Know-How Exchange : Advertising/PR

I'm not convinced on the hourly rate billing. You might want to consider project-based billing. It's easier to understand (and budget) for the client.

Michael

I learned from going through the process that project quotes/fees are more accepted and preferable to clients than hourly. (I started billing hourly and after one big backlash, I discontinued it.)

You do want to accommodate for your anticipated time you'll spend on the project and any travel/out-of-pocket expenses. I always present those extra costs to the client before I do the task/spend the money so he/she knows what they're spending on top of the project fee, up-front.

Try Legal Zoom for a less costly alternative to consultant agreements that you can tailor for your needs.

What your customer is paying for is not cost of your services but what your service is worth to their business.

Billing by the hour gives you the possibility to do brief activities for any customer and to position yourself as an expert within your field. I'd go for the higher end of the scale, which might not even end at $175

Having said that, you would definitely want to do a project price for your serious customers, based on a rough guestimation on the time you will be spending on a given project. The price and the hours you put in would give the client an estimation of your hourly cost - just like a day rate would. You should keep track how much time you spend pr project pr client, not necessarily to limit your effort but to improve your questimates and for your customer activity report.

and should you provide some help to customers prior to signing a legal agreement, call it marketing , which should but might not get billed to the client !! just be aware that your time is valuable.

Mikael
B2B Marketing

I've been a marketing consultant for 17 years (https://www.recourses.com),我也发表我所有的价格,所以你可以take a look at my website and get a feel for things. Day rate is $5,000-8,000, depending on where the client is. I agree with all the others, though, that hourly is NOT the way to go. For those little requests, I have what I call the "Single Issue Advice" project, which is a straight $3,000 and is done remotely over the phone.

If you haven't read Charles Green and David Maister's works on the Trusted Advisor, I'd recommend it. Also look at anything by Alan Weiss.

I'm mostly in agreement with the others here: No hourly rates. Period. I'd go further, though, and also not provide daily rates ... for the same reason. It encourages clients to think about your services as just renting you for a specific period of time -- a bad way to establish a good relationship (for both you and the client).

You need to insist on project pricing only. If you're inefficient and take longer than you should have, the client shouldn't have to pay extra. And if you finish the project quickly it's not worth any less to the client.

Your pricing should reflect the value of what you're delivering to the client.And you need to spend the time up-front to determine if the amount of effort required on your part to deliver that result is going to be within the range of a reasonable value to your client.

Stop thinking about your TIME (hours or days) and instead think about the VALUE to the client.

Want more on this? Let me recommend you read the bookRasputin For Hire. The subtitle isAn inside look at management consulting between jobs or as a second career. There's a whole section on pricing (starting on page 93), and there's a sample proposal that can serve as a contract (pages 175-185).

The book is available through most bookstores in the US, Amazon.com orhttps://bit.ly/k3Z7m. If you use the link to order, you'll also get an instant PDF download of a free report featuring a roundtable discussion with five of the experts here on the MarketingProfs Know-How Exchange, covering their experiences as professional consultants, how they price their services, lessons they've learned, and other tips/tricks for consultants.

I'd like to jump in with a book recommendation too. I've been reading Alan Weiss' Value-based Fees - I found it very useful and concise in charging based on the value that you as a consultant bring to the client.

I answered a similar question in April for someone who was just starting out. Here is what I wrote:

在我的30年代中期fancy international marketing job at a Fortune 500, and a fancy MBA, I was passed over for a watershed promotion. Instead of becoming the boss, I got a new one. He had just a B.A., no language skills, had never been out of the U.S. His first assignment for me was to get him a passport! So I quit. I went out on my own as a consultant.

I was supremely confident! I stumbled, tripped, fell flat on my face, and crawled. Hungry and desperate, on a project I reluctantly agreed to getting my fees on the basis of "peformance/ results." No, no, I wanted that per diem, like everyone else gets. That "performance billing" was my dark little secret.

But the client was a blabbermouth. And suddenly, overnight, my story changed. My problem shifted from "zero possiblities " to "way too many." I had to learn four things.

1) The first was to say, politely, NO, to engagements where I was not going to be a good fit, not really the right person to make it happen. (Or the engagement itself was a fantasy, chasing a pot of gold at the end of the rainbow.)

2) The second was to insist on a retainer or committment fee before beginning work. That eliminates most of the "golden rainbow" contingent.

3) The third was negotiating "win/win" goals with the client, and associated milestones. As each milestone is reached, further fees are due. The final fee, the major portion of the billing, is a percentage of revenues generated or savings realizued.

4) The fourth was to have a BINDING arbitration clause in my contracts to be sure I did get paid at the end of the day. Arbitration is tricky and you can get snared in non-binding arbitration. Start with the American Arbitration Association,www.adr.org/

There are two MAJOR negatives to this approach. The first is "feast or famine." Successful outcomes are not based just on your input. Your best efforts may come to naught because of actions taken, or omitted, by the client.

The second is the difficulty in growing your business. With this approach, you are not going to have the reliable cash flow you need to hire other people. Still, I have heard of an independent "lone ranger" consultant who, after 20 years, had built his consulting up to $1,000,000 a year with straight project billing (not with Internet or product sales).

My suggestion is to go with "standard" per diem and project billing with one set of potential clients. The other contributors gave you good information about this approach. Try a variation of "peformance based billing" with another set. See what the response is, what works best for the clients -- and for you.

Make sure that the clients realize "peformance based" does not mean "cheap." In fact, you charge premium pricing at the top end of the market -- and are worth every penny. To take away the client´s risk, to demonstrate your confidence in your own abilities, you are willing to defer most of your premium fees to the back end, i.e. on a results/performance basis.

Regards, J. Hamilton