The nuSchool - Hacking Design Pricing
"It didn't feel right to take money for something that I enjoy doing" that's what Ran Segall thought at the beginning of his design adventure. Now, together with Lior Frenkel as NuSchool they teach others how to make money in design industry. During NuSchool’s lecture you can learn how to diversify the way you charge your clients in order to maximize the profit. Ran and Lior will introduce 3 diverse pricing strategies: value pricing, retainers and stock options based on the risk and reward its include.
I strategy: Value pricing, Medium Risk and Medium Reward
It’s simply about paying for the value not for the time you spend on the project. The NuSchool recommends making 3 tiers in pricing. They say: “the more you know and understand about the client the more you can offer”. The tiers:
1. What client exactly asks us to do.
2. What will make the project better.
3. The things that client didn't even imagine that he might want.
The prices for the tiers should be done according to the value they have for the client, not based on the time you spend on the project.
II strategy: Retainers, Low Risk and Lower Reward
Retainer client is the relation with your client where you help him regularly - you dedicate certain amount of time for your client and you know exactly how much money you will earn. It is really good for clients because "you keep providing them the value - hey work with somebody they can trust"- said Ran.
III strategy: Stock options, High risk and High Reward
Stock option is when instead of getting cash, you get shares from the company that you work with. Ran suggests not to make the whole pricing of the project as stock option For example you can divide it: 75% cash and 25% stock as reward. The reason company usually offers stock option is because they want have you motivated to work with them in the long term perspective. They know that "if you succeed the company succeeds".
NuSchool recommends to think in long term perspective and to mix all of the options but depending on who you are and how much risk and reward you want to take.
Ran Segall and Lior Frenkel are self-learning geeks. They are both co-founders at The nuSchool - trying to make the world an easier place for creative freelancers, especially designers. Ran is responsible for creative and product, and Lior is the CEO which means he makes coffee. They have taught thousands of designers around the world to run their freelance business better.
Outside The nuSchool, Ran is a full stack designer working with Startups, and Lior is a digital-everything freelancer, author and speaker.
Lecture from Element Talks 2017.