Proposals Don't Work

How I replaced them with a scalable pricing model for my graphic design agency — with examples

Hey, it’s Marilyn 😄

Every Monday, I share ‎productised inspiration and ideas, plus what I’m learning to help you build and grow your service business.

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Last edition, I wrote about removing bottlenecks in your business. If you missed it, check it out here:

How I'm Building My Business To Run Without Me

Photo by Pablo Stanley

In this edition, you’ll learn the following:

• Why coming up with a proposal is so hard

• How to NOT use proposals

• Examples of pricing models

Give your best service by creating it once and selling it multiple times

Why Coming Up With A Proposal Is So Hard

Lots of people struggle with creating proposals, and contracts.

For most of them, the issue is due to indecision.

I used to have this challenge because I didn’t know what to offer my clients, and I wanted to win the projects so badly.

That leads to taking the convenient route of allowing the clients to tell me what they want rather than I fix my services to offer them.

I was a designer with multiple disciplines and expertise.

• Want a website? I can do it.

• Want a logo? I can do it.

• Want a 100 page deck? You name it!

Looks like I can do anything that Adobe Software allows me to do.

A proposal was supposed to be the solution to earn trust from the client.

But I was always overwhelmed by the wide scope of tasks I can do, one proposal can take from 2 to 3 days to a week for me to create.

Worst of all, most times they never got me near to signing a client, and I’d never know why.

And I was already using templates from “The Perfect Proposal” created by Ben Burns of The Futur.

Yes, it’s The Futur by Chris Do.

There’s nothing wrong with The Futur’s proposal templates.

It’s awesome and helpful, but it just didn’t work for me.

In this case, I’ve spent way too much time and money creating something that didn’t give me the return of investment in dollars.

It did gave me some experience doing the research.

But most importantly, it helped me learn that I should do away with sending proposals.

Here are my top reasons:

1. I needed a better pricing model that brings me cash and client right away

2. Since it’s payment upfront, clients simply agree on my terms and conditions when making payment like a SaaS*, no need to sign contracts

3. I don’t want to repeat the process of creating a different proposal for different clients

4. I don’t want proposal creation to take away my time to do other things I prefer doing

5. I have not seen myself having to see a proposal before buying a product, this means I can sell a service like a product too

*SaaS — Software as a Service

I realised I didn’t have a proposal problem, the proposal itself is the problem.

How To Ditch The Proposal To Create A Scalable Pricing System?

You will have to do away with FOMO and do these 5 things first:

1. Fix ICP*

   1. Find out who needs a lot of graphics and what kind of graphics.

   2. It will be best that they’ve hired designers before so that they know how to provide clear briefs and understand how the process works.

   3. Most clients with a given yearly budget stay longer than those who only needs to create graphics one-off.

   4. Clients who know what they want usually do not need a proposal.

2. Fix the offer

   1. Based on current or first batch of clients, what common recurring task do you realise you need to do most often? This is the task you can set up as an offer.

   2. If there are too many, pick the simplest one first.

   3. If you don’t know, try things out with trial clients or current clients.

3. Fix the pricing

   1. Make sure your profit margin is 100% after deducting costs and staffing if any.

   2. I don’t have only one client, so my service pricing is shared among all clients. Each client only have to pay a fraction since the time is shared with other clients.

   3. Your pricing can be determined with a simple excel sheet after factoring costs, taxes and other sources of your income. I have a kickass financial system you can use and I will share it with you soon, so stick around more.

4. Fix the timeline

   1. If you have experience doing client work, you can roughly come up with a timeline for each task.

   2. Otherwise, test it out with your clients first before you fix it.

   3. In my case, I’ve tried daily, 3 days and weekly. So far monthly is the best for me. Monthly gives enough time for my team and clients to get to know each other better.

5. Fix upfront billing

   1. Never start until client makes payment upfront. This gives confidence that they are putting in the commitment of their money and time to making the working relationship a success.

   2. There will be times when prospects can’t commit right away. If you are sure they are a good fit, you may give a trial, for example a 7-day free trial to them in exchange for a testimonial.

   3. Once you are good with your upfront payment fee, set it up on your website, using Stripe or PayPal. They have subscription features so you don’t have to spend time with development.

*ICP — Ideal Customer Profile

Here’s my productised design offer with the above 4 principles honed in:

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How It Looks Like Between Using Proposals Vs Productizing Offers

Examples Of Scalable Pricing Models

I call them scalable because you don't have to repeat setting up different packages for different clients and maintain the same sales process.

You can also bill clients for payment upfront since you already know what you are offering.

Full payment upfront helps to keep your lights on as you work.

You can do the same for almost any niche you can think of: web design, web development, copywriting, SEO, bookkeeping, podcast editing and more.

1. One-Time Services

You can do a one-time set up of any niche:

• Set up a business niche

• Set up WordPress website

• Set up basic SEO blog post template

Here’s an example of the offers from BetterLegal.

It is a one-stop shop to help you start a new business.

They handle all filings and generate custom legal docs for your new company.

BetterLegal pricing screenshot

2. Monthly Subscription

Anything that needs recurring help can use the monthly subscription model.

• Ongoing website maintenance

• Graphic design for social media

• Staff or virtual assistants

Here’s an example of a full stack creative productized service, Superside.

Once you sign up, you have access to any creative service at your disposal.

Superside pricing screenshot

3. One-Time + Monthly Subscription

For those who offer ongoing consulting with one-time done-for-you services.

• Set up E-Commerce accounts or strategy with one-on-one coaching

• Build and set up website themes with monthly maintenance

• Website speed audit with ongoing speed optimisation plans

Here’s an example of LayeredCraft that helps you custom create a Ghost site, with and option to subscribe to monthly maintenance plan.

LayeredCraft pricing screenshot

Everything above is based on what I’ve done with my graphic design business, some content marketing and branding consulting.

If you want to explore more consulting pricing methods, I recommend you to check out this article by Nick Lafferty. He has been building his business in public and showing everything from finance status to results of his tests:

Early Exit #2: Consulting

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Thank you for reading, that’s all for today 😄

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