Pricing Hourly: When It Makes Sense

| 3-min read Stay updated

When it comes to pricing your creative services, the process is never as black and white as you might like it to be. 

After all, you don’t work in a deli, and selling creative services is not like selling a turkey sandwich. (A pastrami sandwich at Katz’s Deli is always the same price, every single time.)

It is well known that I consider hourly pricing to be the worst possible strategy, for creative professionals especially. (Read my latest, The Tragedy of Pricing Hourly on This Design Life.)

However, there are exceptions to this rule, so I reserve the right to contradict myself, which I am about to do.

As I wrote in my book, The Creative Professional’s Guide to Money, there are times when pricing hourly is actually the best strategic option for everyone involved.

My favorite of those times is when it’s the only way to calm a chaotic client.

You’d be amazed how efficient a disorganized person can become when they see how much their chaos is costing them in hard dollars.

Likewise, charging hourly can motivate those in an organization with many approval levels but on a tight budget to move things along.

And here are 2 situations where you essentially have no choice but to charge hourly. If you don’t comply, you won’t get the work.

  1. Corporate or government work. Many government projects require proposals priced hourly for auditing purposes.
  2. Ad agencies or creative contractor agencies. Charging hourly is standard practice if you’re working through agencies, especially if you work as a freelancer on-site.

I'm adding one more scenario to this list because this year I’ve been mentoring more than one creative professional in a bit of a pickle because they can’t get the pricing right.

So for them (and maybe you too), I’m making an exception to the No Hourly Pricing Rule.

Pricing hourly may be your best option if you consistently over-deliver.

Maybe you are a perfectionist. Or you simply like to get the job done right and you don’t care how long it takes you, even if it means losing money. (Rob Harr talked about this tendency in our podcast interview about how Sparkbox decided to price web projects hourly.)

In the past, when you’ve used project fees, you always end up losing money because you practice “wishful estimating” or you just can’t bring yourself to accurately estimate what it would actually take. Or you know the client couldn’t pay what it would take for you to do it right.

But here’s the thing: you owe it to yourself to do right by yourself.

So for you, I’m making an exception to my rule and suggesting you try pricing hourly, to make sure you’re compensated for as much of your effort as possible.

With one big caveat: you must communicate clearly, and often, about it. 

If you don't let your client know how much time you are actually spending, there is bound to be a surprise at the end -- and no one likes surprises. (Sparkbox invoices weekly in order to avoid this problem.)

Need more on this?




Related Marketing Ideas

  Back to blog