I thought flat fee pricing was a terrible idea for 2 years... finally caved

I used to think charging by the hour was the only fair way to run an agency. Every post I saw about flat fee pricing felt like someone trying to justify overcharging clients. Then I lost a $5,000 retainer last spring because the client didn't like seeing my hourly breakdown on invoices. I switched to flat fee pricing for 3 new contracts in June and my profit margin went up by 12% right away. The key was bundling deliverables into clear packages instead of guessing hours. My biggest mistake was thinking clients care about my time breakdown when they really just want predictable costs. Has anyone else found that hourly billing actually hurts your ability to grow?

2 comments

2 Comments

fiona_nelson5117d ago

The client literally told me they were tired of "watching the meter run" in their head every time they emailed me. It stung at first because I thought I was being transparent, but looking back I was just making them anxious about costs instead of confident in the value. How did you figure out the right package breakdowns for your flat fees?

val_taylor17d ago

Wait, you really lost a $5,000 retainer just because of how you broke down the hours?