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How to Think about Fees and Pricing
Time is but the stream I go a-fishing in.
—Henry David Thoreau
Service providers are faced with two questions when it comes to fees and pricing:
1. What pricing structure should we use?
2. How do we maximize our fees?
How you approach your marketing and brand positioning can and will have a strong influence on how you answer each of these questions.
The Basic Landscape of Pricing Structure
Before we can begin a discussion around marketing and its relationship to your fees, we must first lay before you the variety of pricing options. Ultimately, there are three ways in which professional services firms charge clients for their services:
1. Time-based fees, such as hourly, daily, or monthly fees
2. Fixed fees
3. Contingent fees, where some or all fees are at risk until certain milestones are reached or goals are achieved
Just the mention of these three pricing constructs elicits emotional reactions and debate from service providers.
I never charge by the hour.” I'd never leave any of my fees contingent on any possible outcome.” As much as some in my industry say the billable hour is dead, it's what we use most of the time. It doesn't seem ...
