Perhaps the most often heard question from prospective clients is “What is your hourly rate?”
That question is flawed from the outset.
Somehow it seems to assume that a copywriter—or any creative professional, for that matter—is a machine that produces a constant output at constant power in a constant operating environment from the moment it is started to the moment it is switched off.
Were it so, there wouldn’t be anything wrong with the “x hours times hourly fee” budgeting formula.
But stop to think for a moment. In reality that’s not the way even you as a client actually approach the issue.
You’re buying the total cost anyway
Whatever the hourly rate, you will still do the math and make your decision to hire or not hire me on the basis of the total price. Right?
So it doesn’t really matter what the hourly rate is. Let’s say you need copy for a brochure. If I quote 8 hours at €100, it works out at €800. To make things look prettier, I could of course quote 10 hours at €80, an hourly rate 20% lower (hooray!) with a difference in the number of hours so negligible you won’t contest it. So what’s the point? You’re still happy to pay €800 if you think the total is reasonable.
If I give you a lump-sum estimate of €800, your decision-making won’t change. You will ask yourself exactly the same question “Is this worth €800 to me?” and then push either the Continue or the Cancel button on the project.
The siren song of low hourly rates
Using hourly rates for comparing competing providers will lead you astray. If you pitch my €100 per hour against another candidate’s announced hourly rate of €80, it doesn’t really tell you anything—because providers will not offer the same number of hours for the same job. It just makes the other guy look cheaper, but won’t guarantee you a lower total cost.
In fact, opting for hourly billing means you’re creating yourself an open-ended budget, a dangerous carte blanche for your chosen provider. You run the risk of falling into the same trap as you often do with low-cost airlines. The advertised price is low, yes, but all kinds of more or less artificial extras continuously push the price up. Background research suddenly takes a few hours more than estimated here, an approval round is charged extra there. The meter keeps running even when the provider is dragging his feet.
At the point where you start to feel overcharged, two things happen:
- The project grinds to a halt while you discuss the fees
- A huge element of mistrust is inserted into the working relationship
When we know that trust is by far the hardest currency in buying and selling services, it might be that neither you nor your provider will want to work with each other any longer. This may seem far-fetched to you, but it’s more than once I’ve been hired to patch things up after just this kind of situation. In all those cases, naturally, a publication deadline was already approaching fast, so I doubt the projects stayed within the original budget. The clients ended up having to deal with more stress and paying more for it. Wouldn’t make sense to me if I were the client.
When the price is fixed it stays fixed
In contrast to hourly rates, an all-inclusive, fixed fee will not change. If I’m quick, my win—but no loss for you. If I’m slow, my loss—but the price to you still won’t exceed what was agreed in the first place. Fair play, wouldn’t you say?
Accepting project-based billing, you’re doing a favour to yourself and your provider. It is useful for both to first have a talk about the project. When the job is defined in as much detail as possible, you avoid any misunderstanding and get a customised, accurate estimate that at the same time establishes a cost ceiling. (Major revisions, the introduction of new material or a change of the brief while the work is already underway are of course legitimate reasons for reopening the budget.)
Approaching the pricing of a job like this will allow both you and the provider to work to an exact project budget right from the start. You never need to discuss why a job took 14 hours instead of the estimated 8½. When the fee is agreed on, it stays that way. An excellent way to build trust between you and the provider before you have even given the green light on the assignment.
How does your organisation purchase creative services? Am I making sense? I’d love to hear your comments from the client side!