Hourly rate vs. Value rate

Hourly rate vs. Value rate

By Rajesh Setty on Mon 21 Feb 2005, 7:44 AM – 1 Comment

Those of us in professional services business are very familiar with the concept of hourly rate. Some companies have daily rates for their people. It is an accepted norm to have a rate sheet for based on the levels of people. While this concept works and helps in transacting business, my strong belief is that each professional needs to move away from the hourly rate mentality.

Come to think of it, the client is not paying for every hour that we spend on the project. In fact, if they did, that’s an insult to our intellect. They do pay for the value that we pack in an hour. What if we start thinking about the value that we can add in an hour, in a day or throughout the life of the project and forget completely about the hourly rate that the company charges the client. What if we come up with our own value rate. The amount of value that we intend to pack in an hour – quantified. Obviously this will be a far greater number compared to the hourly rate that is being charged.

If all our project team members start thinking in this fashion, I am sure our clients will experience a WOW in every project.


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Anonymous  on June 11th, 2006


There is a fabulous book that talks about providing value as a speaker and to think about what you can offer the buyer (the person who hires the speaker and cuts the check).

Too many speakers market themselves by a set rate leading potential buyers to think they are paying by the hour rather than the value. For example, if you charge $2500 for a talk, you need to be sure value is added to make it worthwhile for the buyer to have you there as a speaker.

For instance, say you want to speak for an hour on a certain topic. What else can you provide over and above this? Perhaps say an extra hour to mingle with the audience instead of rushing off to the next speaking engagement? Perhaps set up a table where you can autograph books? Perhaps offer a breakout session later in the afternoon? What about offering a solution that the buyer never thought of?

While there is nothing new under the sun these days, we can add value if we just think about it. Discuss with the buyer what’s important for them to achieve by having you there. Will the organization be better after having you there? Will your expertise lend more lasting value long after you’re gone from the platform? As you can see, there are a multitude of things a speaker can do that will add value.

The book I’m referring to is called “Money Talks…How to Make a Million as a Speaker” by Alan Weiss. Great book, I highly recommend it.

Stephen Hopson


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