The Price We Pay

By / December 17, 2007 /

In other cities that have it all figured out, the really good creative people consistently make the really okay people look bad because their work is so much better. But there’s a funny thing going on here in Denver. The tables are turned.

The really okay people in this town are making the really good people look like the dumb ones. And here’s why. The rates the half-baked shops and individuals are charging are so low that it makes the first rate people seem crazy for asking clients to pay what they truly deserve. And the whole thing is making us all look dumber in the end (and equating to all of us making less cake).

We’re not just pulling this point-of-view out of thin air. Did you know the best freelance copywriter in Denver only charges $100 an hour? If that doesn’t have you throwing up on your keyboard, consider that one of the best freelance writers in Portland pulls down $850 an hour. Granted, he works with Sandstrom, Nike and W+K, but we’d argue our guy is landing the same number of awards and helping shops land an equal number of new accounts here. The issue is the same for designers, art directors, programmers, illustrators, photographers, production companies, actors, the list goes on…

As part of the research for this piece, we had an in-depth discussion with the people at Creative Manager – an online system used to track time much like Clients and Profits. Know what they told us? The average hourly rate across the country is $275 an hour. Creative Manager has a lot of agency accounts in every type of market in the nation, from small to Saatchi & Saatchi. If the average is $275, that means the green account people are about $125 and the heavy-hitter CD is somewhere around $425. Certainly, that should put you, as an individual or as an agency in this city, somewhere in the middle.

The problem with getting there is twofold. The bottom feeders consistently undercut the good people and unsophisticated clients often choose cost over quality. Secondly, even when clients are trained to look for quality, the bottom feeder pricing gives them leverage to push back on the upper tier’s pricing and whittle it down to a place where everyone is disgruntled going into a new project or new account. That’s not how good work gets created. We’re making our clients a mint and they’re paying us with change from their car ashtrays.

Enough of the problem. Here’s our recommended solution. We’ve heard the argument for charging for “the value” of work, but we believe the vast majority of the city still thinks of client fees on an hourly basis. On January 1st, 2008, everyone in the creative industry in Denver should abide by the following tiered pricing hike structure for any new client they acquire. That goes for every freelancer all the way up to the biggest agency in town. It’s the only way we can begin to get the respect we deserve. Don’t think about it. We’ve done the thinking for you. This has gone on for far too long. Here’s how it works:

Current rate $25: 120% fee increase = $55
Current rate $50: 50% fee increase = $75
Current rate $75: 40% fee increase = $105
Current rate $100: 30% fee increase = $130
Current rate $125: 25% fee increase = $156.25
Current rate $150: 20% fee increase = $180
Current rate $175: 15% fee increase = $201.25
Current rate $200+: Stay where you’re at, let’s see how this goes

It’s time we decide what the market will bear. But it only works if we all embrace it.