Booklet

author

Michael Janda

Design

Pricing Structures Pros and Cons

design

Design

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Pricing Structures Pros & Cons
Choosing the right pricing structure for your project can mean the difference between success and failure.

  • Fixed Bid: Fixed-bid pricing is a set scope of work with a fixed price. You tell the client exactly what you are going to do and exactly what it is going to cost
  • Hourly: You and your client agree on an hourly rate. You track your hours and bill your client in regularly agreed-upon intervals (such as weekly or monthly).
  • Retainer: Retainers are also based on hours spent on a project. Typically, you give the client a discounted rate for guaranteeing you hours (usually by month).
  • Bucket of Hours: A bucket of hours is similar to a retainer, but the hours aren’t required to be used each month. For example, you could sell your client a bucket of hours at a reduced hourly rate and give them 6 months to use the hours.
  • Dedicated Resources: Slightly different from retainers, the dedicated resource structure allocates certain employees to a client for a certain period of time. Retainer structures buy hours. Dedicated resource structures buy people.
  • Partnership: Partnerships share the risk and the reward of a project. The agency performs work and their compensation comes when the work produces results for the client. These arrangement are often tied to sales and growth increase.

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