Establishing a creative or technical services budget can be challenging, especially when you’re selling a service like logo design, branding, websites and apps as an advertising agency, web design studio or app developer. The thing is, it’s an essential step towards building a successful and sustainable business. You want to thrive and grow, right?
Let’s explore five tips for establishing a professional services budget and overcoming price objections with a prospect using examples from an advertising agency selling a logo design campaign.
1. Research Your Market and Competition
The first step in establishing a professional services budget is to research your market and competition. Like duh!!! You have to compete, right?Anyhow, this research will help you understand the current market trends and the pricing strategy of your competitors. Since texting pricing questions to hundreds of competitors out there might be a bit unrealistic, you can always Google what your market is charging. There are plenty of publications, associations and even other agencies publishing data. Oh yeah… and don’t forget that to research the target audience’s perception of a service like logo design and how much they are willing to pay for them. This information can help your agency establish a budget that is competitive and realistic.
2. Determine Your LOE Costs
This is “huuuuuuuuge!” Your Level of Effort (LOE) is super important to know cold. Determining your LOE involves calculating the time and resources required to complete the logo design campaign. The costs may include the time spent on research, brainstorming, designing, and revisions, as well as any additional expenses like software or licensing fees. For example, your agency may estimate that it will take 20 hours to complete a logo design campaign and factor in the costs of their design software and any other expenses. Remember, regardless of what you ultimately charge the client, you still will need to know the LOE to assign to your team when the project commences.
3. Establish Your Pricing Strategy
Okay, this feels a bit like “Thanks captain obvious,” but hear me out. After researching your market and determining your costs, the next step is to establish your pricing strategy. This involves setting a price that is competitive and reflects the value of your services. Repeat… “value” of your services. Not time necessarily, but the actual value to the client. The value a logo can bring vary vary greatly between different types of clients. We get more in-depth about “value pricing” in other articles. Ultimately, your agency needs to decide to charge a flat fee for your logo design services or charge an hourly rate. Perhaps you offer packages? Perhaps you are offering multiple creative options from different team members. Heck maybe you’re just great at hitting current design trends and can refresh an older logo into something more contemporary. Whatever your value proposition is, compared to the market, set a pricing strategy that you want to hit. Then, hit it. Geesh… so easy, right?
4. Communicate the Value of Your Services
There’s that word “value” again. A little overused? Not ever. It’s a fundamental concept when it comes to establishing pricing and budgets, but I digress. When you’re pitching that logo design project, it’s essential to communicate the value of your services to the prospect. You know, the ones you just set in your strategy. If you have the best talent, or the best process, or even slick packages for logo design, you should be able to express it in terms your prospect will get. Once you communicate your value effectively, it can help overcome any price objections they may have. Maybe you’re trying to highlight the benefits of a well-designed logo, such as increased brand recognition, improved customer loyalty, and a competitive edge in the market. If you have one, showcase your portfolio of successful logo designs and provide testimonials from other clients. You’ll need to walk that fine line between prideful showcasing of your work and coming off like an egomaniac. In the immortal words of Han Solo… “don’t get cocky kid!”
5. Be Open to Negotiation
We all kind of hate this because we do know the value we are bring to the table, but truthfully, it’s important to be open to negotiation when establishing that budget with the prospect. Look for the long haul. Like maybe this job can help build a long-term relationship with the prospect and increase the chances of securing many other business. You get it… a foot in the door. You may need to offer a discount or adjust your pricing strategy to meet your prospect’s budget. If you can swing it, consider offering a payment plan or creative payment terms to help the prospect manage their own cash flow.
The Bottom Line – Your Net Net on Pricing and Budgets
Establishing your pro services budgets and overcoming price objections with a prospect is a crucial step towards building a successful and sustainable business. By researching your market and competition, determining your costs, establishing a pricing strategy, communicating the value of your services, and being open to negotiation, you can increase the chances of securing new and building long-term relationships with your clients. Put in the work and see your agency grow! Good luck!
