The Tragedy of Hourly Pricing

For years, I’ve been on record against pricing creative services by the hour. My main beef is simple: the better you get at what you do, the less time it will take and, when you price hourly, the less you will earn.

This is a tragedy and doesn’t make sense in the world of creative services, where the more you learn, the better you get— the more you should legitimately be able to charge to those who value your expertise.

If your client has a budget of $5,000 for a brochure and, because you’re a pro, you can dash it off in an afternoon, why should it matter how long it takes you? (And more to the point, why is it their business?)

All that matters is that you deliver the highest possible quality.

Don’t get me wrong

It’s not that charging by the hour is wrong. Unfortunately, it’s not as black and white as that.

We each have to choose the pricing strategy that works best. There are plenty to choose from, including time and materials, project pricing (a.k.a. fixed fees or flat fees), package and tiered pricing, retainer pricing, value-based pricing and more. You may need to use a different strategy for each client, or even a hybrid in certain situations.

I know. Charging hourly seems simple—all you have to do is track your time and multiply. But it actually causes a lot of stress.

Inherent in charging hourly is the fear that you are taking too long and your client will not pay you for the time you will have already spent when it’s all over.

That’s exactly why good clients will actually prefer that you give them a project or fixed fee — they appreciate knowing how much it will cost.

But if you do decide to price by the hour, it shouldn’t be because the client pressured you into it, or you got lazy or, worst of all, you chickened out on the money conversation.

Bottom line

If you quote an hourly rate, you should know why you are doing it and why you aren’t choosing the alternatives.

Now, all that said, there are exceptions to this rule. As I wrote in my book, The Creative Professional’s Guide to Money, there are times when pricing hourly is actually the best strategic option for everyone involved.

In fact, there are a couple of situations where you essentially have no choice but to bill by the hour. If you don’t comply, you won’t get the work.

And then there is a category of designers I think of as the “over-deliverers.” If you are one (you know who you are), then hourly pricing may be the only way to make sure you don’t lose money. Read more about that here.

Pricing is one of the most dreaded aspects of being a self-employed creative professional, but it doesn’t have to be. I break it all down, including how marketing can eliminate pricing problems, in my course for CreativeLive, Command the Fees You Deserve.

March 13, 2018

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