A 1% improvement in pricing results in an average increase in profits of 11.1%, thus pricing intelligently is essential.
As a young designer, it is easy to forget about money however I must remember that I deserve to be paid more than minimum wage if I am not to get stuck on a tiny wage that wont let me develop freely. Because I have almost 2 years of experience, I should be asking for £100 a day minimum.
fine for commodities (sold in volume, on price)
not so ideal for branded products (where emotion rules)
Cost plus pricing is the simplest way of determining price, because it shows how much the project is actually worth. This is the best way to make something and sell it for more than you spent making it.
The benefits of using this method is:
few resources are necessary, for example no market research is necessary
covers all costs at a consistent rate of return
hedges against incomplete knowledge, for example no competitors
However the drawbacks of this method are:
doesn't take into account market research
creates a culture of profit losing isolationism- not looking at competitors and target market
it fails to take into account customers
Designers and creators in general are likely to underestimate their time because they enjoy creating the things that they make. This however can effect people from such industries because time is money.
Per hour vs per project pricing
If the designer is working fast then they will get paid less, even though they are doing the same amount of work as they would if they were working slower. For this reason, when looking at pricing it is important to see that Knowledge and skill equals value.
Paula scher pentagram once said that "it took me 34 years to learn how to draw it in a few seconds."
The best way to measure project pricing is by looking at the time, scope and value of a project. When negotiating and the client says they have a limited budget then I should tighten the scope and if the client has a huge scope then I must look at raising the budget of the project. before starting a project, it is important to get budget up front so that no fall outs occur due to inconsistencies and a lack of knowledge on the scope and price of the project.
Building pricing pipeline are important, because if one product is available then 50% of the people will buy it while 50% will not, whereas if tehre are three products then 75% of the people will buy it and only around 25% will not thus increasing profits and clients. Another good strategy is implementing tier names for tiered payments, for example the lowest-end buyers could be called "navigators", the medium-tier people will be called "pilots" and high-end users will be called "commanders" so that people feel a sense of importance by purchasing the more expensive tiers. Because most people buy the middle-priced tier, it is important to decreases the cost of the lower-tier payment and instead increasing the price of the middle-end tie for more profit.
If I consider adding more products for example, I would consider a bundle where the more expensive one has a larger button, a colour that stands out from the background and a more fancy name.
