Here’s a really interesting question from a friend of mine. His name is Joel Hughes and he is an extremely clever web type who runs JoJet Internet Strategy – they can help you and your company thrive online. Me and Joel spoke the other day about a relatively new issue for me, that of the so-called free pitch.
Lots of businesses pitch their work, and even creative work for free these days, and businesses like Joel’s can feel pressure to do the same. When the competition are doing it, sometimes it can make you feel like you have to do it, but Joel has an interesting take on it. Here is his question:
A big issue with pitching for web work is that some suppliers will throw in free concepts of how the website could look. I don’t/can’t.
One issue here is that you’re giving design work away for free (you’ll probably hit that one out of the park 😉 But a bigger issue for me is that design work done too early misdirects the whole process and can lead the client into deadly blind alleys; as soon as you start talking about colours then all reason goes out the window.
I’m not going to go down this “free pitching” route so, I suppose, the onus is on me to make things easier for the client and to get the value/process across better?
Clearly, Joel has a good grasp on the topic anyway, and he’s most likely come up with the best answer himself. Running your own successful business for more than 10 years does give you a certain commercial ability! But here are my initial thoughts.
Stand by for a complicated Brain Dump!
By way of comparison, media owners always provide free pitches, as do most media agencies that I’m aware of, even when the creative work is charged for once the pitch is accepted. This results in ‘rough draft’ type radio ads and visuals for press, story boards for TV etc.
This complicates the issue for businesses like Joel’s who have always charged to pitch, in that, as more ‘new to the scene’ clients look to use what were previously specialist or technical services, they bring ‘normal’ pressures to bear. Normal in terms of what most other businesses deal with that is.
In other words, as more and more ‘traditional’ businesses require web services they will bring traditional negotiation techniques and expectations to the table.
In my experience, paid for pitches are usually technical or industrial, institutional or really top end (high value) where so much work has to go into the pitch there would not be a business case to do it for free. It would literally cost too much to produce pitch work. (TV pilot for instance)
Issues at play
Competitive and disruptive forces drive prices down which must therefore drive costs down (or all is lost!) This might well result in the requirement for a cheaper ‘pitch’ vehicle that can be rolled out for free. If clients expectations are increasingly that this work will be done for free, you’ll quickly find yourself in a vicious circle! This all ultimately changes the way people do business.
Charging for work where others don’t or in some other way trying to leverage a premium versus the market will normally place you in the top end. The question you have to ask your work sufficiently top end to justify this premium?
Of course charging to pitch immediately weeds out those clients that you might otherwise consider time wasters. It can be a valuable segmentation tool. However, be careful here. If everyone else is doing it for free, its easy to become a proud pauper.
I really feel for designers in terms of giving away the design work. It seems to be the thing where you are providing the most value, yet clients typically expect it for free! However, it’s always been extremely difficult to ‘price’ creative value. One mans masterpiece is another’s scribble.
And that’s part of the issue. Basically it comes down to whether your clients think your work is good enough to justify paying a premium. Apple is a great example. People pay way more that the going rate for those products because of the power of the brand. The value of the design if you like.
‘When you start talking about colours, all reason goes out the window’
From the clients perspective, the problems the designer faces in bringing the product to market are your problems not theirs. These problems tend to be factored in by the vendor these days, not offset back to the client. So it’s extremely difficult to argue the creative processes angle.
Simply put: Is everyone else doing it? Some of them doing it? None of them doing it? Consequently…
Will your customers continue to pay you to pitch to them? If not and if you are unwilling or unable to change your approach – you will need to come up with a way of demonstrating why paying you to pitch to them increases value for them versus the value the market provides for free.
Typically this is either because your product is so much better, or your brand has that much ‘power’ customers are willing to pay up front, or maybe you will be able to demonstrate that those competitors that aren’t charging to pitch are ‘hiding’ that cost somewhere else in the process.
On your side is the universal law of ‘price and differentiation’. People believe stuff is good OR cheap. Though the internet continues to blur lines in this regard, it’s still pretty much the case that people believe you get what you pay for. And asking people to pay for a pitch is a good way to differentiate you from the crowd I think.
Just be prepared to be able to back this up with deliverable and high value solutions!
What do you think? Joel has come up with an interesting question here, and also clarifies that generally he works with businesses that know and value him. This means there is less pressure to pitch for free. But given there are two types of business – New business and repeat business, he will certainly face this dilemma at some point.
What have you found to be the answer? Or what do you think about the issues this throws up? Leave a comment, I’d love to hear from you, or email me directly on TonyDowling@CompletelyFreeMarketingAdvice.com