Back when I started, a senior account guy told me 'always bill by the hour'

I remember my first big client back in 2018. Old school agency owner named Dave pulled me aside and said NEVER do flat fees because you'll get screwed. So I billed hourly for 2 years. Turns out I was leaving money on the table big time. Example: a $3k flat fee project took me 40 hours but with hourly I only charged $2k. Switched to value-based pricing last year and my margins jumped from 30% to 55%. Anyone else break away from the traditional billing model and see way better results?

2 comments

2 Comments

tyler_baker12d ago

Flat fee vs hourly isn't really about which one is better, it depends on the work. Value based pricing works great when you can prove ROI, like a campaign that brings in $50k in sales. But if you're doing ongoing maintenance or retainer work where the value is harder to put a number on, hourly still makes sense. Most people I know mix both depending on the project. Your $3k project at 40 hours actually sounds like you undervalued the flat fee from the start more than hourly being the problem.

fiona_lewis3712d ago

That Dave guy sounds like he was just repeating what someone told him in 1995, not exactly a pricing guru.