Web Business Weekly #51

There are a lot of people that hate on hourly rates. I hear a lot of smart people that talk about never quoting hourly rates.
In many cases it’s smart business advice. The concept of value based pricing is nothing new – which essentially means charging based on perceived value to your client.
As an example, if you spend 10 hours on something (let’s say Facebook ads, or SEO) and charge $100 an hour for a total of $1000.
If that effort brought your client $200k in sales, you could have charged a lot more as you brought massive value for your client.
Likewise if you made $2 in sales, it seems like overcharging.
So value based pricing encourages you to perform, but at the same time allows you to make a lot more money.
But I also think people are too quick to say “never charge an hourly rate”.
There are times when it’s almost impossible to calculate the value of something. Especially ad-hoc development, website changes or anything open-ended.
There are exceptions to every rule.
Use value pricing most of the time, but don’t worry about charging hourly when it makes sense. As long as hourly isn’t your default.

James Rose

James is the co-founder of Content Snare and Aktura Technology. Once a web designer, his new priority is to help web designers and developers regain their lives, work less and get better clients.

He does this by writing helpful posts, building software and working with web designers to deliver the complex web development that they don't normally handle.

Get James' agency toolkit to discover the best tools and resources for creative and digital agencies

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