Projects, Rates & Retainers

I’ve been pricing creative work since 1995. It’s a bastard.

Read the story, or skip to the bottom. (All prices are ex-VAT if you’re in the UK).

A bad buddy movie

In the Autumn of 1996, I sat in a basement with a lawyer. We both worked for IBM, but that’s where the similarity ended.

Nick @ IBM (1996)“What do you mean, ‘you don’t know?'”, he said. “How can you not know? Isn’t that your job?”

It was a fair question. IBM was reinventing itself as a services company, which is why they’d let me into their hallowed halls … with my stub, anarchic ideas, and fabulously ripped jeans.

He tried again: “It’s a website. It has a number of pages. How many? And how much does it cost to build each one?”

“It depends?”

“On what?”

“Loads of things.”

I walked over to a whiteboard and started scribbling. It wasn’t his fault. He was used to selling silicon. Ah, you’d like a mainframe. Excellent. That will be a million billion pounds.

But there was nothing old school about the project we were pitching for. It wasn’t just a website, it was the first website for Persil … the UK’s leading washing powder brand. And it wasn’t just the UK … it was Europe. 11 countries, 13 languages. Different brand names, positioning, personality and demographics.

I was in charge of the pitch, my colleague was in charge of the contract. It was like the setup for a bad buddy movie … where no one changed or grew in any way.

“This is the problem,” I said and stepped back from the board. I’d scrawled a load of stuff, but circled one word. Bandeau.

“What’s that?”, he said, smoothing his already-smooth suit.

“I think it’s something the Spice Girls wear, but honestly I have no idea. It came through in the copy from the fashion consultant that Persil wants to use. It’s in the draft content.”

“So?”

I smiled. “I spoke to our translation agency. They have no idea what it means either, or the rest of the fashion content … which means they can’t brief their team. They’re saying they might need to hire specialist translators with a background in fashion – which will be expensive – but that’s assuming that UK trends resonate with an audience in Norway, or Greece, or Italy. Not to mention the fact that the content will be changing every four mo–”

He raised his hands to stop me. “What are you saying? That IBM can’t handle this huge, prestigious project?”

I shook my head. “No, we can definitely do it, but we need to talk about risk.”

Cost, risk and pieces of string

There’s a simple, fundamental tension at the heart of creative work. We can never be sure how long it will take.

Case in point. I have almost 30 years experience, but my time estimates are often wrong. Sometimes it’s my error, sometimes it’s a matter of the client needing to go on a journey. But wrong is wrong.

How then, should we price creative work?

Every project is different. Every client is different.

The answer is an honest conversation about risk, and who bears it if the project grows. My solution is to offer three options:

1. Fixed Priced Projects

Many clients prefer to know the cost up front. That’s why I typically offer fixed-price projects. The quoted price will be higher than my internal estimate, but it won’t change whatever happens. If we need six drafts to get it right, I’ll do six drafts.

If the project overruns, I bear that risk and take that hit.

2. Daily Rates and Discounts

Some clients prefer a simple daily rate. In this case, I will give my best time estimate for the project, but be open about the unknowns. My initial rates are £1,000/day, but the fees fall by 20% at 3 days and 6 days. In other words:

  • Days 1-2 are £1,000 each.
  • Days 3-5 are £800 each.
  • Days 6-10 are £700 each.

To put that in perspective, a 10-day project will cost £7,500 (saving 25%). This is a significant saving because the client bears the burden if the project overruns.

3. Retainers (12 months+)

Sine 1997, my work has been based on building long-term relationships. For those who appreciate the value of that, I offer a retainer rate of £600/day (40% saving). This is for a minimum of 3 days per month for 12 months.

This is by far the most cost-effective option for bringing me into your team. Very often, the hours are spread throughout the month. The pricing is low because long-term work is more rewarding, more fun and more effective. It also smooths the feasts and famines of my business … which is worth a great deal to me.

Retainer clients are special clients.

For this reason, retainers are only available to people I’ve worked with before. Sorry, if that’s not you … let’s find a small project to ace together first.


 

Where next?

If you have a specific project to discuss, drop me an email.