustrators) harped on this issue, encouraging us to demand industry-standard wages, and to turn down jobs that paid dirt. It wasn't hard to see that they love the profession, and want to see it supported in perpetuity. By making sure that the next generation of designers continues to convince the world that illustration is an art form worth paying for, they're supporting an endeavor they love. Call it passing the torch. That it helps them continue to earn a living is fully beside the point.
eftpotrm 15y ago
This only encourages a race to the bottom though, which doesn't help them build viable, sustainable long-term careers. While I see where you're coming from, I do still think the advice is sound in the long term.
dominicyen 15y ago
I attribute low wages to the lack of education of industry-standard rates. The author brings up a great point about the concealment of pricing amongst creatives to prevent others from knowing your annual income. How can students be expected to know how much to charge when their instructors and peers aren't inclined to speak openly about their numbers? Without this baseline of information, young designers (myself included) fall into the trap of pricing far below market due to misinformed notions of 'this is great experience!' or 'I need to get my name out there'. An aside: Qualified is an ambiguous term in relation to design. Expand on what you consider 'qualified' please.

enjo 15y ago

If you think that is a good price for a professional designer to earn crafting what is essentially a logo for a huge company, you are mistaken. Huh? Why would the size of the company and the reach of the logo matter in the slightest? It's this type of thinking that makes dealing with designers somewhat frustrating. I will never (EVER!) pay royalties for work that I commission. If I'm paying you to build it, I'm paying you to build it for me. It's mine. The thing is, I've yet to have trouble finding someone to do that for me. I've run into this situation on a few occasions. On each I've politely said no thanks and took my business to someone who was willing to do it for a reasonable fee with full rights assignment to me.