How Snask uses pricing psychology on its clients

Studio founder Fredrik Öst talks hourly rates and managing client expectations

Illustration by Snask for Computer Arts issue 244

Snaskified is a recurring column in Computer Arts magazine by internationally renowned creative agency, Snask. Here, founder Fredrik Öst talks pricing psychology…

When Magnus [Berg] and I got our first paid jobs in design, we had no experience to fall back on that could help us figure out how to set our value and price for our services.

We were students with plans of chilling over the summer, so when we got our first job request we only wanted pocket money. It was an employment company who wanted a new identity, stationery and website.

We decided to set the value of the job to what we needed to drink beer and have fun over the summer: £750 each. But after a bit of a re-think we came to the conclusion that we had no clue about our own value. Was £1,500 too much? We decided to take a chance and double it.

The next day we got the reply: "Three thousand pounds – are you out of your mind? Just kidding, the money will be transferred today." We got super happy since we had just doubled our budgets for fun over the holidays.

Increasing your fee

Today, we realise how little it was. During our years we have kept growing our fee. It's legit! We get more and more experience the more we work. But also you realise that you need to pay all the bills as well as everyone's pay cheque.

A tip is to set your hourly rate very high and then go down in amount of hours. Why? Simple: because no one wants to pay 'more' per hour all of a sudden, and yet most will be prepared to pay more for a project that takes more hours to complete.

Let's say you start with a rate of £75 per hour. The client might say that it's very high, but then you fib and lie, and say that it will only take you about four hours to complete the work. The next time they want work done, you simply say it will take more time and there you have it.

Pricing psychology

There's something called pricing psychology. The shortened version of this is that clients regard price after quality and relationship.

So if someone says they got a cheaper price from someone else, just reply: "Okay! Then I recommend you go with them. I don't know how they manage this, because we can't possibly offer you that level of quality for that price, and keep our promise and deliver satisfaction."

Almost every time the client will end up choosing you over the cheaper competitor.

Life is not about money, and don't forget it

Life is not about money, and don't forget it. To go to a hobby, or jobby (new cool slang for having a job that's super fun) everyday is worth more than any money can buy. Unless you are so rich that you can do your hobby every day, that is.

Enemy of the month: Anti-design without a cause
Anti-design can be great, but when it's made without a cause it only smells of laziness or a lack of skills. "My design is supposed to look like I made it in one minute." But apparently you did, and for what cause? At least have a manifesto behind it!

Thumbs up: Swedish festivals
Swedish festivals are starting to become epic. This year, two forest festivals have been great. One is Skankaloss and the other one is Into The Valley. See you there next year!

Thumbs down: holidays
Don't live your everyday life just to have vacation a few weeks per year. Make sure you lead a life where your weekdays are also something to look forward to.

Words: Fredrik Öst

The full version of this article first appeared inside Computer Arts issue 244: Earn More as a Designer – packed full of financial tips for creatives – on sale now.

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