Should you cut your fee in half?

Last week, on the Pricing Game DesignCast, Jonathan Cleveland of Cleveland Design presented this sticky situation:

He was asked by a long-time client to design a piece that would be presented at a fancy reception at the White House. He gave his price, but the client asked him to cut the fee in half. Here’s how it went down:

The Assignment:
Create a memorable card with a “wow” factor for a highly visible corporate sponsorship for 25 of the most powerful women. These women will receive a gift bag filled with all the other sponsors’ gifts as well, and will be given out during a reception with the President.

The Twist:
You present your estimate based on the time and value of this project. The client calls and says you need to reduce this estimate by almost half — yet is willing to spend top dollar for printing.

The Decision

  • Do you plead your case and hold your ground on the value of your work?
  • Do you consider the long-term value of your relationship with this client and agree to drastically reduce your estimate?
  • Do you consider the high-profile of this event and that your work will be seen by the President so you are willing to take a hit for the value of your work?

What would you do?

Click here to see the piece that was finally created. To hear what Jonathan did, get the Pricing Game DesignCast.

17 thoughts on “Should you cut your fee in half?

  1. Brian Rich

    My suggestion would be to try and come up with something simple..something that won’t take a ton of your time but still come out visually appealing. Throw all the bells and whistles (that fit the design of course) into the printing..coatings, foil stamp, embossing, die cut…..etc.. It could still be a simple and elegant design enhanced by the printing. Just another notch in your portfolio.

    Brian

  2. Jennifer

    Hmm… that’s a tough one. There really is no right answer here, but if it were me I would try to negotiate in a way to advertise my services further. Maybe he could mention my name and display my business cards during/after his presentation. Then plead my case on how that would make up for the cut in profits. Being a long-term client I would hope he would understand. But since I love making cards, I would do it anyways regardless of his answer. It never hurts to ask, though!

  3. Will Kesling

    In this particular case there are some interesting factors. One factor is that this is a long time client. I am assuming that this long time client has normally paid Jonathan’s standard rate. The second factor is the high level of exposure and who these cards are going to.

    I would say given the circumstances, the potential benefit of getting your work in front of this group out weighs the initial monetary loss. Not all value is measured in money.

    It is a long time client who is essentially asking for a favor. I would make it clear that this is indeed a special circumstance and this would not mean that all of your future projects will also be done at half price. *consider the opportunity cost

    I am willing to bet that this is what Jonathan did and as a result of it he was able to get more work from it that more than made up for the difference.

  4. Joe Morris

    Nope. Quote to make money AND to perpetuate your lifestyle as a designer—that’s my motto.

    If your lifestyle is balanced on a healthy bank roll and your current schedule permits a “freebie,” then sure consider it. Just know you’d be doing yourself and your peers a huge disservice if you don’t tell the “client” this is not how it usually works. Then use your bargaining position to barter for something else, like a chance to see the President receive of your cards.

    Just don’t give it away or you will live broke and break the system.

  5. Deb Budd

    I agree with Mr. Morris — if the designer does not receive some additional value in exchange for cutting the fee, pass on the project. I.e., an invite to the event and the opportunity to self-promote/network as the “designer of our classy invitation.” Smart negotiation is key.

  6. Selma Manizade

    I agree with defending the value of our time as designers and most anything I have done as a freebie really did not lead to any greater opportunities. But I think it is shameful that an institution like that be so bold as to bargain professional services. Charity is one thing but a situation such as this is just opportunistic. Would they ask their dentist to work for half their normal fee schedule? Probably not.

  7. Hilary Baumann

    My gut reaction is this falls in line with the reasons that spec work is wrong. Without knowing the specific client though I couldn’t be sure what I would do (there are some that are wonderful to work with and have been with me for ages and I know I’m more likely to break my own rules with them because I know that they value my work no matter what.)

    If I thought that they had asked me for the reduced price because they just didn’t have the cash in the bank, I might offer them a payment schedule if they have a good payment history.

    As for a chance to be seen by prominent people, that’s devalued by the fact that it’s going to accompany a gift bag with many other items. Plus how would they know who designed the card? If I were considering this option I would pitch back that I would want my company logo and website address on the back of the card.

    You could argue that it would be a good portfolio piece and that’s an option, but does it appeal to your target market? Do I want to seo a website page for “white house” and maybe the guest list? Do I get a copy of the guest list names? Does the event have a name?

    As for the long term value of the client, I would be concerned that if they have started asking for my services at half price that there’s a chance they won’t be a long term client much longer.

    Now I’m going to listen to the podcast and see what Johnathan actually did. 🙂

  8. Edwina@FASHION + ART

    Amen Deb. Let the negotiations begin! I would hate to pass on such a choice project but would have to receive an invite to the event or some sort of compensation to make up for it. Not just for the loss of revenue but in anticipation of the potential results. It would be a big mistake to just go along with this clients’ request. You can bet that they will ask you, from this day forth, to reduce your fee on every project. Simply because you did it once. Give ’em an inch…

  9. Amy Bonney | B&Company

    I agree with Edwina… My experience is that once you reduce your cost for a client they will ask from then on. It could irreparably damage your relationship with your client. It’s not worth the headache, even for a high profile project. If you can negotiate something beneficial from it, that’s great, but be prepared to have to negotiate with your client for every project from then on.

    I’d also ask the client directly why they are willing to chop design costs without cutting printing costs. My guess is it’s just because the design work isn’t as tangible as the printing. Let them know that the design is just as valuable to the over-all impression the finished project has as the quality of the paper. Put them on the spot the same way they did you….

  10. Amy Bonney, B&Company

    I agree with Edwina. Once you reduce your price, they’ll ask you to do the same with every project going forward.

    I’d ask them directly why they are willing to skimp on design but not printing. Put the client on the spot the same way they’ve put you on the spot….

  11. Don Hammond

    Let’s consider the target audience for this piece. Is it a non-profit scrambling for grants and contributions in order to help those without political or financial influence?

    No, it’s 25 very “powerful women” at a lavish private reception—sponsored by a highly visible corporation, no less—at the White House, with the President in attendance.

    It’s a virtual certainty that every one of the people in attendance is extremely well-paid, and the event is in a city that is filled to bursting with wealthy and influential lobbyists who think nothing of spending five and six figures on events to woo politicians and policymakers on behalf of their corporate and political clients. But the person who is directly responsible for creating and producing the tangible product that will get into the hands of each one of these cosseted, well-connected players is supposed to cut his/her fee in half?

    We already know the printers are not being asked to cut their fees. Are the caterers cutting their fees in half? The event planners? Florists? Limousine companies?

    I would ask why I was being asked to do so before making a final decision, but unless there are unusual extenuating circumstances I wouldn’t consider the request for one second. I would also reevaluate the true nature of my “relationship” with the client.

  12. krysten

    Definitely not! If you give a mouse a cookie, he’s going to want a glass of milk. From here on out, that client and any other clients he may refer will ask for a 50% discount – and when you don’t agree, he’ll start shopping around. I’m always willing to negotiate, but that is a huge discount. Do you walk into a car dealership and demand a brand new car for half off? No way! And if you did, you’d be laughed at. Same is true for pretty much any retailer… Why should it be different for designers? If the opportunity is great enough or your financial situation is comfortable, then it’s up to you, but otherwise I’d say forget it!

  13. Erica

    I would like to tell them that paying more for the printing isn’t going to make it better. The design skills are more valuable than taking the time to work out an elaborate printing job. Yes, I would work out a compensation with the client that would be an investment for future work.

  14. Howard Stein

    I have done this. More than once. Because at the time, I needed the work. And it is terribly difficult, if not impossible to raise the price back to previous levels. I agree with Joe, Deb, and Edwin, you need to negotiate on something that delivers more than the loss of revenue.

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