I’m sure you know the marketing gimmick by now: the reason most retail stores price items at $99.99 instead of $100 is that it tricks the average consumer’s mind into believing an item is cheaper than it is.
But does this pricing method work for freelancing as well?
Does charging $249 – or $249.99 – instead of $250 bring in more clients?
I contacted three highly-respected, veteran designers to get their input.
Here’s what each one has to say (PS, I’d also love to hear if you go with whole numbers or a .99 approach. Leave a comment on this post!):
Becky Livingston, Royal Apple’s Marketing’s founder and CEO, has more than twenty years of experience in marketing and communications as well as a strong background in technology. She can also be found doing public speaking gigs across the country.
Here’s what Becky says:
“When I price projects, I try to use a #+5 or a whole number, meaning I may have an item that could be $150, but I price it at $155 or $145. If it’s a big ticket item I use $1,500 versus $1,499. Why?…in some instances clients want to pay for services over a period of time. By rounding the numbers to more “whole” numbers, there is a better chance to split payments in to thirds or even fifths if needed.
I have read a lot about the marketing pricing strategy to keep numbers from being “whole” numbers, but find it’s very tedious for my clients. Thus, rounded numbers that allow for easier splits works best for me.”
Preston D Lee
Besides founding this blog and posting non-stop awesome advice (my words – and I think you’ll agree), Preston works as a full-time marketer/designer at a record label and film distribution company. He also runs a number of part-time internet businesses and does freelance web and graphic design.
Here’s what Preston has to say:
“I actually try to be as accurate as I can. I’ve found if a client sees a number like $999, they assume I just guessed. But if they see a number like $842, they figure I took time to calculate how many hours it would take and they’re more likely to trust my quote and less likely to talk me down. Of course, that requires honesty and extra effort in actually determining that number.”
Michael Pingree has over fifteen years of small business experience. His business, Pinson Digital, is a one-stop shop for inbound marketing solutions as well as web design and print procurement.
Here’s Michael’s take on it:
“I recently read a very interesting article about pricing strategy that advised against using round numbers like $1,000 as potential clients tended to view it as nothing more than a made-up number. However, if you quoted $987.24 for example, they believed that you had priced out each and every component of the job and that they were getting a “real” price.
I have used this strategy for my quotes in recent months and have found that the client has been much less likely to question the quoted price. In the past, clients would want to see a breakdown of the prices, but with the new system, no one has requested that.
My quote-to-job ratio has stayed about the same, so I can’t say it has helped get any jobs, but it seems to have eliminated price as a friction point.”
What this means for you and me
After talking with these veterans, the most important takeaway (for me) is to put time and effort into your quotes. Don’t be so hasty to get the email off that you rush through the quote and provide information that might be construed as flimsy or fabricated.
Secondly, testing different strategies is a great idea.* See which pricing method produces the best results or simply creates less headache and haggling. Stick with the strategy that works best for you and your clients.
*Note: I find it best to test on potential or troublesome clients. This way you don’t risk upsetting the clients you’ve already got a great relationship with.
PS – If you’re looking for more great advice on pricing, check out these GDB posts:
- What your pricing strategy says about you as a freelance designer
- What should you get paid on your first freelance project?
- How to bring in more design clients without dropping your prices
- Putting a price tag on design
- An $11,000+ boost with small “tweaks” to your design business
What Works Best for You?
How do you price your projects? Was I right in my assessment?
Have you tested pricing methods and found the best solution for you?
Leave a comment on this post and let’s talk about it.