Anytime you work in creative professional services it’s hard to put a value to it, especially when talking about your own work. It’s even harder to judge what someone else will value your work and services at.
To further complicate things, two people may value your services completely different; read: yourself and a prospective client.
When you’re a freelancer, business owner or employee it can be pretty hard to receive feedback that your services are deemed less valuable- or not valuable enough to justify hiring you for a job.
When you’re just starting out you’re more likely to take on jobs to build up a portfolio or network with others. I’m not against this at all, but I see it happen far too often and for far too long into someone’s career. It seems there’s always another job that you want so bad you’re willing to discount your rate, justified by the fact that the marketing power from this project will pay a positive ROI.
This is something we deal with on a regular basis at TAR Productions. We constantly get asked for a quote on jobs where people assume it’s as simple as looking up a rate sheet.
As creatives, we need to remember that we’re also a business. I’ve been able to build up a company built around value, and our services to customers are of great value. And we need to charge a premium for this.
We don’t work off a rate sheet, and by now you know that we’re big fans of value pricing projects. Value pricing in professional creative services makes sense for all parties involved. Production value isn’t something found in a rate sheet.
We have a rate sheet for reference, but this is to reference what we pay freelancers. We reference this to make sure we’re turning a profit on each job.
In early meetings with prospective clients we’re asking them what their end goals are and what a successful project/campaign will look like. These answers give us so much info into what needs to go into a project and how to translate that into production value.
Think about it: your client is thinking about selling more T-shirts and pants. They might say they’re currently selling 10,000 pants per season, but this upcoming season they want to sell 25,000 pants. 2.5x increase and that goal is incredibly valuable to them. Besides selling more pants, they’re gaining new customers and fans, increasing their reach, creating residual value in their brand that will pay dividends for seasons to come. How valuable is this?
Production value isn’t something found in a rate sheet.
Your client not thinking this project needs to be shot in slow motion with a gyrostabilizer. They’re not thinking that a custom score and sound design is going to take this project to the next level. They’re not thinking that the voice over should be ominous and powerful (all things to consider when creating a budget). They’re thinking about selling more pants, the end goal, and looking to you, the expert, to help them with that.
Taking what you learn from your early meeting with your prospective client you can gauge what it’s going to take to deliver a successful project. Clients will ask how much this is going to cost. They always do. When this happens you need to be prepared to give a range, ballpark or number. There are a few ways we go about figuring this out.
When budget comes up in your meeting (this is usually towards the end of it) you need to be confident in your delivery. Make eye contact and be upfront on what it’s going to cost. Take risks on pricing if you’re looking to grow your business.
Whatever you do, when asked how much this is going to cost, do not say “ummmm…” with a blank stare on your face. If you say this you just lost at least 10% of your budget immediately.
If you don’t know how much it’s going to cost let them know that you’ll figure it out and get back to them. Explain it’s complicated and there are a lot of variables that go into a project. But confidence is key here.
Want to know how we narrow down budgets? It’s easy, we ask. This can be hit or miss. Sometimes we’ll get a very straight forward answer, something along the lines of “Our budget is $X.”
Other times we’ll get wide eyes and a shoulder shrug. When this happens I can’t help but think that the project isn’t all that important to them.
Sometimes we’ll get a response such as “We’re not sharing our budget and looking at who is going to be most competitive.”
This is when we kindly inform our clients that we don’t compete on price and tell them why.
However, we always have to give our prospective clients the benefit of the doubt. Sometimes they have no idea. There is always a chance that they have never done a video before and don’t know what’s involved.
This is always a pivotal part of the conversation. This is where you can differentiate yourself from your competition and really earn your client’s trust.
Your client might think you’re two guys with a decent video camera when you’re really bringing out an entire crew, with big lights, lenses and a strategy to ensure success.
Narrowing Down a Range
One thing that we’ve found pretty helpful is asking what their range is. We’ll ask if it’s closer to $5,000, $50,000 or $250,000. We’ll usually get a pretty good idea of what we’re talking about here.
We always follow our process for all projects, but if we spark some initial ideas during one of these conversations we’re not afraid to ballpark a budget required for that project. This could always be our blue sky idea that is totally awesome (and might cost a lot to do). The worse that can happen is you’re shot down and move on to option B.
In other words, don’t waste each other’s time talking about amazing, incredible projects that are out of budget. No matter how cool the idea is, if the budget doesn’t support it and it’s not an option, why are you talking about it to begin with?
So you’re hooked on value pricing, great! But you still want to make sure you’re running a profitable business. I’ve included two budget templates below for you to use and make sure everything is making square business sense.
We work with several freelancers with various backgrounds and they’re all worth their salt. We have set rates with all of them and when I’m building a project budget I usually include their rate, number of days and who will be working a specific role.
Another great thing about a budget template is that you have a list of all the roles you might need for a project. Forgot to include a boom operator in the original ballpark? A template with all the roles you could ever need is really useful.
Not every time will you need a 25+ person crew, sometimes just a few people will do. And for that we’ve created a simpler budgeting template.
There are lines for contingencies and commissions if needed. Remember, these templates are so you can measure if you’re running a profit.
Another great feature of using budget templates is that you can quickly see what the bottom lines comes to. If you need to increase or decrease certain fields based on your client’s budget you can do so.
For example, if your budget comes in under your client’s budget and you think you can use a field producer for a few extra days during pre-production bring her on board early (pro tip: you’ll always end up with a better product when you’re more prepared).
We’ve included two budget templates: simple and detailed. The simple budget is great for a majority of the shoots you’re probably going on. You can add or hide rows as needed and change the commission or contingency structures.
The detailed budget is pretty complex and makes more sense when you’re working with large crews and several shoot days. If you are working on a large production your Line Producer will love you for being so organized.