How’s Your Charging Strategy Holding Up?

How’s Your Charging Strategy Holding Up?

If you’re a designer, you may be rethinking your charging strategy, with the U.S. economy down 11.5 million jobs since the beginning of the pandemic. But is this a wise business strategy? AD PRO polled experts on whether negotiating on rates now will compromise a firm’s brand messaging in the future—and what tactics designers should instead consider implementing to weather this difficult financial climate.

Posits Katie Saunders, founder and creative director of strategy firm Pop & Grey, “Pandemic or not, designers should think long and hard before changing their pricing strategy. How you package and price your services is all part of your brand as a whole and affects your overall perception.”

If you’ve already carefully considered your method of setting your rates, she recommends that you stick to their charging structures regardless of external financial factors, like a fledgling economy. “Offering discounts may get you some short-term jobs, but the long-term effects could be devastating. Designers rely on word-of-mouth referrals, and once you lower your prices or offer services you don’t really want to, you will continue to attract more of the same,” explains Saunders. “The process of creating your packages and prices should take into account what you’re best at and what you truly love to do. Not to mention, when you decide these important aspects of your business, you are targeting a very specific client who values exactly what is in those packages.”

She discourages changing up your design offerings to appeal to a clientele at a lower price point unless it is done very intentionally and carefully. “Rather than marketing these services to an audience that they are ill fit for, do the research on what kind of people are desperate for this kind of service and how they’re different from your current audience,” she says. “You may need to market in different places to attract this new audience. This keeps you from having to discuss price and structure changes with your current clients because it’s opening your services up to a whole new audience.” However, she cautions: “You’ll need to think about how having two distinct sets of clients affects your messaging and positioning in your market. Your higher-end service may scare off your e-design market, but your e-design service may lower your status in the eyes of your full-service clients. It’s a delicate balance and takes careful work in your brand to pull off both.”

Linda Sullivan, of Sullivan Design Studio in Menlo Park, California, concurs. “In our experience, clients looking for design services value good design and understand it is an investment, even during COVID-19. We are finding that our clients value a functional and comfortable home that meets all their needs, and some are even swapping out their vacation budget for an interior design budget.” 

An important question for designers to address is: Why would I consider lowering my rates? Is it to accommodate the new realities of remote working and offering virtual services? “If you’re incorporating virtual aspects into your more classic design package, there is no reason to lower your prices,” Saunders suggests. “All that you’re really cutting out time-wise for you is travel to the client’s home. Lowering your prices for this service that is just as much work as what you’ve always done doesn’t make sense and sends a message to clients that you aren’t providing the same level that you have in the past—which absolutely isn’t true.”

And while e-design lets the client handle procurement of retail products rather than the designer getting it from the trades, which is a huge change in the deliverable, Saunders advises, “Be sure to take into account all of the extra time spent navigating technology hurdles and working in a way that you aren’t used to.”

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