037 The Invisible Touch – The Problem of the Hourly Fee
The First Key: Price
The problem of the hourly fee hits me from at least two directions – as an entrepreneur who charges for his services AND as the head of my organization who must pay people to help me.
Charge What You're Worth, But NOT By The Hour
If I can finish an assignment in 20 minutes but it takes an equally well-paid person an hour, why should I not be paid what I'm really worth for solving the problem?
What's the old story about the TV repair man who charge a full service fee for banging on the side of the TV in just the right place? "But I had to know WHERE to bang on it, and you're paying for my knowledge," he reported.
I take on marketing consulting assignments the same way. I'm a guy who sees the marketing for a client at about the 40,000 foot level – where should the client go, what strategies should be employed, where do they want to end up?
I'm not the technician who designs a website (though I can), sets up the Twitter account (though I know how), or creates the Facebook page (I've done it many times). I'm the one who says WHERE to go and HOW to get there, and I am paid for that knowledge.
In my photography business, I was NEVER paid by the hour. I was paid for accomplishing goals (wedding photography and albums, family portrait sessions and wall portraits for the family to enjoy for generations to come). You don't get me for $350 an hour to do your photography, you get me for $10,000 or $15,000 to complete the whole assignment.
And I don't take on small projects any longer. If I can't get thoroughly involved with a client, learn what is going on in his/her business, strategies about what what marketing steps should be taken, then I just don't get involved. There are enough others who can do the small jobs.
And here's one other point – those who make real money are paid up front; those who make very little money are paid AFTER they work. It's just how things are.
I get paid up front.
Pay For The Completed Service, But NOT By The Hour
Though many "professionals" charge by the hour (lawyers are a prime example), the client is almost NEVER comfortable with that.
Why do I want to build in an incentive for my attorney to spend more time on my case than is needed?
And I always had that same problem with part-time staff people: I expect certain results for the dollars I spend. I'm not interested in how many hours they spend on a task, I'm ONLY interested in the results in a timely fashion.
I remember a part-time staff member telling me one time that she needed a 20% raise. I had to ask why? Was she going to provide me 20% more results? What would I get for my additional payments?
I wasn't forcing her to work for me, but neither could I afford to reward mediocre results with higher pay.
It's tougher when you're the one signing the checks – you think about compensation in a whole new way, believe me.
So… from either side of the table, hourly rates don't work very well. Avoid them when you can!
Best,
Charlie Seymour Jr
Blogging, Podcasting, Consulting
The Invisible Touch – A Marketing Blog Series By Charles Seymour Jr
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Charlie Seymour Jr is an entrepreneurial evangelist and marketing-success coach helping individuals and companies (up to $100MM) explode their success through online and direct-response marketing. He specializes in blogging, podcasting, photography, video, and Facebook applications. Visit his blog at http://bit.ly/24eYTO to learn more about his successes.
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Fallacies of Marketing
037 The Invisible Touch – The Problem of the Hourly Fee
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