Jonathan Stark is a former software developer who is on a mission to rid the world of hourly billing. He is the author of Hourly Billing is Nuts, the host of Ditching Hourly and writes a daily newsletter on pricing for independent professionals.
During today’s conversation, Jonathan breaks down the idea of ditching hourly rates and why you should think about shifting more towards the less limiting avenue of value pricing. My big takeaway from today’s conversation was that if you are selling services professionally, hourly billing is probably not the way to go. It limits your upside profit potential and it can also harm relationships with longer term clients.
In this broadcast,Jonathanand I talk about:
How did Jonathan venture into this space
What are the issues with hourly billing
In what ways could hourly billing seem like a trap
How does switching from hourly billing increase efficiency
What are the benefits of selling outcomes vs selling time/hours
What are the issues of trust with buyer and seller in relation to time and cost
What is the importance of discussing desired outcomes with buyer to minimize wasted time
What are the negatives of a buyer hiring someone on a project basis
The benefits of offering a guarantee
How does value pricing work
What is the difference between value pricing and tiered pricing
How to create incremental options
What is the process when booking a client
Why does Jonathan call the meetings an “interview”
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