What do you say I take you for a day-long workshop around pricing? Not convinced? I honestly wasn't either before last week and a session on value based pricing we had for a day, with expert Tim Williams from Ignition Group.
The session was simply eye-opening on the bullet the agency world shot itself in the foot, when almost 40 years ago, it started shifting to hourly rates and timesheets. Before that, agencies were paid on commissions, didn't have timesheets, and were doing pretty well. But since then, the average agency profit margin melted, from 30% in 1960, to 10% in 2010, and agencies struggle to publish good results (we are ok, thank you for asking!).
The broad purpose of the day was to understand why, as an industry, we should shift to a value-based pricing model (or any other pricing model that would fit the situation), and never look back at hourly rates. EVER. Here is the full deck if you want to learn more about the topic.
One specific video played during the workshop just clearly showed me the incongruities of the current system, and I couldn't help but facepalm. That video is below, to be watched from 11.00 to 14.30 (or entirely if that inspires you).
Confused about how to price creative services? Are you charging hourly versus value based pricing? Is there a better way to determine what is fair to you and fair to the client?