Last year I wrote a blog post all about what you need to know about charging $5,000 for a web design package. Inside of that post, I briefly mentioned one pricing formula that should be taken into consideration when setting your web design prices. But there are actually two pricing formulas you need to be aware of!
You see, pricing is part art and part science.
Science = all the concrete things you can take into consideration (ie. time, tools)
Art = all the abstract things you should take into consideration (ie. value)
These two pricing formulas take both the art and science of pricing into consideration so that it’s easier for you to determine how much you should charge to build a website.
Web Design Pricing Formula 1
The first pricing formula takes concrete things into consideration:
- Overhead costs
- Hours you’ll be working
The actual equation looks like this:
overhead costs + (hours you’ll be working x hourly rate) = package price
Your overhead costs include things like the tools you’ve purchased to design a website (Canva, Adobe Illustrator, etc.) and the tools you’ve purchased to build a website (Divi, Elementor, etc.). Just because you’re using these tools for all of your clients (ie. Divi) or they were only a one time fee, doesn’t mean you shouldn’t be factoring those tools into your pricing.
Web Design Pricing Formula 2
The second pricing formula takes abstract things into consideration:
- Value you’re providing for years to come
This formula is a little different because it isn’t an addition / subtraction / multiplication formula. Instead, it’s something for you to be aware of.
Pricing = 10% experience, 5% features, and 85% messaging.
(I actually teach this formula in my free web design business workshop so click that link to sign up and learn more!)
The actual bullet points of what’s included in your package are known as the features. And these matter the least when it comes to your pricing. A lot of my students struggle to accept this at first because they’re confident that leads will either package compare or price shop. It isn’t until they adjust their packages to be more niche specific and start landing clients more easily that they realize features aren’t the main selling point of a package.
Your experience doesn’t hold much weight either when it comes to landing clients or setting your prices. You could be the most experienced person in the world but with shitty messaging (messaging that focuses just on the features), you’ll never be able to charge premium prices. That’s why messaging makes up 85% of this equation.
You always have to take your marketing materials into consideration when setting your prices since messaging is the backbone of selling your web design services.
How to Use the Two Formulas
When pricing your packages you have to take both of these pricing formulas into consideration. If you only focus on the value you’re providing then you might undercharge for your services by ignoring the time it takes you to design and build a website. If you only focus on overhead costs and the time it will take you to design and build a website, you’ll definitely undercharge for your services.