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I’ve moved away from billable hours and gone to a fixed-fee retainer block. Clients get up to X hours per week at a single price regardless of what they use. Th

I’ve moved away from billable hours and gone to a fixed-fee retainer block. Clients get up to X hours per week at a single price regardless of what they use. This scopes engagements more tightly and results in a natural prioritization of time where I’m most impactful and offloads busywork or meetings where I won’t be productive. As a result I can handle more business and be more effective for my clients, while actually reducing the overall cost of an engagement and charging a higher effective hourly rate. So far results have been excellent. Edit: I consult as an interim CMO/VP Marketing for mid to late stage tech companies, typically focusing on accelerating growth or guiding companies through big changes in strategy.

cammikebrown 4y ago
Does “X” change much per client or have you found a good average amount that most clients go with?
- kposehn 4y ago
  The retainer amount has gone up over time with both the market and outcomes I’ve gotten for clients. The ROI is pretty easy to quantify.
spyke112 4y ago
Would you mind giving an example of how exactly you would bill your client, what does a “retainer block” mean?
- kposehn 4y ago
  * A retainer block is a fixed price for up to a certain number of hours per week, usually 10 hours and clients can buy multiple blocks. There are four blocks in total (all sold currently) * The client pays this amount regardless of how much time is worked * The advantage for the client is they have this time available to them and them alone - no one else will take it since it is already sold * The limit of hours per week naturally focuses my time where I’m going to be most effective; more impact in less overall time
  - micromacrofoot 4y ago
    How often does the client use all the reserved hours?
    - kposehn 4y ago
      Pretty frequently as I’m quite leaned in with clients. Some weeks are quieter than others, but I keep my time open enough that I can jump in on things with relatively short notice.
  - herewulf 4y ago
    I must say as an hourly based freelancer (software engineering) for the last six years, I don't like this. One of the biggest perks is the flexibility to take time off whenever I want. If I don't work a full day in order to spend time with my kids outside because the weather is nice, then I do. If I want a day off, then I take it. As long as my projects are making progress or I give advance notice of long vacations, then my clients stay happy. That said, I'm not fixed on the billable hour which is why this article and comments are so interesting. So, I do thank you for sharing your method.

cammikebrown 4y ago

Does “X” change much per client or have you found a good average amount that most clients go with?

kposehn 4y ago
The retainer amount has gone up over time with both the market and outcomes I’ve gotten for clients. The ROI is pretty easy to quantify.

spyke112 4y ago

Would you mind giving an example of how exactly you would bill your client, what does a “retainer block” mean?

kposehn 4y ago
* A retainer block is a fixed price for up to a certain number of hours per week, usually 10 hours and clients can buy multiple blocks. There are four blocks in total (all sold currently) * The client pays this amount regardless of how much time is worked * The advantage for the client is they have this time available to them and them alone - no one else will take it since it is already sold * The limit of hours per week naturally focuses my time where I’m going to be most effective; more impact in less overall time
- micromacrofoot 4y ago
  How often does the client use all the reserved hours?
  - kposehn 4y ago
    Pretty frequently as I’m quite leaned in with clients. Some weeks are quieter than others, but I keep my time open enough that I can jump in on things with relatively short notice.
- herewulf 4y ago
  I must say as an hourly based freelancer (software engineering) for the last six years, I don't like this. One of the biggest perks is the flexibility to take time off whenever I want. If I don't work a full day in order to spend time with my kids outside because the weather is nice, then I do. If I want a day off, then I take it. As long as my projects are making progress or I give advance notice of long vacations, then my clients stay happy. That said, I'm not fixed on the billable hour which is why this article and comments are so interesting. So, I do thank you for sharing your method.