Why Design Can’t be Billed by the Hour
Saturday, January 16th, 2010
“But it will only take you an hour or so . . .”
I hear this comment a few times a year — a client is unclear as to why I won’t simply charge them by the hour, sometimes by fifteen-minute increments. I can sympathize. When spending my money, I want to know I am not being gouged and that I am getting what I am paying for. It’s this concept of getting what you are paying for that sometimes needs clarification when discussing design.
My creative process typically involves coffee shops, walking, driving and not sleeping. Taking time away from the creative problem is vital to finding a solution. I will catch myself taking a break from working on an identity only to have a sudden jolt of inspiration. It is often these moments away from my desk, times of incubation that are worth every penny a client is billed.
You really can’t force creativity to happen. There are ways to encourage it and a process is there to help direct it, but in the end it has to just happen. So while a project may only take an hour at a desk, I can assure you more time was spent thinking about it.
I think it’s a better idea and more appropriate for clients to understand they are paying for a solution and not for the time associated. A designers’ job is to solve problems. One of these problems is helping clients understand the creative process, and, in turn, the value behind design.
What has your experience been with hourly billing? What do you say to clients that want to pay for design by the hour? Please share your comments using the form below.
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I fully agree, but don’t think this only applies to design. As a web developer, I often come up with solutions to complex problems laying in bed at night, or driving, or eating, etc. Just as designers draw inspiration from all over, developers are constantly thinking about how to solve problems, and the solutions often come at times when we are doing something completely irrelevant.
I am a web developer also and I usually solve problems when driving. My wife is always yelling because I miss my turn. Something about being away from the problem causes me to see the problem and the solution clearly.
First off.. wow so many great comment on this topic because it is always so relevant!
I think that selling your creativity hourly is selling yourself short. Like the diagram illustrates you can not pick, choose or dictate when your brain goes into creative mode.. should i write down the 4min on the train that i thought about the project or the 2 hour that i was inspired while visiting the museum?? clients will never go for that…
We just figure out what it the best way to incorporate our knowledge, skill & time to make a flat rate that is competitive and fair to all involved. ( I have figure out a base hourly raer to help me figure our that number) but once that is revealed to the clint they always want to nickle and dime you..
they really do not understand that just becasue it took you 1hr to finish the solution, doesn’t mean it didn’t take you 10-20 years to be that good! They need to pay for that too.
I always think back to this story i heard about Picasso and the napkin sketch:
The story goes that Picasso was sitting in a Paris café when an admirer approached and asked if he would do a quick sketch on a paper napkin. Picasso politely agreed, swiftly executed the work, and handed back the napkin — but not before asking for a rather significant amount of money(I heard somewhere int he range of $40k). The admirer was shocked: “How can you ask for so much? It took you a minute to draw this!” “No”, Picasso replied, “It took me 40 years”… Exactly!
In the end, the time spent on the design is not even relevant.
The point of design is not how it makes your client feel, but how it makes your client’s customers feel.
Realistically, even if I only spend 1 minute creating a logo or design, it’s true value is it’s ability to represent my client to their customer in one “impression.” How does it make their customers feel? How does it resonate? Do they understand what my client does? Does it express my client’s “flair” to their target market?
What really matters, and this is what needs to be stressed to your clients, is how much credibility it creates/maintains for them in customer impressions.
Design is your expression, based both on intrinsic and learned creative, artistic, and marketing ability to turn your client’s imagination into a powerful symbol that is easily recognized and will define their core brand. Hopefully, this brand will become the keystone in many lucrative years ahead for your client and their company.
I have problems charging any flat fee for this service. Frank Mason Robinson is the guy who designed the Coca Cola logo — one of the most recognized designs on the planet. What was his design worth?
Coca Cola
Market Cap: $130B
Sales, 2009: $30B
How well would Coke do if they changed their logo every Year? Every month?
Design is foundational to brand. Substance supports it (product, marketing, service, people, consumer demand, etc). Solid branding and solid substance will create a lasting company, but the image that company decides to project is the only thing that a potential customer sees before a decision. And they do decide, every time.
You only have once chance to make a good first impression. Ask your clients: What is that worth?
Sorry — compensation:
Flat fee? No.
Fee per production (each time logo is produced, in any format)? Yes.
%of sales, or company worth? Yes.
This is the correct form of compensation. Just like other copyrighted works — music, books, movies, etc. There needs to be a residual income that we enjoy just like authors, entertainers, and song writers. Our work is exactly the same thing.
(Has anyone convinced their clients to go in for something like this?)
Great graphic. My most “productive” time is when I’m laying in my bed at night before sleep. I also often get ideas when I’m laying down with my kids as part of the putting them to bed ritual. Like others have mentioned, I also come up with solutions in the car (plenty of time to think in slow traffic every day.) Staring at the monitor with my IDE or Photoshop open is not always the best way to come up with a solution.
This is an issue that I struggled with a great deal and I do agree with the theory behind what all the flat raters are advocating. 100% in agreement with the theory – but I’ve found loop-holes in the application of that theory.
You’ve all had that client, that you quote a flat rate for, complete the work as per their instructions, make the minor changes after reviews and then inevitably the completely alter the concept because they had an epiphany or a cousin of their’s suggested it. Now they want the project redone based on their new concept and they’re not willing to pay anything more than the flat rate you quoted.
There are numerous other types of scenarios where you have people trying to take advantage of the flat rate concept… …like the client who doesn’t know exactly what they want and revise and add as the project goes, so you end up with something far larger in scope than you had ever imagined.
Now, don’t get me wrong – the client’s aren’t right here and you’re fully entitled to argue with them, struggle with them and fight hard to ensure you’re getting paid. But, that’s not what I got into this business for. I am not a designer and developer because what I wanted to do was debate with clients about costs.
So here is the solution I propose to all of you – factor in the times you do feel creative. (For me, and a lot of others, driving inspires and solves a lot of dilemmas… …but also, the shower. Early morning showers are code havens for me and I solve a large number of code related issues while showering. Weird I know.) Once I factored that into my daily routine, I was able to justify a rate increase to myself. I essentially add $10 to $15 per hour to what I think I should be charging to cover for all those “off the clock hours” where I find inspiration, ideas and solutions. And to me, it works out fairly well and I find myself content.
I also find that it is much easier to explain this to clients and it prevents them from trying to take advantage of me by under-stating the scope of a project or design.
If they inquire about the hourly rate, I explain that I’ve invested 10+ years of my time learning the best possible ways to give them exactly what they want, to the best of my ability and as expeditiously as possible. They have a hard time arguing with it.
Hope my perspective is useful to some of you.
Wow, I was thinking about what my comment would be and then got to tdjukic’s comment. It’s virtually identical to my thoughts.
I spent several years using the flat fee model and essentially lost money every project – meaning that I would estimate a certain amount of time toward a project and agree to that fee, but by the time the project was finished I’d have spent many more hours on it.
I’ve never worked in the sort of environment where people were willing to pay for the value of the work based on how it makes people feel and such. My experience has been more small to medium businesses that wouldn’t be willing to pay $4 million because that’s what a logo is “worth.” I’m not complaining, because I like the scale of projects, but I’d be willing to be a lot of designers are in the same boat.
Lately I switched to an hourly-based pricing system (thanks to the pricing philosophies of Forty where I work) and I’m so much happier.
When a client asks for a change to the scope that they were originally so sure about, it’s no problem. I just remind them it will be x more hours and let them decide if it’s worth it.
My thought is that if you spend time working out a challenge while not at your desk, simply record that time and charge for it. Just make sure your rate reflects the experience you bring to the project.
It’s not for everyone for sure, but it’s been a great fit for me.
Thanks for all the comments and opinions. Really great to have so many people share how they deal with this subject. There are too many comments for me to reply to each individually without repeating what I have already said but Amy’s comments brought up a question:
If you are choosing to bill by the hour in part so can recover any extra time spent beyond the quote, do you offer your client a discount if you are able to complete the project in less time?
If not then would you agree that you are still billing for a solution — you are just putting a cap on the amount of time you will spend.I think here is where I differ in that I would not change any extra to develop an appropriate solution, regardless of the time it takes. I think we all have some idea of the value we provide and none of us would bill a few hours for a logo even if by some stroke of fortune we could complete it in that timeframe as it is the solution we are offering not the time to get there.Really great comments and lots to think about — thanks so much.
(Visit my other site — Processed Identity for Case Studies, Discussions and Articles about the creative process. In particular, the recent articles “Revisions, Redesigns and the Creative Process” (http://processedidentity.com/article/revisions-redesigns-and-the-creative-process/) and “My Clients are Paying for the Process First and the Logo Second” (http://processedidentity.com/article/my-clients-are-paying-for-the-process-first-and-a-logo-second/) address some of the issues that have been brought up in this thread.
Interesting question – do we discount if we complete the project in less time? I don’t consider it a discount, but rather the client pays for the time invested. So if that’s fewer hours than originally estimated, the invoice reflects that.
If I were to complete a logo in a few hours, I don’t have a problem charging for that time. I’m not sure how I’d go about deciding what a logo “should” be worth. Mainly it comes down to client budgets and having a lot of conversation about what they’re looking for. If they can only pay for a 5-hour logo, then the product reflects that and they have to be OK with that.
I think it’s a common thought: If I design a logo in an hour, and only charge an hour of time, wouldn’t I be getting ripped off? But there’s so much more that goes along with a logo design than just creating a picture – research, competitor analysis, thought, sketching, trial and error. And it’s going to be experienced in some kind of context, and showing other branding elements is part of the project, which takes time to work through. It’s my opinion that if a logo is finished in an hour, the designer hasn’t done his or her job.
I am curious to hear what other people charge for designs. It seems like it varies wildly by region. In Phoenix, it’s tough to get people to pay the same fees that L.A. or New York get…
Amy,
Absolutely agree with you that design time is only one factor in pricing and can often be a fraction of the actual time spent. My personal process certainly tends to see more hours go into research than design. (http://www.idapostle.com/visual_brand_identity_creative_process/)
I brought up the “logo in a few hours” idea because I was recently approached through Processed Identity (my other site) by a very talented designer about a logo she designed in an hour or two. I think she would agree that in addition to the design time, the logo would still need to go through all the process check points to make sure it is the right solution for her client.
I don’t believe reduced hours equals a reduction in the value of her solution, just as having to put in more hours due to a rough couple of non-creative days increases the value. The value of the solution is independent of the time spent.
How to determine value? I don’t know of any good designers that share their pricing — including me. My pricing is determined by my experience and abilities, the project specifics and what the market can handle. I think you are correct in saying location plays a factor in what clients will pay as well.
Thanks again Amy!
We’re selling a package: expertise, skills, research, pondering, creativity, and a desire to share same with our clients to provide them with a solution. As stated and restated here, some very important parts of the process have nothing to do with our desk, computer, or even our office. Great post! Thanks.
Very interesting discussion, thanks for sharing everyone.
I just told a client that I would be charging a fixed fee for the design of a website and then an hourly rate for the development, and then I came across this post!
nice post and I totally agree. So much so that I blogged about it: http://bit.ly/Hrly1cmnt
i spent a lot of time in front of my mac to have an idea (i’m a graphic designer) but usually the idea arrives when i’m driving my motorbike..but i forget it when i’m at home
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