Yes, but what happens when you start charging $300+ an hour? You start losing bids.
For example, take the point I mentioned about the fact that most projects go over the estimates.
If you are charging a lot per hour and the project goes over - your client will be on your back like a rabid wolverine. Or, they just won't work with you again.
The shift is instead of charging for time and labour, you charge based on the value that the client receives.
This is a total paradigm shift. It allows you to focus on drilling into why the customer wants what they want (the root reason) and then charge for that.
This almost always means you can charge way more for the project in general, because your price isn't tied to time but to business outcomes.
For example, let's say I'm really good at helping businesses drive more sales because of skills XYZ. Specifically, I guarantee at least a 20% increase in sales per year.
Let's say it takes me 3 days worth of work to cause a 20% increase in sales by changing conversion rates, etc.
For a company making 5 million in revenue that year, that's $1,000,000 extra that I brought in. If I charge 10% of that for my project fees, then I've made $100,000.
What if I charged per hour based on the same gains? I would have to charge $100,000 / (8hrs per day * 3 days).
That's $4,167 per hour.
What sales pitch would you prefer?
"I can help you generate 20% more revenue this year ($1,000,000). I charge 10% of the gains you make. We'll do a 3-day workshop where I'll tell you exactly what needs to be fixed in your business."
Vs. the typical freelancer
"I'll work with you for 3 days at $4,167 per hour to fix your website and make it look better and make it mobile friendly. Maybe we can use Wordpress too."
Notice the difference between charging based on time and labour vs. charging based on business outcomes?
Your pitches are apples v oranges and yet, I've never heard of anyone getting sold on the first one or at least not to a crook. There are continuous revenue share models where you get % but only as long as you provide value and there are success fees for one time projects as you described. The only case similar to what you describe where you put value once and gain benefits indefinitely is the VC model, but we all know it rarely works and feeds on big wins.
Yes, but what happens when you start charging $300+ an hour? You start losing bids.
For example, take the point I mentioned about the fact that most projects go over the estimates.
If you are charging a lot per hour and the project goes over - your client will be on your back like a rabid wolverine. Or, they just won't work with you again.
The shift is instead of charging for time and labour, you charge based on the value that the client receives.
This is a total paradigm shift. It allows you to focus on drilling into why the customer wants what they want (the root reason) and then charge for that.
This almost always means you can charge way more for the project in general, because your price isn't tied to time but to business outcomes.
For example, let's say I'm really good at helping businesses drive more sales because of skills XYZ. Specifically, I guarantee at least a 20% increase in sales per year.
Let's say it takes me 3 days worth of work to cause a 20% increase in sales by changing conversion rates, etc.
For a company making 5 million in revenue that year, that's $1,000,000 extra that I brought in. If I charge 10% of that for my project fees, then I've made $100,000.
What if I charged per hour based on the same gains? I would have to charge $100,000 / (8hrs per day * 3 days).
That's $4,167 per hour.
What sales pitch would you prefer?
Vs. the typical freelancer
Notice the difference between charging based on time and labour vs. charging based on business outcomes?
Hope that helps a bit!
Your pitches are apples v oranges and yet, I've never heard of anyone getting sold on the first one or at least not to a crook. There are continuous revenue share models where you get % but only as long as you provide value and there are success fees for one time projects as you described. The only case similar to what you describe where you put value once and gain benefits indefinitely is the VC model, but we all know it rarely works and feeds on big wins.
Even lawyers bill per hour.
We'll have to to agree to disagree 😂