Season 7 | Ep 74 | Agency Billing Models - Hourly vs Fixed Priced

What is the best pricing structure for your agency? Are you just at the start of your journey, or do you have a better understanding of your client and the deliverables? Each of the pricing models can be beneficial to your agency at different stages of your journey.  

In this episode of The Agency Blueprint, I discuss the two most used pricing models: hourly and fixed pricing. I explain the pros and cons of each and at which stage of your agency you should consider each.  

Listen in to learn which one between the hourly rate model and fixed pricing model suits your agency! 

Key Questions:   

• What do you have to consider to ensure you’re super clear on how the hourly rate looks like for you and your team? (4:18) 
• What is the benefit for your team, agency, and you to build expertise and knowledge and do the work better? (9:21)  
• Are you further along in your journey as an agency to start using the fixed pricing model? (11:49) 

What You’ll Discover: 

• The hourly model – billing the client for every hour of work you’re producing (1:14) 
• The rate sheet – considering and billing based on the cost for every level of seniority (2:07) 
• The blended rate – a simple way where you understand everything and what you can go for (2:34) 
• The anxiety that comes with both the rate sheet and blended rate for clients (3:00) 
• Things to consider to ensure you’re super clear on how the hourly rate looks like for you (4:18) 
• The pros of the hourly rate in theory and practicality (5:20) 
• The cons of the hourly rate model – difficult to scale and creates anxiety for clients (7:00) 
• The fixed pricing model – used by agencies further along in their journey (11:40) 
• Why you have to set client expectations very well with the fixed pricing model [12:56] 
• The pros of the fixed pricing model – faster turnaround time and offers client value (14:46) 
• The cons of the fixed pricing model – you can lose money as an agency (15:55)

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