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Why We’re Significantly Raising Prices in 2022

Photo by Jp Valery on Unsplash

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Once I learned about this year’s inflation, I realized why even our best year ever felt so stressful. So we’re raising our prices – and you should, too.

I’ll admit it: I’m terrible at being motivated by money. I just don’t care for the stuff (although I care quite a lot about what it can do). So when I set rates for clients, I’m motivated far less by “How much can I get?” than I am, “Does this project make the world better/feel fun/look like a good fit?”

In so many ways, this has been a huge blessing for our business. We like our clients – a lot. And we get to work on really cool projects that make our tiny corners of the world a little bit better. On a personal note, our work also allows Mika and I to work together and support a family in beautiful, sunny California… not a small feat, given how much rent goes up every year. But there’s also a big downside to this approach.

Since I’m the one who does most of the sales calls, I’m also the one who ends up pricing projects. And since I’m motivated by working with people I like instead of charging as much as possible, I end up undercharging. Quite a bit. And this ends up adding stress that, frankly, doesn’t need to be there. When undercharging, here’s what I’m really doing:

  • Diluting our attention. Task switching carries a huge mental burden. Disrupting focus means you’re always task switching instead of getting to the “good” stuff, the flow. This why so many overworked agencies produce boring, forgettable work.
  • Limiting partnership/subcontractor budgets. Sometimes the best person for the job is outside the core team. Healthy rates make it easier to say “Of course” to bringing on the best people possible for a gig.
  • Requiring additional hours (and less productive rest). Rest creates time for your subconscious to work on problems and come up with creative solutions with seemingly no effort on your part. But if you don’t have time to rest, you’re depriving yourself (and your clients) that ability to come up with your best ideas. (Check out this video of David Lynch talking about the importance of going deep in your subsconscious to solve creative problems. It’s clearly an ad for the TM Institute, but still a great video IMO.)

At Common People, we’re not just trying to make conversion-focused websites, or memorable creative. We’re trying to think bigger. “How can we create something so good that our clients’ audiences talk about this on their own and earn word-of-mouth?”

Or, how do we combine conversion copywriting, graphic design, and tech to create truly memorable online experiences for our clients?

All with the goal of helping our clients be top-of-mind when their audiences are ready to buy… and leading their audiences through a carefully-plotted user journey to conversion.

When we’re not charging enough, we can still achieve those goals. But the reality ends up feeling a lot more stressful. Undercharging makes it all much harder. And inflation is adding an entirely new dimension to this challenge.

How This Year’s Inflation Made Things Even Harder

Thanks to inflation, prices have raised almost twice as much as normal. On average, inflation is 3%/year, but this year’s inflation is almost double, 5.4% on average but as much as 7.3% depending on where you live and what you’re trying to buy. In November alone, the inflation rate was 6.8% – the fastest spike since 1982.

In normal people talk, “Stuff costs more.” Something that cost $10 in 2020 now costs $10.60 – just applied to pretty much everything you pay for. And if you’re not earning more, it’s like you’re making less money than previous years. I highly recommend this explanation video by Janda:

After seeing this video, everything “clicked”. Why were we feeling unexpected financial stress? Because it was like we were only earning 94% of our revenue, not the full 100%. That meant a not-small amount of cash missing from our pockets.

Being data-driven, it’s important for us to constantly adapt in the face of new information. Realizing that inflation affects us, personally, counts as new data (even if it’s not new to everyone else). So like good data scientists, we’re adjusting our rates to keep a healthy step or tow ahead of inflation.

Even Though We Still Stand by Our Work in 2021, We Want to Do Better in 2022

We don’t want to settle for mediocre, and you probably don’t, either. But it’s virtually impossible to do your best work if you’re always worried about cash. So by raising our rates, we’ll be able to deliver better work without worrying about budget,

Solving the Problem, Not Filling Billable Hours

One of the things we do at Common People is use custom illlustration and motion graphics. Thanks to Mika’s illustration talents, we’re able to elevate the storytelling on our client projects. And I’ve learned how to create custom motion graphics in After Effects.

The results are rad:

Work we did for Spotio. Look at those motion graphics as it scrolls!

Another example of work created for Awesome Leader, an incredible leadership program for tech managers.

…And one more.

It’s a simple but effective way to elevate our work and bring exceptionally better results to our clients. And we want to do more of it!

The traditional agency model is to budget billable hours on a per-project basis. But at Common People, we’re lean and profitable enough that we can use project-based billing. This gives us more mental space to focus on the work instead of tracking hours. And it gives our clients the advantage of predictable, flat project budgets. But there’s another benefit our clients get with our project-based billing – especially if we adjust our rates.

By raising our rates, we’re able to spend more time per project and throw in out-of-scope extras like motion graphics. It’s a way for us to say, “We’re hired to solve a problem, and this motion graphic is the best way to solve it, so we’re going to do what the project needs instead of nickle and diming.”

A bigger project budget gives us the freedom to do the job that needs to be done, not the one we can barely afford.

Giving Each Project More Focus

When we launched Common People, our target business model was to work on one project at a time. We quickly learned that wasn’t quite feasible – at least not yet. If a project was delayed (say, due to delays in reviewing/approving work), our carefully-planned timelines would waterfall over other carefully-timed projects. So we’d still be wrapping up one project while trying to give full-time attention to a new one.

Not ideal, neither for us nor our clients.

So we pivoted to a model where we expected each project to stretch out longer, but we were able to have multiple projects at once. This worked well, but still had some issues. For example, we found that because we used milestone-based billing, revenue became very unpredictable at times. (This was most often felt where milestones for two separate projects got delayed at the same time.)

We’re all about that data, testing, and optimization. So after testing a new billing model (one that combines the “make clients feel safe” benefit of milestones with the “our business relies on predictable revenue to operate” benefit for us), we’re adjusting our rates to better reflect the amount of time each project deserves.

This will allow us to:

  • Take fewer projects at a time
  • Spend more time on each project
  • Allow for more of unbillable time to let subconscious, genius ideas to surface

How Much We’re Raising Our Rates

While we only really advertise a few core services, we have a Cheesecake Factory-sized menu of what we really do.

You may notice that some didn’t get as much of a price boost as others. This is because we adjusted our prices based on the average amount of time each item takes. We also factored in research from other service providers (like this excellent report from by Elise Dopson via Peak Freelance) and interviews. Finally, we determined how long our prices had been at a certain rate (in some cases, since 2014), and made larger adjustments as needed.

You can see how we’re adjusting our prices using this table:

2022 Price
2021 Price
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If You Want to Do Better in 2022, You Should Join Us in Raising Your Rates

We’re hoping that raising our rates will allow us to do better work for the best-fit clients. And we want you to join us in elevating your business. You’ll get all the benefits we’ve discussed above:

  • You’ll attract better clients. Clients who try to lowball service providers tend to be difficult (though this isn’t always true).
  • You’ll be able to deliver better experiences. More time means more creativity, bonuses, and delight for your own clients.
  • You’ll have more time and resources to scale. Maybe this means expanding your marketing or hiring a team. Ideally you’ll be able to use these resources to build support systems around you. This allows you to focus on your superpowers – not annoying tasks.
  • You’ll find more space in your life for real human connection. When you’re charging more, you’ll spend less time to achieve the same necessary income. And this allows you to use that newfound free time to build relationships, make memories, and serve more people.

At the end of the day, our businesses are a means to an end. They allow everyday people like us to live richer, more full lives that focus on what matters most. To us, that’s not the stuff. It’s the extra time we get with our families, friends, audiences, clients, and the other humans in our lives.

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