Do you get paid for the expertise you bring to the table or simply for the number of hours you spend delivering it? And if your skill allows you to solve problems faster and better, should that mean earning less?

In this episode of The Agency Blueprint podcast, I’m joined by Jonathan Stark to discuss why the hourly model fundamentally misaligns incentives for agencies, consultants, and clients alike. Jonathan is the author of Hourly Billing is Nuts, host of the Ditching Hourly podcast, and writes a daily newsletter on pricing for independent professionals. He helps experts package, price, and sell outcomes rather than time, leading to higher margins, stronger client relationships, and, ultimately, saner businesses and agencies.

Listen in to learn how hourly billing often leads to strained client relationships, unpredictable budgets, and capped revenue potential for agencies. You will also learn about three powerful alternatives to hourly billing that agencies can implement to improve profitability and client satisfaction.

Key Questions:

[01:04] If hourly billing creates so many limitations, what alternative pricing models could your agency adopt today?
[04:56] Are you unintentionally rewarding slower work and discouraging expertise by billing clients by the hour?
[26:44] Do you think it’s unethical to advocate for the idea of different prices for the same service depending on the person that's in front of you?
[29:31] What kind of agency do you want to build over the next three years? One with predictable productized services or one focused on high-value custom projects?

What You’ll Discover:

[01:21] The pivotal moment Jonathan realized hourly billing was flawed, and how shifting to fixed or value-based pricing changes incentives.
[04:56] Unlike hourly pricing, fixed or value-based pricing leads to happier clients because it eliminates billing anxiety and constant deadline pressure.
[08:00] The concept of packaging expertise into digital products, allowing agencies to generate scalable income without direct client involvement.
[10:50] How low-priced products can double as marketing tools that build trust and lead to higher-value client engagements.
[12:02] Productized services: fixed-scope offerings with published pricing that simplify the sales process.
[13:57] The difference between productized services and value-based projects, including when each pricing model makes the most sense for agencies.
[20:24] Why a paid discovery phase is a practical way to qualify clients while delivering immediate strategic value.
[23:07] The Maximum Price Formula, where price potential is determined by client desire, available budget, and perceived alternatives.
[27:03] Why value-based pricing should focus on measurable business results, not just deliverables like page counts or design assets.
[29:55] Practical advice for agencies transitioning away from hourly billing, which includes starting with a paid discovery phase as a simple first step.

Connect with Jonathan:

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