Junior Graphic Designer here. Am I being low-balled by a client who I've worked with for the past 3 years? How to remedy the situation?

Question

I hope you bear with me. This is going to be quite a long post. I want to lay out my situation in detail in hopes of getting advice as to what I should do and how to approach it the best way possible.

The situation

When I was in college, I was an intern for a digital agency. One time, the client liked one of the works we did for them so much so he wanted to meet the graphic designer. Long story short, after my internship, he contacted me if I was willing to be their "on-call" graphic designer, meaning I would work for them if projects arise. I agreed to it.

I don't work at their office. I work from home. We talk online. We meet if necessary. I go to their office if I have time. And if I do, I work DIRECTLY and BESIDE him as HE GIVES comments right away.

There was no contract or whatsoever but we verbally agreed I would be paid for every 2-3 projects—which weren't difficult but they require the right creative direction to nail the what the client wants—at about $400.

I'm no longer a student and just got recently hired on my first day-job.

The problem

Our relationship went on for 3 years. During those years, I got paid fairly I would say. It was a good relationship I would say too. But there was a period when I didn't get any work from him for about 5-6 months until in March. So from March - July, I worked on a couple of projects including those projects we did long time ago for revisions. I was waiting for him to pay me after our last project in July but it was almost September and I still haven't gotten it. I sent him a message telling him about it and even sent him an invoice detailing the projects we did.

He was surprised that the invoice was more than what he was usually paying me. Reason being is we had 6 projects during that span and I billed him for $600. I told him how much he was paying before and what it meant in terms of the "projects rendered", which is how I reached that number.

It's now October and we're still negotiating (or probably arguing) how much money I should get paid for.

We met a few days ago and sort of settled how we would go about this. He said moving backwards, I would give him an amount that I think is reasonable for the work and projects rendered. And now moving forward, we would agree on X money every month if there's a project and X money if there's none. I would send him both figure and see if we could agree on it.

I told him the figure but again he thinks they're too high. I said $250/month if we have a project, $80 if there's none. And $500 for the works rendered in March - July.

He told me that I should have a basis for this but I don't know how else I'm going to justify the rate. I based it on the number of hours it takes me to work on a single project — including but not limited to brainstorming, researching, designing, setting up the files correctly, etc.

What now is the solution?

Now I still haven't replied to him because I don't know how to approach the situation. I'm thinking of telling him again how I arrived with that amount (as said above). I would also say to him that I was hired as a GRAPHIC DESIGNER but the responsibility I do is way beyond that. I believe in an agency or design studio, when hired for projects that I'm doing, has a PRINT PRODUCER who manages the files for printer. And I do all of those. I manage the files, set up the files to make sure the printer gets the correct color and size, should know which paper and texture to use, etc.

But is it fair to say so? I also want to say that when doing our projects, he has basically unlimited revisions because it's tough to get what he wants so much so I go to their office just so we can get the revisions done immediately. Not to mention the LATE fees from March - July.

He has told me he thought of hiring an in-house graphic designer but it would be costly to do so, about $300 monthly compared to my usual $200. But it means he would be working at the office, he can finish things faster and efficiently. But he chose not to because we already have a relationship.

I don't know how else to justify my rate but it seems like he doesn't see the value of the work I do for him. He hasn't given a counter-offer of these figure "$200/month if we have a project, $80 if there's none. And $500 for the works rendered in March - July." he just said he hasn't even agreed to the previous amount of $200 (just divide the $400 from our original agreement before to 2 to make it 1 project per month) and now I'm raising it to $250.

What do you think? Am I being too greedy here? Am I not fair enough? Any advice is greatly appreciated.

Location: Philippines.

P.S. All numbers are arbitrary. But to be honest with you when the numbers are converted to Philippine Pesos, it's more or less near the "market rate" or what is accepted for the kind of work I'm doing.

Answer 1

In my opinion you are being taken advantage of at least to some degree. It may not be malicious in nature, but what you've described is absolutely not favorable to any designer, not even in part.

...we would agree on X money every month if there's a project and X money if there's none. I would send him both figure and see if we could agree on it.

How I would see this suggestion:

• The client wants to pay a retainer... okay for what? Are changes happening that often? If yes, then okay. This is separate from any new project. Estimate the number of change requests on average and how long they may take to complete. So, if you find (or estimate) you spend 5 hours a month on average with changes, and your hourly rate is $50hr... 5x50 = $250 is the retainer fee. Thats it, anything less and you are losing money.
  
  If change requests are sporadic and only happen once a quarter or every couple months, it's hardly valuable to the client to be paying a retainer - The client would be better served by merely paying you hourly for your time when they had changes to be made. If they merely want to stabilize that amount.. see the amount above.... $250 - estimated hrs * hourly rate.... don't waiver from that.
• New projects are to be priced based upon standard rates and are not covered under the retainer agreement. Unless every single new projects you create for this client is exactly the same in the amount of creativity, skill, time, and effort involved in creation, you simply can not price them all the same amount.
  
  Sure if every month he wants a few new images for Facebook advertising, then okay.. price those all the same perhaps.
  
  But if in July he wants a Facebook ad and a flyer. Then in September he wants a brochure, a flyer, a poster. And then in October he wants Facebook ad and a 12 page digest-sized booklet. --- well all those can't be blanketed under one single fee. Each of those items needs separate and individual pricing. If you do not price such varied items separately, you may as well pay this guy to work for him. Because you are losing money.
  
  Its important to realize that when I post "losing money" I mean it is costing you more to run your equipment than you would be earning - i.e. heating your home, electricity to run a computer, software costs, etc. I'm not referring to "missing out on possible payments". So, effectively you would be paying the client to work for them.

An important thing to realize is that....

Negotiations do NOT always mean there's a settled agreement.

You have to be willing to walk away if things are not favorable. Sure give a little, but don't let yourself be taken advantage of merely because you think you need this client. You don't. You have a full time job.... realize that he needs you far more than you need him.

I would provide one fee.. the retainer fee and that's it. So I'd reply with something like....

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"A monthly retainer costs $250 and covers all revisions, changes, and updates to any existing project. If you would like to avoid this monthly fee, changes can be made when requested and will subsequently be invoiced hourly at $50 per hour. This may mean some months you pay nothing and some months you pay more than the $250 retainer fee. New projects will be invoiced above and beyond this retainer fee. An estimate for all new projects will be provided prior to work being started."

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I would allow a 10% negation fluctuation.. so I'd be willing to drop to $225/mo minimum for the retainer, but thats it. Anything less and I'm losing money and it's not a client worth retaining. And if they don't agree to pay you individually for each new project, then yeah.... the client is clearly taking advantage of you in my opinion.

Clients do not dictate your pricing. You do. If you know your hourly rate and you know how much time it takes to complete a client request, than that is the bare minimum you should be charging in every instance. If a client complains and does not want to pay that amount, you do not have to work for less. You may choose to work for less, but all that does is ensure you will continually lose money as you gain experience and skills. It's up to you to ensure you get paid what you may be worth.

From my experience, the more you "negotiate" pricing -- i.e. listen to a client complain about paying -- the less likely you are to either get paid, or to get paid adequately. It's a bad client technique to whittle you down to their desires. Stick to your pricing if you ever plan on getting ahead. Good clients will ask what pricing is ahead of time and will pay you when invoiced without complaining - even if they feel teh invoice was too much, they'll pay it then ask you about it. Or ask you about it immediately before paying it. They won't ignore it and wait 30/60/90 days for you to contact them regarding the matter.

To me..... this all rings of a bad client I would not want to work with. Again, perhaps not a maliciously bad client. It could merely be an unaware, small picture, client which may make them a bad client. Nonetheless, I'd be looking to replace that revenue stream rather than spending 90 days trying to get paid.

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Tl;Dr
Freelance designers are typically not paid as if they were employees on a salary. ONLY if both the client and the freelancer can agree upon amount, which covers all work, and the number of hours you are to expected to work is limited, is a single fee remotely possible.

For a designer, if you work on different projects of varying complexity and not the same thing over and over, it's is NEVER in your favor to agree upon one set fee, regardless of the amount of the fee, unless there's a limit the the hours you will work. You will always be better off pricing projects individually or invoicing based upon an hourly rate rather than having an open-ended retainer without time limitations. I would never, on my worst day, agree to one fee as compensation for anything a client asks me to design regardless of the time it takes to create such projects. Remember, you are not an employee.

This client is asking you to provide them with a "blank check" of sorts -- where for one (lowball) fee they can get you to work 10 hours, 40 hours, 60 hours, 200 hours or more. Sure at 10 hours you're making $25/hr if he's paying $250 (which is still low). But at 100hrs you'd only make $2.50/hr.... does that sound reasonable to you?? Put your foot down. You don't have to allow someone to take advantage of you.