Negotiating Budgets: Pricing, Scope, and Deadlines
If you’re like most freelancers, you probably have a day rate. But what if you want to open a small animation studio? What if you work remote and juggle multiple projects simultaneously? You may need to consider charging a flat rate for projects. If done right, billing a flat rate allows you hire top talent, purchase more gear, and grow your business.
Billing a flat rate is also very difficult. You want to charge enough to make a healthy profit, but not so much that you send the client into sticker shock and lose the bid. During my time in the advertising industry, I spent many hours creating pricing packages for everyone from Intel to Cisco. There’s a lot of nuances to this process. After years of trial and error, here are the best methods I’ve learned for negotiating a flat budget with a client.
THE PSYCHOLOGY OF PRICING
I have one philosophy when it comes to pricing motion design work: offer so much value to the client that they will max out their budget to hire you. 95% of the conversation you have with a client should be about how you can help them. The other 5% is discussing budget. If you approach pricing like this, your client will be ready to sign the check by the time you finish your first phone call. So how the hell do you make this happen? Here are three areas I want to highlight:
Build trust: gather glowing reviews from other clients. Advertise credibility markers from previous projects (maybe a list of other brands you’ve worked with) on your website. Look out for the client’s best interests ahead of your own. If you’re not a good fit, then recommend someone else who is!
Solve your client's problems: when you run into an issue with a project, don’t throw your hands up and quit. Look for ways to work with your client to solve their problems, even if they’re difficult and complex.
Have enthusiasm: you’re not just a hired hand. You’re an artist who cares deeply about making your best work and ensuring that your client has an incredible experience. Don’t be apathetic about what you’re delivering.
Now, let's get into the details.
Before you hop on a call for a new project, take the time to thoroughly research your client. Have they done similar projects in the past? Who is the target audience of your client? What attributes are they looking for in a motion designer? Does your client have plans to grow into a new market?
THE KICK-OFF MEETING
Once you’ve done your research on your client and project, schedule a meeting to discuss logistics. You’re not committing to anything just yet. You’re trying to see if this project could be a good fit. Take some time to talk through the general logistics of the project. Once you’ve hit the high-level stuff, it’s time to dig in deeper and start asking more thoughtful questions.
You only have one goal: find out what matters most to this client. Is it fast delivery? Is it communicating complex ideas? No one hires a motion designer just to make cool shit. They have very specific goals they’re trying to hit, and you should figure out what those goals are. Try to stretch yourself to see things from their perspective. Be open and listen to their needs first.
ASK FOR THE BUDGET
As you reach the end of the initial meeting, it’s time to start discussing budget. Remember: by the time a project gets to you, the client already has a number in mind. Chances are, they have a spreadsheet with cost estimates. Somewhere on that spreadsheet is a line item called "motion graphics". They’re hoping you’ll hit that number or go lower so they can pocket the difference. Even inexperienced clients will have a rough idea of what they want to spend. The best you can hope for is to have an open conversation about what they’re looking to spend, and work together to come to an agreement. Sometimes this works, and sometimes it doesn’t. Here’s what to say:
Client: “So do you have a ballpark estimate on what this animation would cost?”
You: “That depends on a few different factors. Do you have a range in mind you’re looking to spend?”
Client: “We don’t have a number right now, we’re just wondering what you would charge.”
You: “There’s some levers I can pull to make this project fit within certain budgets. If you can give me an idea of what your general budget is, I can work backwards from that and come back to you with some options.”
Don't blurt out a number over the phone. Try to have an honest discussion to see if this is a good fit. Ideally, you can both have a vested interest in working together. Getting your client to tell you their budget won’t work 100% of the time, but you should still give it a shot.
Wrap up the meeting by telling them you’ll look everything over and get back to them with some estimates. You need time to think things through and run some numbers.
TAILOR THE BUDGET TO THEIR NEEDS
After the kick-off call, pull out your notes from earlier: what is most important to your client? Are they looking for a quick turn around? Unique style? Multiple formats? Write down the critical areas your client is looking for. This is the secret ingredient to filling out a project estimate. I break down project estimates into two offerings: standard and premium.
THE STANDARD TIER
The standard tier should cost what the client is looking to spend. If they didn’t disclose their budget, take the time to come up with a price you think is fair. Don’t short-sell yourself, make sure it’s a reasonable price. It’s important that you keep it basic and to the point. The standard tier shows that you have some flexibility and are willing to work with them on this. Here’s an example:
3 style frames (1 round of revisions)
1 storyboard (1 round of revisions)
1 60 second animation (2 rounds of revisions)
Deadline: 6 weeks
THE PREMIUM TIER
The premium tier should be priced 20-30% higher than the standard tier. Remember, we’re including specific items that are personally valuable to that client. It should be tailored to their needs for this project. If it adds immense value to them, they can find a way to pay for it. This case is just an example:
1 60 second animation
2 edits for social media
Project files upon final delivery
Deadline: 5 weeks
*If the project goes past 5 weeks, the budget will need to be readjusted to compensate*
DEADLINES AS LEVERAGE
You may be looking at this and saying, “Unlimited revisions, what the hell?!” This is where deadlines come in. When I bid for a project, I always explain to my clients that there’s a sweet spot for deadlines: enough time to allow myself some breathing room, but not too much time that it takes over my life. If the client wants something super fast, then there’s a 20% rush fee. If they keep making changes and the project goes past the deadline, I revisit the budget and charge more. You want to guide your client to stay within the schedule and agreed upon budget. Because you and the client have a vested interest in meeting the deadline, you can use it as a tool to keep everyone focused and on track.
LET'S SEE THE RECEIPTS!
If you do move ahead with a project, it’s important to set up clear expectations for the client. Here’s an example:
It’s important to keep a record of these exchanges in case you need to refer to them later. Sometimes when you have these conversations, the client may want to discuss it over the phone. You should be aware that some clients will try to change the scope of the project over the phone so that there’s no written agreement of scope change. If there’s no written agreement, you have no leverage. Don’t be paranoid, just be aware. If you have a phone call discussing project logistics, try to follow up with an email to get a written confirmation.
PLAN FOR SCOPE CREEP
You should always be prepared for scope creep. 90% of the time, there's going to be a curveball that gets thrown your way and you have to assess the scope of the project. It's your job hit the deadline, but you need to be realistic and plan for things to expand. If the client comes to you with an insane request, simply tell them you won't be able to make the deadline, and let them know what the extra cost should be. I won't go into detail on this, but you should have a logic to how much extra you charge. You should also schedule in 2-3 extra weeks of buffer room in case a project does go over.
FINDING THE RIGHT FIT
Sometimes, you end up jumping through a number of hoops to try and land a project, and nothing seems to stick. If a potential client isn’t willing to work with you on price, don’t strong-arm them into agreeing. It may be time to move on. There are plenty of quality clients with sizable budgets, and as a small studio owner, you only need three or four of them to stay in business. Focus on quality not quantity with clients, and never be afraid to turn down a project.
Here’s a summary of my approach to pricing:
1. Spend the time to research your client upfront
2. Find out what matters most to your client
3. Try to have an honest conversation about their budget expectations
4. Focus on adding value in unique ways
5. Tailor the budget to the client’s needs
6. Get written confirmations of everything
7. Don’t be afraid to say no to a project