This blog is part of my Pricing Series. I dive into everything from pricing strategies to pricing psychology and more. Be sure to click here to subscribe to my email list so you can be the first to know when the next blog drops each week.

Let’s face it: we’re all in this creative business thing to make money. 

Without it, what you have is less of a business and more of a really expensive hobby. 

But, you also want to do right by your clients and customers – it’s not just about profits, but about people too.

So here you are, at the crossroads of making a living and making a difference. You need to strike a balance – ensuring you’re fairly compensated for your hard work, while also making your services or products a fair investment for your customers. 

In this blog, we’ll explore how to achieve that sweet spot, where your business thrives financially and ethically. 

I’ll help you find that blend of profit and fairness – the kind that pulls in your dream clients, meets your financial targets, and lets you sleep soundly, confident in the value, fairness, and ethics of your prices. 

Ready for clear, actionable pricing strategies specifically for creative businesses like yours? 

Let’s dig in.

The Importance of Fairness in Pricing

Before we dive into HOW to price your offers with fairness and ethics in mind, let’s consider why fair pricing is beneficial to you, your business, and your clients. 

It needs to be a win, win, win!

Three solid reasons to embrace fair pricing in your creative business:

For You, The Business Owner: Establishes Longevity

Setting fair prices is planning for long-term growth. It shows you value your work and are committed to your business’s future success.

This approach not only helps build a loyal customer base who trusts in both you and your pricing, but it also ensures that your business remains sustainable and profitable over time.

It’s about creating a stable foundation for your business to thrive both now and in the long run so you can continue to make a living doing the creative work you love! 

For Your Business: Cultivates The Right Relationships

Attracting the right customers is crucial for your business. It’s about quality over quantity. 

Think of it this way: would you rather have 100 people buy your product with 95 of them returning it? Or, would you prefer selling to 5 people who not only keep your product but also leave glowing reviews because they feel that it was a good and fair investment? 

Customers who value and understand your work are more likely to be satisfied, leading to repeat business, positive word-of-mouth, and a stable, reliable customer base.

For the Client: Builds Trust and Satisfaction

Flip the script to your client’s view. Fair pricing means they’re getting value, and they can feel good about it. This builds trust, sparks joy, and turns them into your personal cheering squad. 

Happy clients not only come back for more (gotta love good retention rates), but they also bring friends.

Initiating Fair Pricing in Your Creative Business

Understanding the importance of fair pricing is one thing…actually implementing it in your creative business is another. 

The ethics of pricing? It can feel like playing pin-the-tail-on-the-donkey.

But instead of a donkey, it’s a unicorn, and instead of a tail, it’s your price tag. 

Blindfolded, spinning, and trying to hit that magical spot where everyone (you and your clients or customers) feels like they’ve won the jackpot.

There’s a fine line between competitive, profitable pricing and exploitation. Crossing it – even unintentionally – can tarnish your reputation in the creative industry where word of mouth spreads faster than a viral TikTok dance. 

So what can you do?

To make sure your rates are profitable, competitive, and ethical, start by: 

1. Understanding your Ideal Client Avatar (ICA) and their journey. 
2. Then, take a look at what your competitors are doing to see where you stand in the market. 
3. Keep your pricing transparent and honest. 
4. And finally, don’t forget to communicate your pricing and value clearly. 

Let me walk you through this process step-by-step and demystify what solid, profitable, honest pricing can look and feel like in your creative business!

Market Research + ICA

As you navigate the ever-shifting landscape of your market, understanding your Ideal Client Avatar (ICA) is essential so you can thrive in your industry, with pricing that’s fair, competitive, and ethical.

Enter: market research.

In order to be fair, you need to understand this:

Who is your offer intended for? 

Picture them in your mind. Who are they? Where do they brunch on Sundays? (Do they brunch on Sundays?!)

But seriously, who is your offer really for? 

A fair price isn’t just pulling a number out of a hat, it should be an accessible price that meets your ICA right where they are, balancing what they need and desire with what won’t have them running for the hills (or worse, to your competitors).

Consider the following in your market research:

1. Where are they on their journey? Are they bootstrapping beginners, seasoned pros, or somewhere in between? 
2. What experience are they looking for? Are they looking for a deal, or are they in the market for a luxury experience? This is crucial. Your price should resonate with this expectation. 

Say you’re a web designer. If your ICA is a start-up entrepreneur pinching pennies but in dire need of a solid website, your pricing strategy could include a basic package that offers just enough support without breaking the bank. 

On the other hand, if your ICA is a well-established business owner looking to update their online presence with all the bells and whistles, your pricing can and should climb, reflecting the upscale service they’re after.

If you pitch that low-ticket offer to your well-established business owner, you’re probably going to be met with silence. 

On the flip side, offer your high-ticket package to a newbie and instead of handing over their credit card, they’ll likely get overwhelmed, intimidated, and completely turned off (this is where mismatched pricing can feel unethical).

The last thing you want is to seem out of touch or tone-deaf!

Market research and a clear understanding of your Ideal Client Avatar (ICA) will help you steer clear of misaligned pricing pitfalls, so your offers hit the mark, every time.

Competitor Analysis

After honing in on your Ideal Client Avatar (ICA) through market research, the next step is positioning yourself in the marketplace. 

Understanding whether your target is a bargain hunter or someone looking for a high-touch experience is key. This insight lets you figure out how your offer stacks up against other creative businesses in your industry.

A great way to start? 

Spy on your competition (but in a totally non-creepy way). 

The goal is never to copy, but to get a pulse check. If they’re targeting an ICA similar to yours, analyzing their pricing can provide valuable clues. 

Are you on par with the current market and economic trends? Does your pricing reflect the current state of the industry and the expectations of your ICA?

You can readily answer these questions once you know:

1. What competitors are charging.
2. What that price does (or does not) include.

This info can help you set yourself apart and stand out from the crowd.

Look at how your competitors are pricing their offers and compare it to your own. Then, think about whether you want to tweak your pricing to stay competitive or change what you’re offering.

Sometimes being competitive isn’t always about discounting your offers. Instead, it can be about adding value!

For example, if you’re a graphic designer, how about adding a brief brand style guide when you deliver a logo? This way, you’re giving more value that really resonates with what your ICA needs and can pay for.

Remember, the price you set is more than a number. It represents your experience, your brand, and the unique value you bring.

Getting to know your competition helps you move through the market with confidence. It makes sure your prices are competitive and match what your clients are ready to invest in and able to afford.

Focus on Standardized Pricing

In today’s market, personalized pricing has become increasingly common. This means that instead of setting a consistent price for everyone, businesses tailor their prices based on several factors such as the customer’s buying history, location, demand for the product, or even how much they’re willing to pay.

The goal is to boost sales and make more money by setting prices that match what each customer likes and can afford.

However, I’ve always believed in the importance of standardized pricing.

Why? 

Personalized pricing might seem like a golden opportunity for more profit, but it can actually lead to customer distrust and harm your brand’s image. 

In my business, the ethics of price discrimination is something I take seriously. I strive to treat every customer fairly, no matter their budget.

Now, are there exceptions to this rule? 

Absolutely…

Legacy Pricing

Legacy pricing is a more ethical form of personalized pricing that rewards loyalty. Often this means keeping long-standing clients on their original rates as a nod to their continued support. This is fair, in my professional opinion, because it rewards loyalty without penalizing others. 

It’s a nice gesture and can be a good business strategy, but as a business owner, you need to be careful. You don’t want to undersell your current value just because someone has been with you since day one.

COO Tip: Many of my coaching clients find it tough to raise prices for their long-standing customers. The worry? That higher rates might scare them away. But, if you plan it right (and deliver a top-notch client experience), most clients understand and accept the change. The key is to be strategic – give advance notice and limit price hikes to no more than once a year. This approach often leads to clients happily accepting the new rates without much fuss.

Incentivized Pricing 

Another form of fair personalized pricing that many businesses use is incentivized pricing. 

Incentivized pricing is about spurring your audience to buy…now! For example, you might offer a special price or discount during a product launch or within a limited promotional period. 

It’s completely ethical, as long as you’re clear about the details – like who is eligible and when the deal expires.

Payment Plans

When it comes to being fair, pricing isn’t always about the price tag itself! Sometimes it’s also about how your clients are able to pay!

Offering payment plans for your higher-priced offers can be a smart strategy, especially for attracting customers who might hesitate at a large upfront cost. It’s a way to make your products or services more accessible, opening doors for those who can’t pay all at once.

However, it’s important to carefully consider the structure of these payment plans. They do have their downsides, like the risk of late (or worse, failed) payments and the extra admin work they bring. But, these risks can be managed with the right approach, keeping your business secure while offering flexibility to your customers.

In my business, I’ve struck a balance with my payment plans. I make sure my customers fully understand their options upfront so they can make informed choices that suit their financial situations. 

This approach not only supports your customers but also upholds the integrity of your business.

Payment Plan Considerations

When setting up payment plans, consider whether to add extra “convenience” fees. Charging more for installment plans (anywhere from 5-10%) protects you financially while giving your clients 2 options: to pay upfront and save or pay more to spread out payments. 

That being said, it could widen the gap between those who can pay all at once and those who can’t. Offering no-penalty payment plans might make your services more accessible and inclusive. 

There’s no “right or wrong.” It all comes down to your values, morals, and the financial risks you are willing and able to take on in your business.

Striking a balance between fairness for all parties isn’t always easy. It’s a constant balancing act that needs regular reflection and adjustment. At the end of the day, I’ve found that sticking with standardized pricing isn’t just good ethics – it’s a cornerstone of a business that lasts.

Transparency 

Deciding whether to publicize your prices is a surprisingly hot topic among business owners and coaches alike. From my perspective, opting for price transparency is often the best route. 

Why?

It upholds the idea of standardized pricing, allows your Ideal Client Avatar (ICA) to gauge if you’re in line with their budget, and helps filter out clients who aren’t the right fit. 

Think of it as both a shield and a magnet!

Transparency is key to building trust with your customers. By having a clear, visible price list and consistent pricing methods, you eliminate guesswork and foster a sense of openness and reliability.

Now, how you choose to implement this is your call. 

One approach is to display your prices directly on your website, making them easily accessible to all visitors. 

Alternatively, you could use your pricing information as a tool for engagement. For instance, offering a detailed pricing guide in exchange for an email address can be an effective opt-in strategy. This not only provides prospects with the pricing information they’re looking for but also helps you grow your email list for future marketing initiatives and capture warm leads.

Whichever path you choose, remember that pricing transparency reinforces your brand’s honesty and integrity. It’s about making it easy for potential clients to understand what you offer and at what cost, helping them to make informed decisions that are right for them.

COO Tip: Standardized pricing and transparency are great, but they might not be right for every creative business. For makers or product creators, it’s crucial to have a set markup strategy to handle fluctuating costs, like material expenses. Being clear about fees and what’s included in your service helps avoid misunderstandings and prevents scope creep.

Contracts and Communication

Let’s talk about the less glamorous, but oh-so-crucial part of your business: contracts. 

I know, I know, it’s not the fun, creative work you live for. 

But trust me, a clear contract holds all your pricing info together behind-the-scenes, so you can price fairly and pour into the work you’re passionate about without any unexpected hiccups along the way.

No matter what creative work you do, you need to spell out the nitty-gritty pricing details in your contracts. While I am not a legal professional and highly recommend you work with a lawyer to shore up your contracts, here are some of the essentials to consider: 

Contracts

Think of your contract as your business bodyguard – it’s there to protect, guide, and make sure both you and your client are on a path to success, free from misunderstandings and last-minute payment panic. 

It’s there to keep things clear and make sure you and your client know exactly what to expect, without any last-minute surprises or confusion. Your contract helps to make sure everyone knows the plan, from how they pay and what you’re going to deliver, to when it’s due.

Now, let’s talk about money (the reason you’re reading this blog). 

In your contract, it’s super important to be really clear about all the pricing details so there are no mix-ups or misunderstandings about the financial part, and your clients can feel confident about their investment. 

Payment Schedules

One of the most important parts of your contract is your payment schedule. Are you a pay-in-full-at-the-start kind of entrepreneur? Or maybe you prefer to offer your clients an installment plan – a little now, a little later. Whatever your style, make it clear as crystal in your contract.

Clear is kind, so the more transparent you are about not only how much your clients will pay but when and where (i.e. check, invoice, etc.) the more confident they will feel investing in your and your products or services. 

Project Scope

I like to leave nothing to the imagination when it comes to pricing and payment. 

Your contract should outline exactly what your client is getting (and just as importantly, what they’re not) for the price they’re paying. This means detailing every aspect of what’s included in their project, leaving no room for guesswork or assumptions.

Here’s a real-world example for a service based business: imagine you’re designing a logo. Your client loves your initial sketches, but then, mid-way, decides they want three extra design options, plus a matching letterhead. 

Lucky for you, if you’ve outlined the project scope and pricing in your contract, you’ve already anticipated this kind of dilemma in your contract, detailing how additional requests will be handled and billed. This will save you from the dreaded scope creep – that sneaky project bloat that can eat into your time and profits.

Often, people assume that defining scope only applies to services, but it’s just as important for products. 

Think of the classic ‘batteries not included’ notice – it’s there to clarify exactly what’s included in your purchase. This is about making it clear to customers what they’re getting for their money, whether it’s the main product, accessories, add-ons, or anything else. 

Clear communication about product scope ensures customers understand exactly what to expect.

Fees

Finally, be clear about your fees from the start. This includes any extra charges, taxes along with options for add-ons, upsells, or more affordable alternatives. 

If you’re adding costs for credit card processing, printing, production, or shipping, make sure to communicate these upfront. Being transparent about all potential expenses helps avoid surprises and builds trust with your clients.

Communication

Outside of initial contracts, clear communication is key throughout the entire project or transaction. It makes the client experience butter smooth for you and your clients.

Strong communication is often something I focus on with my business coaching clients for project management, but it is equally as important for your pricing and payment processes!

Money talk can be challenging. But having CLEAR policies and CLEAR methods (like equations or points of reference) for setting your prices makes a big difference. 

Plus, when you understand how you arrived at your pricing, you’re more prepared to discuss it confidently and clearly when needed. 

And remember, confidence often leads to more sales!

Make your pricing clear, make it thorough, and most importantly, make it a reflection of what you stand for as a professional.

This is the foundation upon which you can consistently build respectful, and, dare I say, enjoyable business relationships. 

Setting Prices That are Fair For You Too!

Last but not least, remember that pricing also needs to be fair for you as the business owner!

You can consider all of the factors and strategies I’ve outlined above, but at the end of the day, if the numbers don’t add up, your pricing isn’t truly fair. 

At the very least, your prices need to cover the costs of the resources you use to create your product or service. 

Beyond that, you deserve fair compensation for your time and effort. This should reflect your experience and the value you provide. 

One way to ensure this is by setting an hourly rate that fairly compensates you. Then plug this rate into your pricing equations to make sure you account for the true cost of delivering the product or service. By doing this, you make sure your prices cover your costs and investments. 

From there, you can consider other pricing models like value pricing, but you’ll have the peace of mind knowing you’ve already secured your baseline. This method helps balance your financial needs with what’s fair for your clients.

COO Tip: My Product and Service Pricing Calculators can help you with this math! Check them out here. 

Conclusion

Remember that fair and ethical pricing is an ongoing process. It changes as your business and clients do, and as market trends shift. 

The key? 

Regularly review your pricing to ensure a balance between what’s fair and right for your customers and what’s equitable and appropriate for you.

Always value your work, know your clients well, be open about your prices, and communicate clearly. Keep these ideas in mind as you grow your creative business, and remember, I have tons of other resources here to help you every step of the way.

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This is the last blog of our 4-blog series all about pricing in your creative business. Check out the rest of the series and other pricing tools here:

Pricing Series

• Harnessing Customer Feedback for Strategic Pricing
• Unlock the Psychology of Pricing: How to Influence Perceptions & Boost Your Value
• Beyond Pricing: Building a Sustainable Business Model

Past Pricing Blogs

• Navigating The Evolution of Pricing With Confidence
• Pricing for Profit
• Why Pricing Your Offers in a Vacuum is Dangerous (and what you can do about it)

Together, let’s build businesses that are not only profitable but also brimming with integrity and respect.

Your sleep will be sweeter, and your clients happier (your bank account too), when you know you’ve struck that balance of fair, ethical pricing. 

Here’s to pricing confidently, serving your clients brilliantly, and growing a business that’s as creative and unique as you are!