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My agency just hit 40% profit margin for the first time
We've been running at around 25% for years, so seeing that number on our Q3 report was a shock. I think the big change was switching to value-based pricing on our web design projects instead of hourly billing. We also cut two software tools that weren't being used much, saving about $400 a month. Has anyone else made a pricing shift that led to a big jump in profits?
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casey_campbell6mo ago
Yeah, switching to project-based pricing was the single best move we made. We stopped selling hours and started selling the end result, like a website that converts at a certain rate. Clients stopped nickel-and-diming every change, and our average project value went up by about 60% because we were finally getting paid for our expertise, not our time.
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harperc796mo ago
Sounds good but scope creep is still a real problem. You can sell the end result but clients always want just one more thing. Gotta have a real tight contract or the project price doesn't matter.
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the_eric4mo ago
Yeah, @harperc79, I used to think the same way but this totally changed my mind.
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