Storified by Travis Northcutt · Mon, Jul 08 2013 20:28:44
The idea that value based pricing is wholly different than hourly fee is wrong. Supply & demand (value!) sways hourly consulting rate.
@jakemgold can you expand on this thought?
@tnorthcutt don't know if I can expand on anything on Twitter! :-)
@jakemgold fair enough ;)
.@tnorthcutt basically: hourly rates are long way around to value pricing. e.g. higher value projects pick more premium labor
@jakemgold interesting perspective. Have you read breakingthetimebarrier.freshbooks.com ? I know you don’t need it, but well-presented counter argument.
@tnorthcutt notice the subheading? "Learn how to charge what you're really worth" <- that's (basically) hourly fee … with spin.
@jakemgold maybe so. Some of it may come down to client palatability of $x,xxx/hour rates.
@tnorthcutt real world, *durable* service based models where you really do 4 hours for $4,000 don't survive (in *most* cases)
@jakemgold I don’t have personal contradictory experience, but I suspect there may be cases where that isn’t true. (cont)
@jakemgold e.g. if you’re providing some service on a recurring basis that saves/makes a client $xx,xxx then $x,xxx is a good deal for them
@jakemgold and that service could easily take single digit hours.
@tnorthcutt yea. until I come in and make a nice profit at $x,xxx divided by two. :-)
@jakemgold yes, unless I’ve cultivated that relationship for a year and earned their trust ;-).
@tnorthcutt I take your point, and there are certainly edge cases. :-)
@jakemgold yeah. Also, hours need not be publicized to the client. That’s some of the mindset shift, I think: communicate value (cont)
@jakemgold …to the client, not number of hours.
