27 June 2006

What kinds of compensation are acceptable!

A recent debate between Bruce Nussbaum and Michael Bierut regarding the approach and compensation for the design of IN, the new publication from Businessweek was an interesting exchange between old school ‘graphic arts’ thinking and a more aggressive business and marketing approach.

There are many types of compensation that we as designers, marketers, researchers, etc., can take from a project. Money - the check we cash is just one. Most all of us have produced pro bono work for a good cause. In that case the return was in our hearts. For other projects we may just want our name and reputation attached to it. I have taken on projects that in early development looked like they had much more potential than the client envisioned. In those cases we would often invest extra resources so that we might achieve some sort of break through. In this sort of case we shared the extra dividends with the client (whether they were aware of it or not.) The compensation can be a great case study, return business, a portfolio piece, or in rare cases pushing the envelope of our discipline.

What the AIGA needs (in my humble opinion) is a lesson in value. When designers work on a project and compete on price regularly, they certainly devalue the perceived worth of there offering. That, in fact, positions them in the market place. Truth be told, most customers assess the quality of your work based upon price. They often do not have the insight (how could they) to know what really went into the creation of a gem in your portfolio. Discounting a project to get a foot in the door is sometimes a prudent move that allows you to show what you can do, establish a relationship, and show the client what it is like to work with you (the good and the bad.) It also sets a dangerous precedent. But why should the designer not have the prerogative to take that chance?

Price is measured by calculating the difference in our cost and the optimal charge we might demand. When we discount our rate, we share some of the price of a project with the client. The resulting number is the value of the project – both to the designer and the client. This is, by the way, a standard lesson n any business school – often called the CVP triangle.

So my suggestion is that we as business people (yes designers, that is what we are) open up our minds and think in terms of value, both as we purchase services and as we perform them. Our take away from a project is much more complex, and much more rewarding than the money. In the case of the IN magazine… a publication that promises to promote the worth of design and innovation, you would have to be crazy not to jump at that opportunity. Whether for free, or with the additional investment of time… the PR value alone is worth more than the likely price of such a project.