Last week we launched a semi-new version of Project83.com, keeping the overall feel but re-working a few pages. As part of the process, we decided to be completely transparent about our pricing. Wow does it feel good to have it out there for people to see.

I've always been extremely frustrated by the fact that creative companies don't talk about pricing. Until recently, I thought everyone was merely too fearful and busy copying each other to actually consider it. While a bit of that still exists, I think the real reason is because of how bids and budgets are usually done.

For example, if a company budgets $20k for a project, they intend to spend it all. In organizations with more than a few people, the person leading the web project typically isn't the one paying for it. So it literally makes no difference to them whether they spend $10k or $20k. They just have to get the project done and might as well spend the entire budget making sure.

As a client, it's very difficult to assess the value of a creative service before it takes place. On paper, someone that charges $20k for a website looks like they provide a much higher quality service than someone that charges less. If I've already got $20k to spend, I'm going with the bid that is closest to $20k, thinking I'm getting the best possible service for my budget.

As someone that provides the service, why would I want to come in LESS than the budget if I'm only going to be penalized for it? If our bid is only $12k then the perception is that our work is not as good.

By not listing any of our prices, we can find out what the budget is for each project and come in right at that price. In the end, bidding right at the budgeted amount gives us the best shot to win the project.

We've lost at least two projects this year because our bid was too low. Since our pricing is available on the website, I can't fudge any numbers to match the budget. Even if we are a much better fit for the project, nine times out of ten we won't get it because the perceived value of our service is lower than the budget. How crazy is that?

Now that you know how the budgets work, why would a company want to show their prices? Here's why we do it:

1. Varying your prices based on a budget figure is dishonest. We choose to be honest, so we have no reason to hide our pricing.
2. A lot of organizations we work with truly appreciate upfront pricing. I believe we'll earn as many (or more) contracts as we lose by talking about money upfront. God forbid we save them thousands of dollars if our bid is lower than the budget.
3. Many of the fixed budget clients are organizations that probably aren't the best fit for us to do business with anyways. It's hard to relate with people that don't like to save money when it makes sense.
4. No one else lists prices, so we set ourselves apart right off the bat.

This is a tough decision all creative companies have to make. I know every project and client is unique, and with that comes customized pricing. However, there is no excuse for not providing general pricing guidelines in public at the very least. That's why I stand firmly on the side of transparency.

The only other company I know of that talks about pricing is Blue Flavor, so kudos to them for stepping out there as well. Is it time for you to re-consider your stance on pricing as well?