Why Hourly Billing Cheats Clients

I’m often asked about my hourly rate. When I explain I charge by the project, in most cases, the discussion moves on toward possible projects. Some people insist, that despite what I say, I do have an hourly billing rate.

I don’t.

Read on to learn why.

How Hourly Rates Hurt Clients:

  1. Hourly rates create an incentive to make jobs last a long time. The lengthier this job, the more the professional earns. By contrast, projects funding incentivizes the professional to solve your problem soon in a way that the challenge stays solved. You benefit.
  2. You know your project investment upfront. By nature, improving organizations is messy. Task almost always take longer than anyone estimates. Ever notice how people turns in reports, school projects, and their tax returns just before the deadline? In reality, people who charge by the hour rarely bill every minute. They might cut corners near the end. They decide somewhere mid-stream what’s fair. You learn of their decision when you open the bill.
  3. Hourly rates generate hesitation. You’d like to ask a question but stop. Is the answer worth fifteen minutes of billable time? With project rates, you ask without penalty and gain more value.
  4. Hourly rates make clients and professionals opponents instead of partners. Accomplishing objectives requires standing on the same side and pulling the results we want through the funnel.

So, why do I charge by the projects? Because it’s better for you. Sign up for one or more of Karen’s newsletters to learn more about how together, we can to improve your performance and profits.