“What’s your hourly rate?” should be an easy question to answer. However, I haven’t used an hourly rate since…I don’t know when. A long time ago. In a galaxy far, far away.
That isn’t to say I don’t have an hourly rate; I do. It took some time to figure out, and it ranges depending on factors like benefits and cost-benefit analysis, but I do have one. I simply prefer not to use it.
The reason is simple: an hourly rate diminishes value. I’m charging for work alone and maybe a glimmer of expertise. Project rates are different. They’re based almost entirely on experience, expertise, and value to the customer. They of course consider things like time and effort—and I’ve learned the hard way to account for them—but the rates aren’t largely contingent on them.
Plus, project rates are easier to manage. If the work stated in the contract goes wildly out of scope, I have room to maneuver. I don’t with an hourly rate. I’m stuck working until who knows when. Maybe when the cows come home. If they don’t…guess who has to go looking for them and bring them back?
Project rates free me from the desk, too. With hourly rates, I have to work x-amount of hours to earn x-amount of money. It’s not a good work style for a person who prefers to get things done and continue onto the next thing. It’s confining and, at times, depressing.
Projects make more sense. I have more control over time, effort, and output. I may put in ten-hour days when I’m in the middle of a project, but that’s my choice. I have control, and that’s important.
In some galaxy far, far away, I have an hourly rate. In this one, I try to use the project “force.” It suits me, and clients, better.
I also encourage a project rate, but I quote my hourly rate without hesitation. It’s high – probably three times what others charge. By knowing my hourly rate my clients understand the value I provide and are careful not to waste time, which will ultimately cost them.
I typically offer my clients a retainer with a discounted rate along with projects. The helps them by ensuring my availability and letting them ask for side projects and consulting without worry. The minimum retainer that I’ll accept is for twenty hours a month, for a minimum of three months.
My hourly rate does one other thing that I think is important: it discourages those who are not serious about the work or who simply don’t understand the costs of marketing and good content.
Quoting project rates does make me more efficient – but it’s just one of the tools that I use to work with clients and develop close, long-lasting, and profitable relationships.
cptnrandy A smart strategy. Thank you for sharing your thoughts. I agree–project rates are just one of the tools. You use the one that’s right for the job and the client.