1. Pricing unpredictability. The client feels that they might not be able to control what the final price will be.

2. Price bias towards agency. The client might feel that the agency won’t be as fast or efficient as they would be, than if there was no time value benefit to them.

3. Perception of value. Your contact themselves, probably doesn’t make near the hourly rate you are charging, and therefore feels the pricing is too high; especially if they are contributing to the project ideas.

4. Over budget possibilities. Your contact has to manage the project a little more carefully and closely. If not, your contact is risking her job if billing gets out of control.

The problem with fixed pricing, is that it can enable the client to take advantage. Some clients will make endless changes and reworks, and the project can be significantly delayed. The solution for this is having a very clear, signed agreement that spells out how many changes can be done. I recommend writing a solid contract that considers all potential problems, and then submitting it to an attorney to strengthen and finalize it.

A different option I like to do is called a “convertible clause”. What I do is price them a low fixed rate that includes 1 or two concepts or versions, and 1 set of changes for the concept they approve. If they need more and have more demanding needs, then it converts to an hourly rate from there. This is fair to reasonable clients, and makes more demanding clients pay for their additional time usage. This also relieves stress, and gives the control to the client. Most importantly, this gives you a better chance to win more bids and have the perception of the fairest price. Always give them the complete details on both the quote, and the contract- and never rely on anything verbally.

Top flight consulting firms sell their services both by the hour and by the project. And the higher hourly rates are justified by the level of the expertise they bring to the table.

The writers I use are top flight and their hourly rates are high. We usually agree on a flat rate. But ultimately, that rate is based on an hourly rate. The bigger the job, the more they get paid.

I am both a client and a provider of expertise. So when I bring a project to a creative team, the only way I make money is to buy their services wholesale. The creative people realize that they have zero sales cost when going through me. I also manage the client and the billings. So they love this arrangement.

This works well in my situation and has for nearly 17 years.

There are a few writers (very few) who get all the work they can handle. But that often has more to do with how effective they are at selling their expertise rather than their higher level of creative talent.

As you know, a high rate does not necessarily equate or guarantee excellent quality. So I look for talented AND hungry creative people as partners.

It’s like the old joke about a lady who hires a handyman to fix her squeaky floor. The handyman walks into the house, takes out his hammer, drives a nail into the floor, and instantly eliminates the squeak. The woman balks at the $100 bill. “All you did is pound a nail into the floor.” The handyman says, “It’s $1 for hammering the nail and $99 for knowing where to hammer it.”

As a direct marketing consultant, I know that consultants — and copywriters — make far more money on a flat cost per project than an hourly rate. And the less I pay for subcontract work, the more I make.

Paying creative teams by the hour allows me to question why that direct mail package costs $5,000 if the rate is (for example) $75 per hour. That translates into nearly 67 hours! You and I both know that it did not take a week and a half to write that package. Especially when I write the creative brief with the benefits, competitive overview, product facts and so forth.

If your rate is $100 per hour, then 50 hours is still excessive in most cases. If the rate is $200/hr, then I will probably seek out another writer.

I charge the client a flat rate. Paying creative suppliers based on time works best for me. And paying for 50% of the project in advance also helps me to negotiate better rates.