Design Business Council > Protected: Costing, pricing and profit toolkit/tools > Cost vs impact mapping

Thinking about design impact

Cost driven vs Impact driven

Most design businesses operate somewhere between cost-driven and impact-driven models.
Cost-driven: Hourly rates, economies of scale, heavy focus on production and delivery.
Impact-driven: Social, Environmental, Economic impact, economies of scope, project-based pricing, in-depth client collaboration, higher margins.

You don’t have to be a big agency to be value-driven. Even a two-person team can build a high-profit model by working deeply with clients. In any creative business, profit comes from the difference between what it costs you to deliver the work and what clients are willing to pay for it.

Why
TOOLS box Tip

There are two core ways to approach that profit margin: through cost-based pricing or impact-based pricing.

Both are valid—but they lead to very different business models

The sweet spot is mastering both

  • Use cost-based pricing to stay financially sustainable.
  • Use impact-based pricing to unlock higher margins and creative freedom.
  • Know when to use each—and build a pricing system that blends them smartly.

In any creative business profit
is the difference between
what it costs you to deliver the work
and
what clients are willing to pay for it.

Cost driven vs Impact driven

TWO PATHS TO PROFIT

PRODUCTION MODEL:

Cost-based profit

This approach focuses on your internal costs.
You calculate what it costs to deliver the work
(usually in hours and overhead), then add a margin.

How it works:

  • Cost of delivery (staff time, admin, tools) = $4,000
  • Add 20% margin
  • Add 30% profit
  • Client billed = $6,240

Characteristics:

  • Profit depends on efficiency
  • Time = money
  • Clear and easy to justify
  • Often used for production work (e.g. layout, templated design, revisions)
  • Low-risk projects with fixed scopes
  • Clients see value in dollar terms not impact

Challenges:

  • Difficult to scale without more people or hours
  • Encourages “more for less” expectations from clients
  • Competes on price, not impact
  • Increased competitor numbers also selling on price
STRATEGIC MODEL:

Impact-based profit

This approach focuses on your client’s perception of value. You price based on the business outcomes your work enables—not the time it takes to do it.

How it works:

  • Brand strategy helps client reposition, attract better customers, raise prices
  • They value the outcome not the output
  • You price your work at $15,000—even if it only costs you $6,000 to deliver.

Characteristics:

  • Profit depends on positioning and client trust
  • Time is disconnected from price
  • Driven by strategy
  • Often used for: Strategy, identity, campaigns, naming, brand positioning
  • Clients understand ROI

Challenges:

  • Requires confidence and strong communication
  • Measuring impact
  • Harder to justify without outcomes
  • Client must see you as a partner, not a supplier
  • Client has high level of design maturity
Oh no

Choose your path

There is no right and no wrong.

Many agencies start with cost-based pricing and gradually move into value-based work as they build experience, case studies, and client trust.

Both paths can be profitable but value-based pricing is scalable and gives you more room to grow without burning out or endlessly chasing hours.