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When I was a photographers' rep, I encountered lowballing all
the time. Clients would say, “This guy came in at under half what
you want. We have to go with him.” Now that I'm a consultant, I
still hear from agencies that say that they often get bids from
creative professionals that are incredibly low and/or that include
all rights. While we all want to think that a freelance creative
professional is chosen for his/her abilities, often the reality is
that a client can find good creative for an incredibly low
price...thanks to lowballers who are ruining the industry.
So, just what is lowballing and why is it really bad for all of
us? Many people define lowballing as the act of charging less than
your competition. That's not an accurate definition. Lowballing is
charging less than the fair market price. The difference between
those two definitions is enormous.
Think about it, if you are a photographer, what's the difference
between losing a gig to a shooter whose estimate on a $10,000
project was $500 less than yours, and one who is willing to charge
$1000 for the whole gig, including all the rights? In both
situations, you didn't get the work, right? However, in the first
case you know that the other shooter was probably chosen because
his/her style was more appropriate, or s/he has a long-standing
working relationship with the client, or s/he brought something
else to the project that worked better for the client. In the
second case, it's all about the money.
Lowballers usually rationalize their actions by saying that they
work more days than other, more “expensive” freelancers, and it
provides them a living. They say that they have lower overheads,
which permit them to charge less and that if others want to
compete, they'd better reduce their overheads and lower their
rates. They live via “volume” sales like their work is some sort of
commodity and not a creative service, and they see themselves as in
competition with all others in their field.
The problem with those lines of thinking is that lowballing
isn't about competition; it's about desperation and fear. They fear
that if they don't charge less, they won't get the job and thus
won't be able to feed their families. They have to work more days
in order to make that living, and worry that losing any project can
be a threat to survival. If they restrict usage, they're afraid
they might lose a job.
It's all about working from the negative. And it's all about
thinking about oneself only, forgetting that the actions of each of
us in our industries affects all of us. We need to remember, and to
remind lowballers, that we need to stick together to continue to
have good paying projects over the long term and that by working
together as colleagues we don't need to be so concerned about the
Let me explain. At this point in time, there are still a lot of
projects out there that have good budgets. Agencies call creatives
for their bids (in the ever-popular triple-bid system), and have
plenty of money to spend. Two of the bids come in close to each
other and one comes in at less than half the price. Who gets the
project? Very often the middle or the highest bid. The choice
between those two is based on which is the best creative match for
the project. The lowest bid is simply ignored.
Surprised? You shouldn't be. Agencies and clients can still see
the value in the higher bids. They know that those bidders have
respect for the value of their work and the importance of the
project. The higher bidders won't waste money, but will spend it
where needed to ensure the best quality solution they can provide;
and they most definitely will not cut corners trying to make do
with less than they need to produce the best solution, as a
lowballer would to try and make a profit.
It's win-win-win for the freelance creative, the agency, and the
client. And that is the way most of the business is. One of the
best results of this business approach is that creatives are no
longer in frantic competition with each other. By that I mean that
when price is no longer the most important issue, the right
creative is selected for any particular project because s/he is the
best match for the project. It frees the creative to focus on doing
the best creative work s/he can do and that will bring in more and
better work—so you won't need to panic if you don't get that one
Unfortunately, lowballers don't see this. They don't seem to
understand the value of, well, value. But it shouldn't be that
difficult of a concept. For example, when you buy a car you know
that a BMW is going to cost more than a Kia. Why? Because the BMW
is a greater value—it has a higher resale price, it has a good
reputation and will last, it's better designed (both inside and
out), and it gives others the impression that you are more
successful. For that value you pay considerably more than for the
Agencies and clients aren't stupid—they want to save money, of
course, but they also understand that spending money for value is a
good business decision. If they are spending $10 million on ad
placement (media), they understand that the visual had better be
compelling and the right visual for the ad. They're going to want
to work with someone who understands the importance of that
investment and who will give them the visual that they need.
Someone who bids $5,000 to create that visual does not show that
they understand the value of the ad and the value of their own
work—and they will not be awarded the project. Someone who bids in
the six-figures shows that they do understand these concepts and
they will get the project. Remember, $100,000 is only 1% of that
$10 million media buy—this is not an unreasonable number.
How many lowball projects will it take to earn that
Now, unfortunately, because of the lowball mentality, those of
us in the creative industries are facing greater, more organized
threats to our livelihoods. We need to be aware of these threats so
that we can face them, choose not to support and/or use them, and
educate other creative professionals to do the same.
In the case of photography there are companies like
OnRequestImages.com, which claims to provide “custom stock” (an
oxymoron) at a low rate. Photographers who work with OnRequest are
freelancers who, essentially, shoot projects on spec, with no
guarantee of getting any project or even making up their expenses.
Even when they do “win” the project, the money is way to low for
the rights granted.
On the design side, there is eLance.com. This site has companies
post projects (from IT to creative) then the “service providers”
bid on those projects. Usually, lowest bid wins. If you take a look
at their listings, they have over 3,000 graphic design
Some agencies, especially low-end ones, love these services
because they are saving buckets of money on their creative budgets.
And who can blame them?! If they can give their clients strong
enough creative for less than half the cost of using a traditional
designer or photographer or illustrator, they are compelled to do
so. As the quality of the product produced by the creatives who are
providing their services via these companies improves, more and
more agencies and end-clients are going to use them.
But who is going to make money—the creatives? No way. These
“service” companies will. Hand over fist. Large, impersonal,
corporations who care little for the creativity but will squeeze a
penny until Lincoln screams if it means increasing the share
Eventually, if we continue down the current path, we will be
left with creative services bought and sold as commodities for the
most part, and an elite few (VERY few) in each discipline who will
be able to command large sums for their work.
We can stop this from happening. We need to contact these
“creative service providers” and educate them (forget about the
“services” themselves as all they care about is the bottom line).
Explain to these creatives how they are hurting the industry and,
more importantly, how they can make more money and work less by
running their businesses in an ethical manner. Show them the
example I gave above. Share real world numbers with them. Let them
see how they can earn more because they are worth more. Encourage
them to strive for something better than being busy creative serfs,
and keep them from working for these “services” like OnRequest and
eLance. Help them find their spirit—what it was that made them
become creatives in the first place.
Also, share this information with student creatives. So many
graduate from art programs with little to no coursework in
business. They are the future of our industry and we need to take
the time to make sure they understand how it works and what they
can do to continue to improve the financial and creative aspects of
Lowballing, whether the “old fashioned” variety or couched in
these new “services,” brings down the fair market value of any
creative service. And that, in the end, hurts the lowballer as well
as the rest of us. Once the bar is lowered to the lowballers'
level, there will not only be no raising of it (no matter how we
try), but also, sooner or later, someone else will lowball the
lowballers and the downward spiral will continue. We need to put a
stop to it now.
In order for creativity to continue, for it to be given the
space needed to explore new possibilities and to grow, we need to
keep the financial bar raised. Will we be able to change everyone?
No, of course not. But we can change many people's attitudes and by
doing so ensure that we all have healthy businesses in the
How do you put a price on your creative services? Consider these strategies for getting paid what you’re worth.
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It is crucial for designers to always be learning in order to keep in step with changes in technology and information.
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Section: Tools and Resources -
finances, studio management
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