WHY WE DON’T CHARGE BY THE HOUR

NIGEL SIELEGAR

14.12.2014

Imagine this, your car is making funny noises and gets overheated very quickly. Naturally, you take your car to a mechanic. The first mechanic is not very skilled, and doesn’t have much experience. He spends 10 hours fixing your car. The second mechanic is very skilled and has years of experience. It takes him only 15 minutes to identify the problem and fix it. Which mechanic would you rather give extra tip? The one that spent a very long time on your car, or the second mechanic that fixed your car in 15 minutes? 

Knowing these two scenarios, your answer would most likely be the second mechanic. However, that’s not exactly how it works in practice. As behavioral economists such as Dan Ariely have found, people tend to tip the first mechanic more than the second.  Why is that?  When it comes to services, people have a tendency to calculate value by the amount of time someone is spending on a job, rather than the expertise or skill that is being provided. 

“What is your studio hourly rate?”

This is a question that every potential client asks us. It's a popular pricing strategy that has been used by many industries, including the creative fields. But we have always shied away from this. In the design business, particularly when you're creating everything from business cards to gaming apps, charging by the hour feels antiquated. 
 
Since opening our doors in 2009, we’ve been incredibly lucky to have worked with incredibly diverse clients with very unique challenges, making it impossible for us to keep a price list. Creating a design solution for a co-working space is quite different than building a platform to sell consumer goods. Designing an educative game app requires a different mindset than building a commercial vehicle tracking system.

Our mission statement clearly states that we are our client’s creative partners. Our clients are coming to us because they want solutions for their business. The faster we work and produce solutions, the faster we can improve our client’s business, product, or whatever that may be. An hourly pricing method, however, would give us incentive to make the project slower. Why should we stretch a project if we can get our client their solution faster? 

How do we charge for our work then? Well, it’s quite simple really. We believe that the best design comes from collaborations between us and our clients. We charge based on the estimated value that our designs can bring to your business. Our work is an investment that you're making in your business, and it's our job to provide you with the best return possible.