Next time you are at the zoo you might notice a 10-ton elephant tethered by a flimsy rope to a 3-foot pole.
The elephant has been trained to believe it has no choice about staying in its current position.
And so it is with the hourly rate, which marketing firms, law firms, accounting firms, business consultants — and of course all of our clients, are trained to believe is the only way to price our services.
But just as the elephant could potentially break free from the pole, we are breaking free from the hourly rate.
Although the concept isn’t new, there are only a select few innovative thinkers who have already adopted the model. There is still however, a long way to go. While it is unlikely, we hope with one big collective jerk at the rope by our industry, the hourly rate will be a legacy of a bygone era.
The hourly rate has always been a major thorn in Urban Jungle’s side.
It greatly devalues and undermines the expertise, service and quality of work we provide. More importantly, companies are not interested in paying for our time. They are more interested in paying for a result.
Their thoughts are, “If you don’t produce a result, why should we pay you?” On the other hand they also think, “If you produce results, and you produce even greater than anticipated results, why shouldn’t we pay you more?”
I once had a client jokingly ask,
“Are you thinking of ideas while in the shower and then charging us a half hour for it?”
He was half right. Of course I think of ideas in the shower. And his main concern about charging him for my shower time, was a valid concern and I completely understood.
It happens all the time in our industry and as a company we are sick and tired of defending a billing concept that we never believed in the first place. Quantifying price based on time is ludicrous. How can we put value on time? How is my time worth more than your time? How is your time worth more than their time? Yes time is money, but time is just that—time.
Dumping the hourly rate is all about reaching an agreement with clients on value.
Every project has potential measurable benefits and value. Of course, some values are easier to measure than others. To orient yourself in the discussion of what branding services are worth to you, consider the possible drivers of the value below.
Do you believe branding can increase:
Do you believe branding can reduce:
Do you believe branding can improve:
Do you believe branding can create:
You place different levels of value on each of these items, and as a consultant and expert in these areas it’s up to me to find out how much value you place on them, not how much you will pay me for an hour’s worth of work.
How much is it worth to you to elevate your company’s status to that of a brand?
To increase your visibility in niches you never thought possible? To improve your reputation and the loyalty of your customers? Or to improve the design of your products? Investing into your brand via better strategy, smarter design, and more engaging experiences will result in higher perceived value, better customers, increased profits, fewer complaints and returns, and a lower cost of stocking merchandise.
Branding is equally important (if not more-so) for your staff as it is the customers who invest in your brand.
After all, they are the ones who are delivering the experience to your customers. What would improved morale among your staff mean? A brand with an excited and motivated workforce means the managers spend less time in HR meetings and more time running the business. What is it worth to have fired-up employees instead of absences due to low morale?
In the future, we believe all marketing firms will have to quantify the benefits which are relevant to the projects they create. They must; because quantification (not time) provides the crucial context to determine the value. We are excited to finally break free of the shackles of the hourly rate and we are confident our clients will too.