I've been meaning to write an entry about this topic for some time now. But as I researched and put my own thoughts down, I came across yet another good blog post from Jess Sand on this very topic. She goes into some depth, so be sure to read the full entry. In the meantime (or if you're in a hurry), here are some highlights.
"It's not uncommon to get questions like why so expensive; it's just a five-page website? and It can't possibly take that long to design a logo, can it? and even the old But there's no way to know if it's even going to work or not, so why should I have to pay premium prices?
"The problem with this line of questioning is not that the client wants to know why they're paying what they're paying. We all have a right to know what we're spending our money on. The real problem lies in what it reveals: the client who asks these questions has no idea what they are actually purchasing."
This is 100% accurate. The nice folks I've talked to in past years who didn't become 420 Creative clients tended to only see the sticker price and didn't look at the details and amount of work that actually goes into a web design or print design project.
"When you buy a car, you expect to know the gas mileage, the type of engine, the horsepower, etc. Most of these details are disclosed outright by the manufacturer. In the design world, these details are the equivalent to deliverables..."
"But when you buy a car, you're also paying for the manufacturer's name and reputation. With name and reputation come implied skills of craftsmanship and knowledge (advanced manufacturing processes, quality parts and materials, assembly line production, engineering, etc). Design buying is no different..."
A great metaphor (as Jess points out, designers love it - I do). But just like when someone is shopping for a car, there are those who really don't care and just want a vehicle to take them from point A to point B. If that's you, that's fine. Just don't expect to hire the design agency that does more than just create a decent picture. If you want all the features and options, well then you better be willing to spend more.
"...your designer (ideally) brings a lot to the table. You're not just buying a pretty picture—you're buying a set of skills and experience that directly impacts the success of the project itself (whether or not it's a smooth, trouble-free, enjoyable process), as well as the success of your business (whether or not the designed piece actually accomplishes anything)."
In the end, the point is that designers aren't just artists with computers. They're not just experts at Photoshop. There's a lot more to design than people realize. But once you do realize these things, then you'll be way ahead of the game and ready to really make a good decision about who to hire.