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What is a good formula for determining a usage rate for clients that want to purchase native files?

Thanks for your input,

Kristy

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There are a few ways of approaching this and there is no 'right' answer:

  1. lost business. Assume ~30 ads a year continues at $35 an ad, that's $1050 a year. Track that forward 2 years and you've got $2100 (or track forward longer if you think that's an appropriate run-time for the ads). It's easy to explain to the client and works for them as long as they are producing more than 30 ads a year (or making them for more than 2 years).

  2. 'what seems fair'. Hat tip to Dan Mall and his book Pricing Design for this one. Basically, you ask yourself what you'd trade for the artwork. An iPad, a month's rent, a year's rent, a new car, etc. It's a really handy way of getting your own ballpark sense of what you'd be willing to walk away with.

  3. Ask the client. Ask your client what it's worth to them. Note the above: that this will allow them to save money and act more rapidly in the long run. 'Anchor' the cost by asking if it's worth $500k, $50k or $5k (they'll instantly say no to $500k, but it makes $50k suddenly a little more palatable).

Whatever you do, note what rights you are handing over to the client. For example, if you note that you are formally handing over complete ownership and copyright to them that in itself can raise the cost.

Finally, think about how you can use this to boost your relationship with that client (and their distributors/reps) - can you use this to move yourself into being someone who makes templates for them? Someone who designs concepts for campaigns? Someone who works at a higher (and more expensive) level?

  • Alex, I appreciate your taking the time to answer my question. I have read many articles but had not yet stumbled upon a good formula for figuring out usage rates. Thank you. – imkristyk Mar 20 '17 at 20:05
  • No problem. Another great resource is the Graphic Artist's Guild handbook of ethical pricing (they update it every few years). Well worth grabbing just to get a sense of average rates - though it covers a lot more including IP hand-over. – Alex Magill Mar 20 '17 at 20:07
  • I do have the Graphic Artists Guild book but it is out of date. Might be time to invest in a new one. :) – imkristyk Mar 20 '17 at 20:16

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