The decision to switch to weekly blocks of billable work has had an enormous impact on my quality of work and my quality of life. Some of that impact was planned, but a lot of it was a complete surprise. Let me explain…
I was on my own, starting full-time freelance for the first time in my career. My future was wide open, but I had some deliberate objectives for my new life and work situation.
I spent the previous twelve years running an agency, and we spent a lot of that time thinking about how and how much to charge our clients. We did a mix of project-based pricing and hourly-based retainers (with monthly minimums), but we still ran into scope creep issues, cashflow issues, selling challenges, and constraints on how flexible we could be with the work.
In this next act, I was determined to solve one of the most misaligned aspects of the agency-client relationship… billing and the flexibility to change scope without constant renegotiation. If done correctly, I could create a happier work experience for myself and produce better results for my clients.
Side note: if you’re thinking, “yeah, that’s called a retainer,” I hear you, and what I’m about to describe is very similar to a retainer. Retainers, though, are usually pegged to hours, which I don’t like.
What did I do?
I was influenced heavily by Brennan Dunn, Jane Portman, Kai Davis, and Kurt Elster on things like productized consulting (packaged services), intentionally guided client relationships, and always bringing value to the client’s business.
I knew that I wanted to be as flexible as possible for the client and never say no to scope changes or new direction. I also didn’t want to charge hourly, since it directly dis-incentivizes work process improvements (something I’m very passionate about!).
That means both project-based billing (because it’s inflexible) and hourly billing (since it disincentivizes efficiency) are out. I needed something more creative.
In addition, any new system I create has to be simple and straightforward… so clients actually agree to it.
Three solid constraints.
My first thought was to focus on retainer-based or recurring work and move away from one-off, project-based work. I had experience with retainers from my past, but I knew that a traditional retainer wouldn’t work for my goals.
Importantly, I didn’t want to report hours. The thought behind this is that I strive for excellence in my process. That sounds funny, but it’s a real pride point for me, and therefore, I work significantly faster than the average person. For me, hourly billing devalues my work. A traditional retainer model basically says I’ll do at least X hours per month for a set price each month, which doesn’t align with my style.
Would it be possible to create a retainer where I don’t track or report hours?
Value vs. Cost
If you break down client work, the actual deliverable (a website, some copy, PR services) isn’t really what the business benefits from. They benefit from thevalue that the deliverable brings to their business.
Maybe instead of a minimum number of hours, I could deliver a minimum value.
This way, I’m incentivized to be efficient, because no matter what, I always have to provide that value.
Where weekly comes in
At this point, I had a kernel of an idea… to use a retainer that’s based on value, not hours. There was obviously more to figure out.
Delivering value is a tangible thing, but it sounds really intangible, especially to prospective clients. The traditional month-based retainer seemed too wide open to convince new clients they’ll get more value than they’ll pay each month.
Weekly retainers, though, sounded kind of nice. If I use a weekly retainer, cancellable anytime, the commitment is a lot lower for the client. And I guarantee value for each week, so it’s pretty low risk overall.
Since most projects last more than a week, I estimate them in terms of weeks, and we agree on that in the beginning. Each week is a milestone. If the client gets excited and wants to do more, we add more weeks. If I underestimate and something takes longer than I said, I finish the work without additional fees.
As long they see value each week, it’s an easy decision whether to pay for another or not, and we can reevaluate any week.
Once I started doing this, I realized some really cool things. First, the constraint to deliver value each week has been huge for my personal productivity. I’m forced to find smart ways to work so that each week I provide something valuable.
Another side note: I’m not always delivering something final, but it’s always something tangible… not just an email that says “I worked on X, and it’s coming along great!”
Clients also love this, because they’re asking for things and seeing them happen, quickly. What does every client really want? Constant progress.
Another thing I realized is that my client relationships have become much more aligned. I can say yes to anything… complete flexibility. If an idea changes, it’s clear to both parties that it will be extra week(s). We talk about how many weeks, and they make a decision. If a task is small, we talk about what else I can do to deliver “a full week’s worth” of value. Or, if I can fit it into an existing week, I just do it!
“A week’s worth” is a hard concept to get across, but in every industry, there is a vague concept of a solid week’s worth of work. A more tangible way to think about it might be 40 hours-worth. If you consider the average in-office worker is only productive about 60% of those hours (I do), then that’s more like 25 hours-worth.
Most of my personal drive to figure this out came from my belief that I work faster than average. If I strive to do 25 hours-worth of work in 10 hours, could I deliver a week’s worth of value in just 10 hours? It doesn’t matter, as long as the client gets that week’s worth of value.
Value vs. Time
I liked where this was going, but I realized that what really matters is that I deliver more value than they pay me… not just that I deliver a week’s worth of value. There’s not a standard or direct correlation between value (output) and time spent (input), so the amount I charge for that weekly block becomes an important factor. A week’s worth of work for $500 is very different than a week’s worth for $50,000.
I thought hard about how much value, in dollar terms, I could deliver in one week. There are plenty of things I can set up in a week that increase revenue forever, and I have the experience to solve expensive problems fast. I decided a baseline of $2,000 per week made sense for me.
My pitch became: I’ll deliver more than $2,000 of value each week, for $2,000. I’ll always deliver that value whether it takes a single afternoon or I work through each night, but I don’t track or report my hours.
This led to some really cool changes, again, to my process. For example, does a website design sketch bring financial value? Maybe for some, but not for most! I started only doing and showing what mattered, speeding up my processes and eliminating wasteful tasks that didn’t ultimately provide value. Most of them I’d been doing for years and didn’t even notice they were wasteful.
This is where it gets a little blurry, though, because specific deliverables have different value to different types of clients. When I work with an agency and they’re working with a large client, they do get value from that website sketch. A direct client that just needs a website, though, might get more value from a working version of their site to interact with.
I’m not sure yet if this works for every client. You can see if it will work for a particular client by convincing them to try it for a week or two. Just make sure you deliver. The bottom line is if the client is always happy (they never hear “no”), and they’re getting good work (on a weekly basis), they’ll keep paying. Just remember, this system is unusually reliant on trust and solid work. If they question anything (so if you get lazy), the whole thing falls apart.
There are consultants that charge $50,000 per week, and we can only assume they deliver at least that much value to their clients each week. Less experienced consultants might deliver less value, but they charge $5,000 or $500. The amount you can charge is ultimately based on how much value you’re able to deliver. As time goes on, that number should increase.
In my case, $2,000 is an amount of value I can deliver each week, but I’m not limited to one client per week. The more efficient I get at delivering value, the more clients I can take per week.
Or, put differently, the more efficient I get at delivering value, the more time I can spend with my family, my side projects, and my mountain bike.