Creative Agency Account Manager Podcast Why time-based pricing doesn’t work for agencies, with Tim Williams
Jul 9, 2024
Tim Williams, Founding Partner of Ignition Consulting Group, discusses why time-based pricing doesn't work for agencies, the influence of generative AI on pricing strategies, and key steps to transition to premium pricing. The conversation highlights the importance of modernizing pricing strategies to capture the value of services in a changing market.
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Politely Disrupt Procurement Conversations
- Change the conversation early and politely disrupt procurement's hour-focused process.
- Signal that you sell solutions and propose a better way to be paid for outcomes.
Agencies Taught Clients Hourly Billing
- Agencies taught clients to buy by hours and FTEs in the 1980s when they introduced timesheets.
- Tim argues the industry must now re-educate clients to pay for outputs, just as other industries changed pricing.
AI Makes Hourly Billing Unsustainable
- AI drastically reduces the time to produce value, breaking hourly economics.
- Agencies must productize offerings and bake AI into solutions to capture that value.