A different way to come up with pricing for 3D

[Brian Smith]

My business partner and I were recently attending an annual developers meeting in our area and had the opportunity to speak to several dozen potential clients about what we do. We found a corner of the room to setup a laptop with a long looping animation playing and for over an hour were swarmed with about 20 developers inquiring about our services. One of the first questions each wanted answered was "How much does something like that cost?". Pricing a 3D project is an enormously challenging task, arguably the most difficult and most critical to any business. Throwing out quotes and prices during a closed door meeting with a few people is difficult enough, but even more so in the kind of situation we were in where many people are listening in. The sticker shock of large animations can scare anyone away before you have the opportunity to explain why it can cost so much or how the cost can be reduced by offering a different scope of services. My partner and I have always tried avoiding throwing out numbers until we have a chance to truly get the client's attention in a private meeting where they can't up and walk away. But this opportunity is not always possible, such as in the meeting we were in.

 

So we were thinking of a different way to give potential clients an estimate of what we do and we came up with the idea of simply saying "The 1st exterior rendering is usually about __% of the cost of a complete set of architectural drawings and each additional rendering is 10% of the total cost of the first. The 1st minute of an exterior animation is usually about __% of the cost of a complete set of architectural drawings and each additional minute is 30% of the total cost of the 1st. The same applies to interior renderings and animations."

 

There are numerous benefits of using this approach as I see it.

First, you are not actually committing to a price in any way and it's a tactful way to provide pricing without the sticker shock, especially in a public gathering.

Making it a fraction of the cost of architectural plans puts it in a nice perspective that is easier for the client to swallow. Whether your client is a developer, an architect, or whoever, they will most likely have an idea of what it costs to create a set of architectural drawings and be able to formulate an idea themselves.

The more complex the building or development, the more expensive the drawings and hence the more expensive the 3D visualization.

 

Bottom line is that I think it's important to come up with a way to avoid having to provide pricing at inopportune times, yet it's equally important to not make the client wonder why your avoiding giving them a price. Anyone care to weigh in?

[William Alexander]

Did it feel like a feeding frenzy? Like you where being eating by Pirana's?

 

Just curious

WDA

[mahorela]

I think you are spot on Brian, this is a much better way of providing the dreaded 'ball park figure'. Thanks for sharing.

[Ernest Burden III]

My old mentor said he could just as easily price a rendering by the square inch (it takes a certain amount of time and effort to draw/paint any given surface area of an illustration board) though I don't think he actually did costing that way.

 

When my father was a young renderer, he had printed up a sheet with a price list. It was that simple.

 

But no matter wgat, it's never been easy.

[Crazy Homeless Guy]

i have never liked it when people try to price an animation by minute of animation.

 

we typically price an animation by adding on an additional percentage to will take to produce still images. our proposal sets that at 20% of the cost of a still image right now. we are starting to do more post-production work as part of the process of animation, so that number will need to come up.

 

setting up pricing this way is interesting. some people would formulate an idea immediately, others would suddenly feel like they were in over their head because they have no idea how much a set of drawings cost to produce. ...but that is not a bad thing. it may actually make them more willing to pay for it because they begin to understand the complexity, even if they can't understand the process of either.

[thinice]

I normally find it easier to throw the large number straightaway. Just do it with a big smile on your face, as if it is you are offering unbelievably great bargain.

 

That would scare away those with the "isn't it nice if we can have this for our next review.." mentality- which is precisely the point.

 

For serious developers, their marketing budget at a minimum is 2% of selling price of development. Just do your maths. If your "big number" scares them, there is something wrong somewhere.

[Brian Smith]

Sukardi,

I have to strongly disagree with your approach. I've tried it on numerous occassions and it has rarely worked well, smile or no smile. I've found that no matter how much money developers have, they can be just as thrifty about their money as anyone else, and in some cases is why they have money.

There's a reason why good sales people don't spout off a big number before they build the trust of the potential buyer and explain enough about the product before the person has a chance to faint from the price. Whether it's a car salesman or someone trying to sell a time share, holding off on pricing until the right moment is critical to not losing a potential buyer - especially in a room full of interested people who know nothing about the services and why it costs so much.

[ktm07]

Brian,

 

This pricing strategy seems pretty convoluted to me! I am not sure what the amount spent on a set on contract documents has to do with the time and effort spent on a rendering project - they are entirely different things.

 

We have found that the most straight forward way to address the issue of pricing is to break it down in three ways: the price to build the model, the price to set up and render each of the static views and then the cost of the animation. Typically we prefer the animation to be priced by the minutes because this is how our clients prefer to handle it. This is also the pricing strategy that I prefer the viz firms that work with us use. We are not afraid of the big numbers and neither are our clients; better to know upfront than be surprised in the end.

 

Tom

[Crazy Homeless Guy]

i don't think the pricing strategy is bad. a comlpex set of drawings for a complex building will take awhile to produce, and cost more than a set of drawings for a simple building. the same can be said for visualization and animation.

[Iain Denby]

If you can show a typical small job and a typical large job with their respective prices, your potential clients go away without any uncertanty.

[Brian Smith]

I am not saying that the method is best for most situations. I am saying that when you are in a situation where you run into someone, or a group of people as was in my case, and they want to get an idea of the cost, telling them a price as a percentage of the architectural plans is something they can relate to.

 

I have, and usually use a marketing presentation where I show a dozen different projects and the price of each. I use this in closed door meetings or when the client is ready to talk business. I would never use this in a large gathering unless I could talk at length about what the client is seeing in those prices and in those renderings. And I don't carry it around everywhere I go. And I don't have it to show someone when they call on the phone.

 

It doesn't covolute it, if anything it simplifies it, very much. Telling somebody a typical rendering costs $10,000 for a, b, c, d, options, but only $5,000 for x, y, z options, unless of course you want q, r, s, in which case it's $2000 less. That's convoluted to me. This would only work when you truly have their attention and time.

[ktm07]

There are some relative similarities, but this strategy is dependent on either the architect or the developer divulging how much the architectural services are costing. It is very unlikely this is going to happen in a truthful manner. I can tell you that if a viz consultant pushed me on how much I was charging for my architectural services, I would find a new consultant, because frankly, its none of their business.

Now can you gauge based on the complexity of the drawing set? Perhaps, assuming there is a complete drawing set to work with. However, I have had projects there were very difficult to produce the CD’s on yet to little effort to render, and vice versa.

I can tell you that we (architecture firm of 300+) would never hire a viz consultant using that price structure.

 

 

Tom

[ktm07]

I am not saying that the method is best for most situations. I am saying that when you are in a situation where you run into someone, or a group of people as was in my case, and they want to get an idea of the cost, telling them a price as a percentage of the architectural plans is something they can relate to.

 

In the case of an open forum and you are showing a canned demo I would think it appropriate to simply say that this particular animation cost xx. Followed by a simple statement saying that every project is unique and you’d be happy to price any project that they might have. At least, that’s how I would (and do) handle it.

 

Tom

[William Alexander]

I am not saying that the method is best for most situations. I am saying that when you are in a situation where you run into someone, or a group of people as was in my case, and they want to get an idea of the cost, telling them a price as a percentage of the architectural plans is something they can relate to.

 

I have, and usually use a marketing presentation where I show a dozen different projects and the price of each. I use this in closed door meetings or when the client is ready to talk business. I would never use this in a large gathering unless I could talk at length about what the client is seeing in those prices and in those renderings. And I don't carry it around everywhere I go. And I don't have it to show someone when they call on the phone.

 

It doesn't covolute it, if anything it simplifies it, very much. Telling somebody a typical rendering costs $10,000 for a, b, c, d, options, but only $5,000 for x, y, z options, unless of course you want q, r, s, in which case it's $2000 less. That's convoluted to me. This would only work when you truly have their attention and time.

 

 

A small group of professional developers-SALESMAN It's a feeding fenzy of salesman strying to work you the salesman.

 

1. Work them back. You need to grab thier attention & respect aka get a sit down with one or more of them.

2. First rule of sales...qualify your customers, your thinking about letting a pricing structure-commodity do it for you. NO offense, but thats a Home Depot approach as opposed to the top end interior design studios. Yes it may help as Ernest said to have such a structure, but the real solution here is to find the way to pick the best 3-5 out of twenty and work them for a sit down meeting.

3. If you get the best reposnes from a sit down meeting-that's what you need to do

4. Get a sit down meeting at all costs from at least one potential client LOL

 

There is much more, as I'm sure you know, than price and rendering cool pictures/animations, doing business in this industry. Someone needs to 'sell' it and in this case it's the hard sell. The situation you where in may not be a good one for you or anyone else for that matter. If all you can give is price snippets because your being over whelmed with questions trying to get everyone information....your selling your services to some of the best salesman in the area-dangerous territory swimming with the sharks. Wouldn't want to get branded as a gold fish.

 

My thoughts, be what they may

WDA

[mahorela]

I can tell you that we (architecture firm of 300+) would never hire a viz consultant using that price structure.

 

I don't think Brian is saying that he uses this structure to finalise his pricing, he's just saying that when someone asks for a nominal figure, outside of a private meeting (as in the case Brian explained) this is a good way to reply. Obviously he's not going to request the pricing of the drawings so as to formulate his quote, this wouldn't accurately reflect the contract anyway. It is merely a preliminary means of giving potential clients an example of what the Viz work will cost. The 'ball park figure' that they all seem to want.

[Brian Smith]

That's exactly what I mean

[William Alexander]

Yes, there's nothing wrong with ball park figures....just don't let it rest at that, qualify them- find out more about thier needs, how that compares to what they use know..... get a number and set up a time to contact them outside of this meeting. Work every angle, they took the time to ask you-you take some time to ask back, maybe even before quoting.

 

Sorry if I miss understood....If you can't quote a price on the spot based on some potential information or that slows you to making more contacts you need to do something. Personally I'd use the 'hectic' frenzy to my advantage and start taking names, numbers and arranging some kind of contact outside of the current situation. Saying "hey we are all busy, you have important things to attend to yet today I'm sure, could we....." If they choose to wait for a little while, until things slow down-could be something good on the line, if not you have a second chance. If they totally decline and just want a price what kind of client do you thing they'd be or you'll need different bait next time.

 

I hope that's some form of how your working that 'room'. The description lead me to believe, you believe your pricing structure was a solution to making real leads or keeping people in front of you longer to talk to them more.

Obviously I don't believe that is the 'maximum' way and hopefully I just totally misunderstood.

[thinice]

Let me clarify a bit on my approach.

 

Basically, when you are showing people your demo reel, you are basically showing them few years worth of your best work. When people ask, " how much does it worth to do that?", I don't think there is any need to be apologetic about it.

 

Of course, I always follow with, " But we do various type of jobs, some as low as ....".

 

In earlier days, I have tried to put off the big number until much later and found out that clients always come back with, "We want something like your demo reel, but we only want to spend XXX".

 

Yeah, I got the job but mostly ended up with very little, if any profit.

 

You got to remember that these people are not shopping for private luxuries. They are professionals doing their job and judging by the money they make, they must be pretty good at it. As WDA said, try not to be branded as gold fish in a pool of sharks.

 

If you ask lawyers or management consultants how much they charge, they are never shy of the big number.

 

Of course, it goes without saying that you must look and act professional to start with.

[Brian Smith]

All true. One could create a semester long college course on pricing!

[ktm07]

I don't think Brian is saying that he uses this structure to finalise his pricing, he's just saying that when someone asks for a nominal figure, outside of a private meeting (as in the case Brian explained) this is a good way to reply. Obviously he's not going to request the pricing of the drawings so as to formulate his quote, this wouldn't accurately reflect the contract anyway. It is merely a preliminary means of giving potential clients an example of what the Viz work will cost. The 'ball park figure' that they all seem to want.

 

I understood what he meant and was doing. However, this approach requires an intimate understanding of an architects pricing strategy which is unlikely to be shared.

 

But more to the point, price is seldom, if ever, the deciding factor for us and most of the developers that we work with. Rather quality and timely delivery are of greater concern, especially in this market.

 

Tom

[ktm07]

All true. One could create a semester long college course on pricing!

 

Very true!

[CA95F]

To be honest, in about a 30% of the jobs done, there s little or no profit. It is just that you do it so you don't lose a customer in hope for a bigger job.

Keep in mind that there are "offices" using pirated software (quite a commodity here in Greece), that have 0 operating cost and offers prices that are impossible to match. There also some offices doing work through the internet and offering a minimum price of 199 pounds (I saw one yesterday, I just don't remember it now).

I believe most of you have read the interview by Alex Konst who works in Ucraine for $300 a month. Why not send him some CAD files and have him do wonders for $500 ???

The visualization industry is just starting to unfold its potential. Like the game industry, it will stop being a craft of the few elite and become ovepopulated by many professionals in quite a short time. I believe that todays pricing will be obsolete very soon and prices will have dropped below 50% or more in a couple of years.

With broadband internet going global and Eastern European pricing being just a fraction of what Americans & W.Europeans charge, it is only a matter of time for huge price drops to happen, since it's very easy to collaborate with a russian firm through the wire. Would the potential payer sacrifice 5% of quality for a 70% discount? I bet he would and no one would blame him.

To be quite honest, I am really consdering of outsourcing all of our 3D work to an eastern european firm and just concetrate on the PR part f the job.

This is the russian 3D portal, just for reference.

http://www.3dcenter.ru/gallery/