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The Agency Profit Podcast

The Ultimate Guide to Understanding Agency Rates, With Marcel Petitpas

Sep 27, 2023
The podcast explores the changing landscape of agency rates and pricing models. It discusses the importance of understanding billable rates and setting target rates. The factors contributing to a drop-off in agency rates are also explored. The chapter emphasizes the need for setting appropriate rates based on team composition and compensation. Strategies to improve the average billable rate and measure agency profitability are also discussed.
27:25
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Quick takeaways

  • Understanding different types of rates is crucial for agency profitability.
  • Setting rates based on margin and efficiency gains can improve average billable rates.

Deep dives

Types of Rates in Agencies

The podcast discusses the evolution of rates in agencies. Historically, time and materials was the predominant billing model, but as agencies became more specialized, they shifted towards flat rate pricing and value-based pricing. The podcast emphasizes the importance of understanding the different types of rates, including target rates, billable rates, and average billable rates. It highlights the significance of setting rates that ensure good delivery margin, which is crucial for agency profitability.

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