A few years ago, a retail brand asked me to pitch an idea for an interactive installation in their flagship store. It was an exciting project, a chance to create something beautiful that would be seen by thousands of people. I spent a week designing a concept, then sat down to figure out the price.
I calculated my hours—maybe 40 hours of focused work. I multiplied by my hourly rate at the time. The number that came out was $5,000. And my stomach immediately sank. It felt simultaneously too high ("Will they laugh me out of the room?") and far too low ("This feels like a huge project for just $5,000.").
Before I sent the proposal, I called a mentor. I explained the project and my pathetic, anxiety-ridden price. He was silent for a moment, and then he asked a question that changed my career:
"What is it worth to them?"
We spent the next hour dissecting the client's perspective. The installation would drive foot traffic, generate a mountain of social media content, and position their brand as innovative and forward-thinking. In terms of pure advertising value, it was worth hundreds of thousands of dollars to them.
I ripped up my original quote. I sent a new one for $35,000.
The client's response? They accepted it without a single negotiation.
That's when I realized the most fundamental mistake creatives make when pricing their work: we price from our own perspective, not the client's. We calculate our costs, our time, our effort. The client doesn't care about any of that. They care about one thing: the value they receive.
You're Not Selling Your Time, You're Selling an Outcome
Let's strip this down to its essence. There are three ways to price creative work, and most of us are stuck on the worst one.
- Cost-Plus Pricing (The "Hourly Rate" Trap): This is where most of us start. You calculate your costs (including your time), add a small profit margin, and that's your price. This is the worst model because it punishes you for being efficient. The faster and better you get, the less you earn. It also completely ignores the value of the outcome.
- Market-Based Pricing (The "Going Rate" Guess): This is a slight improvement. You look at what other people are charging for similar work and price yourself somewhere in the middle. It's better than cost-plus, but it's still a race to the middle, and it assumes that your work is a commodity identical to everyone else's.
- Value-Based Pricing (The "Strategic Partner" Model): This is the game-changer. You stop asking, "How long will this take me?" and start asking, "How much value will this create for my client?" Your price is then a small fraction of that value.
The 10% Rule: A Simple Anchor for Value-Based Pricing
Here's a beautifully simple rule of thumb: aim to charge 10% of the value you create for the client in the first year.
- If the website you build is projected to increase their online sales by $200,000, your project is worth at least $20,000.
- If the internal tool you develop will save them $50,000 a year in labor costs, your project is worth $5,000.
- If the brand film you create has the equivalent PR value of a $500,000 ad campaign, your project is worth $50,000.
This isn't a perfect science, but it's a powerful anchor. It shifts the conversation from "Why does it cost so much?" to "Look at this incredible return on investment."
How to Talk About Value (Without Sounding Like a Jerk)
You can't just invent a number. You have to discover the value in conversation with the client. In your initial discovery calls, you need to stop talking about deliverables and start asking better questions.
- Stop asking: "What do you want me to make?"
- Start asking: "What problem are you trying to solve?" or "What does success look like for you, six months after this project is launched?"
Listen for the numbers. "We're hoping this will increase our conversion rate by 2%." "We're losing about 10 hours a week to this manual process." "A successful launch for us would mean getting featured in TechCrunch."
That's your value. Now, you can build your proposal around it.
Instead of saying:
"The price for the website is $10,000."
You say:
"You mentioned that increasing your conversion rate by 2% would mean an extra $100,000 in revenue this year. The investment for the new site, designed to achieve exactly that goal, is $10,000—a 10x return in the first year."
Same price. Completely different conversation.
The Three-Tier Proposal: Let the Client Choose Their Price
One of the most powerful tools I've adopted is the three-tier proposal. Never give a client a single number. Give them three.
- Option 1: The "Basic" Tier. This is the essential solution that solves their core problem. This is your baseline price.
- Option 2: The "Professional" Tier. This is the Basic tier, plus a few high-value additions—things like extra revisions, a faster timeline, or an additional feature. Price this at about 1.5x the Basic tier. This is the option you want them to choose.
- Option 3: The "Premium" Tier. This is the "everything but the kitchen sink" option. It's the full, white-glove service with all the bells and whistles. Price it at 2.5x or 3x the Basic tier.
The psychology here is brilliant. Most clients will choose the middle option—it feels like the "best value." But you've also anchored your price, making the middle option seem reasonable in comparison to the premium one. And you've given the client a sense of control; they are choosing their investment level.
Your Price is a Signal
Here's the final, uncomfortable truth: your price signals your confidence and your expertise. When I was quoting $5,000 for a $35,000 project, I wasn't just undercharging; I was signaling that I didn't understand the value of my own work. A low price can actually make a client less likely to hire you, because it suggests you're an amateur.
Pricing your work based on value is terrifying at first. It requires you to step out of your comfort zone as a "maker" and into the role of a "strategic partner." It requires confidence. But it is the single most important shift you can make to build a sustainable, profitable, and fulfilling creative career.
Stop charging for your time. Start charging for your impact.