Web Business Weekly #51
October 3, 2018--No Comments
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.