Freelance pricing packages: how to set up tiers and optional extras (and how many options to offer)

Instead of one price, many freelancers offer a few set packages, or one core package with extras the client can add. Here's how to build packages from your own services and hours, what research on how people choose between options does and doesn't show, and how to put the options on a quote so the client can pick one in writing.

General information. The method, the steps, the example, the checklist and the wording to copy are ours (general practice). There's no official rule for how to package freelance services. The research quoted below is about consumers choosing products in studies, not freelance clients; see Where the sources differ.

The short answer

1. Start from one package you'd be glad to sell: the scope most of your clients need, with its deliverables, review rounds and timeline.
2. Price it from your hours, the same way as any fixed price: our estimate guide and fixed price vs hourly guide.
3. Decide on tiers or extras. Two or three packages that differ in clear ways, or one core package with a short list of optional extras.
4. Make every option real. Each package should be one you'd happily deliver at that price. Don't pad the list with an option you hope nobody picks.
5. Keep the list short and say plainly who each option is for and what's not included.
6. Put it on a quote with a valid-until date, and have the client confirm the option (and any extras) in writing.

On this page

• 1. Packages, tiers and optional extras
• 2. What research on choices says
• 3. How many options to offer
• 4. Build the packages from your services
• 5. A made-up example
• 6. One core package with optional extras
• 7. Keep every option honest
• 8. Putting packages on a quote
• 9. A package menu and emails to copy
• 10. Checklist

1. Packages, tiers and optional extras

• A package is a fixed scope at a fixed price: what's delivered, how many review rounds, roughly how long it takes, what's not included.
• Tiers are two or three packages for the same service, each with more in it than the one before. People sometimes call this good, better, best.
• Optional extras (add-ons) are separate items the client can add to a package, each with its own price.

Packages suit work you do often in a similar shape. For one-off or unclear work, a quote for that job (fixed or hourly) is usually simpler; our fixed price vs hourly guide covers that choice.

2. What research on choices says

Two ideas from consumer research come up whenever tiered pricing is discussed. Here's what the original papers say, and where later work disagrees.

The decoy (attraction) effect

Huber and colleagues (1982) defined it this way: "An asymmetrically dominated alternative is dominated by one item in the set but not by another." "Adding such an alternative to a choice set can increase the probability of choosing the item that dominates it." In their words, "The effect of the dominated alternative is to draw attention to a more profitable item rather than to generate direct sales." (Huber et al., 1982).

But a later paper by Frederick and colleagues (2014) argues that "this phenomenon may be restricted to stylized product representations in which every product dimension is represented by a number". In the abstract, the authors add that "they question the practical significance of the effect." (Frederick et al., 2014).

The middle option (compromise effect)

Simonson (1989) found that "brands tend to gain share when they become compromise alternatives in a choice set", and that "attraction and compromise effects tend to be stronger among subjects who expect to justify their decisions to others" (abstract, Simonson, 1989).

Too many choices (choice overload)

In a well-known set of studies, Iyengar and Lepper (2000) found that "people are more likely to purchase gourmet jams or chocolates or to undertake optional class essay assignments when offered a limited array of 6 choices rather than a more extensive array of 24 or 30 choices." (Iyengar and Lepper, 2000).

Later reviews pulled many such studies together and disagree. A meta-analysis by Scheibehenne and colleagues (2010) reported: "we found a mean effect size of virtually zero but considerable variance between studies." It also found that "having decision makers with well-defined preferences led to a more-is-better effect." (Scheibehenne et al., 2010). A later meta-analysis by Chernev and colleagues (2015) says that "we identify four key factors—choice set complexity, decision task difficulty, preference uncertainty, and decision goal—that moderate the impact of assortment size on choice overload." It concludes that "when moderating variables are taken into account the overall effect of assortment size on choice overload is significant" (Chernev et al., 2015).

Practical reading (ours): don't count on a clever price list to sell for you. The safer lessons are to keep the options few and easy to compare, make each one a fair offer, and say plainly who each one is for, so a client who has to explain the choice to someone else can.

3. How many options to offer

• One package plus extras when most clients need the same core and differ only in a few add-ons.
• Two or three packages when clients really differ (a small business and a larger one, a quick job and a full one). Many freelancers stop at three; that's common practice, not a research finding.
• More than three is usually a sign that some options should become extras instead.
• Clients who already know what they want may not need packages at all. Quote what they asked for; the research above suggests that people with clear preferences cope fine with more choice.

4. Build the packages from your services

1. List your services with a unit for each (hour, day, page, item, project). That list is the raw material for every package.
2. Write the middle package first: the scope you'd recommend to most clients. If you have a statement of work from a typical job, start from its deliverables.
3. Estimate its hours, task by task, from your own log (how to estimate project time), and price it (turning hours into a fixed price, hourly rate calculator).
4. Make the smaller and larger packages by changing a few things, not everything. The table below lists what usually changes (ours).
5. Estimate and price each package separately. Don't derive prices by a fixed ratio from the middle one; work out each from its own hours.

5. A made-up example

A freelance copywriter's website packages, scope only. The packages and names are invented to show the layout; we've left prices out on purpose, because yours come from your own hours and rate.

Optional extras with any package: an extra page; an extra review round; faster delivery (agreed dates); email sequence for the launch.

Each package differs in a few clear ways, each one is a job the copywriter would be happy to do, and anything else becomes an extra or a separate quote.

6. One core package with optional extras

Often simpler than tiers (ours):

• Quote the core package as the total.
• List the extras underneath, each with its own price, clearly marked as not included in the total.
• Ask the client to name the extras they want when they accept, or to write none.
• Keep the list short: the few extras clients actually ask for, not everything you could do.

Extras the client asks for after the work has started are a change, not an extra on the original quote; our scope creep guide has a change order to copy.

7. Keep every option honest

• No filler options. Each package should be one you'd deliver at that price, and good value for someone.
• Say what's not included in each package, so the cheaper one doesn't hide surprises.
• Recommend what fits the client, with a reason, even if it's the smaller package.
• Keep the same price for the same package for everyone in the same situation, and change it on purpose (how to raise your rates), not client by client.

8. Putting packages on a quote

• Tiers: one quote per package, each with the same valid-until date, or a proposal that describes the options with a quote attached for each. The client picks one.
• Core and extras: one quote, with the extras listed outside the total.
• Either way, give a valid-until date, any deposit, and how to accept. What else goes on a quote is in how to write a freelance quote; the free quote and estimate generator makes one in your browser.
• Get the choice in writing: which package, which extras. That's what you'll invoice, and what you'll point to if the scope moves later.

For bigger jobs, a proposal can explain the options and why you recommend one.

9. A package menu and emails to copy

Replace everything in [brackets]. These are ours.

Package menu

[Your service]: options

[Package one name]: [price]
For: [who it suits, in one line]
Includes: [deliverables], [review rounds], [timeline], [support after handover]

[Package two name]: [price]
For: [who it suits]
Includes: everything in [package one name], plus [what's added]

[Package three name]: [price]
For: [who it suits]
Includes: everything in [package two name], plus [what's added]

Optional extras (with any package):
[extra]: [price per item / hour / day]
[extra]: [price]

Not included in any package: [what's out of scope]
Prices valid until [date]. [Taxes, if you charge them.]

Sending the options to a client

Subject: [project] — options and prices

Hi [name],

Thanks for the call about [project]. Here are [two / three] ways we could do it, depending on [what varies: how many pages / how much support / how fast you need it].

— [Package one name]: [one line on what's in it]. [price]
— [Package two name]: [one line]. [price]
— [Package three name]: [one line]. [price]

From what you told me about [their goal or constraint], I'd suggest [package name], because [one honest reason]. The others are there if [budget / timing / scope] matters more.

Each option is a separate quote, attached, valid until [date]. Any of them can have the optional extras listed at the end.

Reply with the option you'd like (and any extras), or ask me anything.

Thanks,
[your name]

Quote lines for a core package with extras

This quote is for [package name]: [what it includes].
Optional extras are listed separately below and are not in the total. Tell me which ones you'd like, or write "none" when you accept.
Anything not listed here or in the optional extras is out of scope; I'll quote it separately if you need it.

10. Checklist

• Services listed, each with a unit.
• One core or middle package you'd recommend to most clients.
• Each package estimated from your own hours and priced on its own.
• Two or three packages that differ in a few clear ways, or one package with a short list of extras.
• Every option one you'd be glad to deliver; no filler.
• Who each option is for, and what's not included, written down.
• Quote with a valid-until date and how to accept; extras outside the total.
• The client's choice of package and extras confirmed in writing.

Free tools and kits

• Free quote and estimate generator: make a quote for a package in your browser.
• Freelance hourly rate calculator: the rate behind each package's price.
• Our paid Quote & Proposal Kit by Small Rows (US$12, one-time) keeps your services on one price list (each with a unit such as hour, day, item or project) and builds a quote from it, with up to five optional extras listed under the quote and kept out of the total. The proposal's acceptance block has a line for the extras the client takes, and the Quote Log is where you record each quote you send and its status. It doesn't lay out three packages side by side on one page: send one quote per package, or quote the core package and list the step-ups as optional extras.
• Our paid Freelance Billing Kit by Small Rows (US$12, one-time) invoices the work once the client has agreed the package.
• All three kits together: the All-Kits Bundle by Small Rows (US$24, one-time).

Where the sources differ

• Who was studied. The studies quoted here are about consumers choosing products such as jams, chocolates or brands, in shops and labs, and students choosing essay topics. We didn't find research on freelance clients choosing service packages, so the steps on this page are our reading, not a finding.
• The decoy effect. Huber and colleagues (1982) showed it in controlled choice studies. Frederick and colleagues (2014) argue it may be limited to products described only by numbers, that it doesn't typically appear when people experience the product or see one of its features (for example in a photo), and question how much it matters in practice.
• Choice overload. Scheibehenne and colleagues (2010) found an average effect of about zero across studies; Chernev and colleagues (2015) found a significant effect once the conditions they identified were taken into account. Both find that results depend on the conditions of the study.
• How we read the papers. The Huber and colleagues quotes were typed by hand from a scanned copy of the paper, and for Simonson (1989) we quote only the abstract, because the full text couldn't be fetched from our side. The Frederick and Chernev quotes come from the published abstracts.
• What we did not check: research on business-to-business buying; price-anchoring studies; whether any particular number of packages or price gap works better for freelancers.

Related

• Fixed price vs hourly: how to price a freelance project
• How to estimate how long a freelance project will take
• How to write a freelance quote or estimate
• How to write a freelance proposal
• How to raise your freelance rates
• Scope creep and change requests
• How to write a freelance statement of work
• Freelance hourly rate calculator

Sources

• Huber, Payne, Puto (1982). Adding Asymmetrically Dominated Alternatives: Violations of Regularity and the Similarity Hypothesis. Journal of Consumer Research, 9(1), 90–98. doi:10.1086/208899
• Simonson (1989). Choice Based on Reasons: The Case of Attraction and Compromise Effects. Journal of Consumer Research, 16(2), 158–174. doi:10.1086/209205
• Frederick, Lee, Baskin (2014). The Limits of Attraction. Journal of Marketing Research, 51(4), 487–507. doi:10.1509/jmr.12.0061
• Iyengar, Lepper (2000). When choice is demotivating: Can one desire too much of a good thing?. Journal of Personality and Social Psychology, 79(6), 995–1006. doi:10.1037/0022-3514.79.6.995
• Scheibehenne, Greifeneder, Todd (2010). Can There Ever Be Too Many Options? A Meta-Analytic Review of Choice Overload. Journal of Consumer Research, 37(3), 409–425. doi:10.1086/651235
• Chernev, Böckenholt, Goodman (2015). Choice overload: A conceptual review and meta‐analysis. Journal of Consumer Psychology, 25(2), 333–358. doi:10.1016/j.jcps.2014.08.002

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