What if hourly billing is quietly holding your creative business back?

In this episode, Jacob Cass sits down with Jonathan Stark, pricing expert, author of Hourly Billing Is Nuts, host of Ditching Hourly, and co-host of The Business of Authority, to unpack why trading time for money is such a poor fit for expert work.

For designers, strategists, consultants, and creative professionals, hourly billing can feel simple and fair. But it often creates the wrong incentives. It rewards slowness, punishes efficiency, shifts the conversation away from outcomes, and positions expertise as labour instead of judgment.

Jonathan explains how creative experts can move beyond hourly rates, uncover the real value behind client problems, and price based on outcomes, trust, expertise, and business impact.

Together, Jacob and Jonathan explore the difference between fixed fees and true value pricing, how to run better sales conversations, why pricing is deeply connected to positioning, and how authority changes the way clients buy.

They also discuss the psychology of charging more, why creatives often underprice their own judgment, and the practical first steps for ditching hourly without blowing up your business overnight.

If you are tired of selling hours, defending rates, or being compared against cheaper alternatives, this episode will help you rethink what you are really selling and how to build a business around expertise, not availability.

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5 five practical ways to get started with value based pricing

1. Look beyond the deliverable

When a client asks for a logo, website or brand strategy, ask what they hope it will change.

Are they trying to attract better customers?
Increase trust?
Launch a new offer?
Compete at a higher price point?

The value is not in the number of logo concepts or pages you produce. It is in what the work helps the business achieve.

2. Talk to the decision maker early

Do not wait until the final presentation to discover what the owner or director actually wanted.

Before proposing the work, ask how they define success, why the project matters now and what happens if nothing changes.

This helps you understand the real problem before committing to a solution.

3. Price the value of solving the problem

Hourly billing can punish you for becoming better at your job.

If your experience helps you solve a problem in two days rather than five, the result is not worth less. The client benefits from your judgement, experience and ability to avoid expensive mistakes.

Price the value of solving the problem, not simply the time spent at your desk.

4. Offer three ways forward

Rather than sending one quote, present three fixed price options.

For example:

  • A focused brand review with clear recommendations
  • A strategic refresh of the most important brand elements
  • A complete strategy and identity engagement

Each option should help the client make progress, with different levels of scope, support and certainty.

5. Give clients a meaningful reason to choose you

Saying that you offer great service, creative thinking and tailored solutions will not separate you from others.

Be specific about who you help, the problem you solve and why your approach is particularly suited to that situation.

You might become the designer for professional service firms moving upmarket, the strategist for founder led businesses that have outgrown their identity, or the studio that helps hospitality brands prepare for expansion.

The aim is not to appeal to everyone. It is to become the obvious choice for the right client.

 

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The course gave me all the techniques and processes and more importantly… all the systems and tools I needed to build brand strategies for my clients.

This is the consolidated “fast-track” version to becoming a brand strategist.

I wholeheartedly endorse this course for any designer who wants to become a brand strategist and earn specialist fees.

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Transcript

Hello and welcome to JUST Branding. Today, we’re joined by Jonathan Stark, a pricing expert, author and advisor who helps independent professionals stop trading time for money and start building businesses around expertise, outcomes, and authority. Jonathan is the author of Hourly Billing Is Nuts, which we’re going to talk about today. He’s host of Ditching Hourly and co-host of The Business of Authority. So we’re in good hands here. His work challenges one of the most common assumptions in creative services, that billing by the hour is fair, professional, even safe. For designers, strategists, consultants, and folks listening in, this conversation gets right into the heart of the business model. So are you selling time or are you selling judgment? Are clients buying your hands or you’re thinking? If your expertise helps you solve problems faster, why should your pricing punish you for getting better? Very good questions. So today we’re unpacking why hourly billing is broken and how value pricing actually works, and how to build a business of authority, where clients pay for the outcomes, trust, and expertise, and not just the hours on a timesheet. So welcome to the show, Jonathan.

Thanks for having me. Excellent intro. You really set the table there for us. We’ve got a lot to do here.

Well, you built a whole body of work around this idea of hourly billing is nuts. So for all our audience of designers, strategists, consultants listening in, who’ve perhaps built hourly their whole career, what’s the first thing they need to unlearn?

First thing they need to unlearn is that price does not come from cost. Price comes from value. Or if I was going to say that even more surgically, I would say that an acceptable price comes from value, not from cost. So that’s the summary. We could talk about it for a half an hour just this piece. But cost, if you’re setting your prices based on your costs, you could be setting prices that are unacceptable to the client because the cost sort of insists that you mark up your time and then let’s say we get to, just to throw it around, remember $10,000. Well, if it’s not worth $10,000 to the client, it’s not an acceptable price. They’re going to say no. But if you work backwards and you find out what your assistance is likely worth to the client, maybe it’s $5,000. It’s only worth $5,000. It’s like, okay, for 500 or 1,000 or some fraction of $5,000, what could I do to help this client move the needle? Probably not the thing they asked me for in the first place. But this is a complete 180-degree mental shift from setting prices based on what it’s worth to the client instead of how much it costs you to deliver.

Well, let’s get this quickly out of the way then. Why is Hourly Billing such a bad fit for expert-based work?

Well, because if you know what you’re doing, you’re probably really fast at delivering good outcomes. You’re getting penalized for getting better at your job. Probably everyone listening has experienced, if you’ve been doing it for a while, you’ve experienced someone much younger than you getting jobs that you really should have gotten because their hourly rate is lower. When you put yourself out there with an hourly tag assigned to you, it’s just begging the client to compare you apples to apples with everybody else, which completely ignores how fast you are and how good you are and the kind of results that you typically provide to your clients. It just ignores all the important parts and says, I’m an apple, I’m 50 cents, that apple is 25 cents, you’re going to buy the 25 cent apple. Yep.

All right. And on the opposite spectrum of that, what are some of the big or hidden incentives that are created by growing the value base?

Well, the joke is if you get paid by the hour and you want to raise, it just works lower.

Right. If you think about it, charging by the hour incentivizes the executioner, if you like, of the work to take longer. It’s immoral in that sense. Why would you incentivize something that actually then decreases in value to one part of the team, but then increases the value to the other? So it’s and vice versa. It’s funny enough, I work with a few agencies and I had this situation recently where I was on this project. And there was a prickly conversation with the salesguides who had just sold this project. And they said, Matt, this kind of X amount of weeks that you wanted to do the strategy on, we’ve had to squeeze because the client’s budgets are not where we needed them to be. And so I said, why did you squeeze them? Surely we should have expanded them and dropped the price. In other words, why would you automatically go to squeezing a price because they assume the time that you’re going to spend on it is less and therefore the cost is less? Well, no, that’s not the case actually. But anyway, it’s such a difficult thing for people to get their heads around, isn’t it? Why is that? Why did it start, Jonathan, in this? Why have we got ourselves in this pickle?

Yeah. If I just look at myself as the test subject, this was not obvious to me until I was managing people at a dev shop. My background is in software development. When I was an employee and then I started working at a firm, I still had that employee mentality like, I put in the time, you owe me the money. It’s a salary question. Back then, this is like the early 2000s, late 99, 2000, 2001. The deal is, but in seat from nine to five, $50,000 a year or whatever it is. Inside of that, you just make sure you don’t do anything that’s going to get you fired. So if you keep up your end of the deal and they keep up their end of the deal, then everybody’s reasonably happy. And if you want to overachieve, that’s up to you, but it may or may not increase the amount of money you get, regardless. Okay. And probably a lot of people worked for someone and had a salary or something like that. I think it might come from there because that’s the piece that I find I have to sort of de-brainwash people out of, like the ones that did have a job job. Because when you meet someone who has been entrepreneurial all along and had a paper route and then, you know, mowed lawns and all that stuff, hourly seems insane to them. But there’s just not that many. There’s just, it’s a smaller pool of people who have kind of been entrepreneurial from a young age. So you come out of corporate or you come out of an employment situation. And I did it. Everybody does it. They say, oh, my salary was $100,000 or let’s, for easy numbers, my salary was $120,000 a year. So I need to make $10,000 a month. So I want to work this many hours per week and, you know, per month and if there’s four weeks, then they just divide. And like, here’s my hourly rate, you know, $120,000 divided by 2,000 hours. Boom, that’s my rate. Okay. And so now they’re thinking like an employee. They show up, they put in the time, that’s the deal. And the whole concept of outcomes is invisible to them. It’s totally invisible to them. And as long as that’s invisible, you don’t know what else to price. You just don’t know what to price. Everything seems… People who are listening to me right now that are like, what are you talking about? You’re the person who needs to really listen. Cause we’re, hopefully we’ll unpack it and make the light bulb go on. But if this, if you’re like, there’s nothing else to sell. I put in the hour and I do my job and that’s what they’re paying for. It’s like, that is not what they’re paying for. You just can’t see the thing that they’re buying.

That is so true. That is so true. So I used to run an agency, right? And we came across this massive problem where I was in this trap like you were talking about, right? So I had a team, we had a team of 12 and we would, you know, to cost out the project, we would kind of work out all the tasks and figure out how many hours we reckon they would take. And then we had an, I can’t remember the hourly rate at the time, I don’t even know how we came up with it. It was just like finger in the air. We think we’re worth this, we can get away with this, this is our hourly rate. And then what would indefinitely, will happen on some projects was, for whatever reason, particularly creative, right? Like this is a challenge because sometimes clients don’t like something that they see. They might have described exactly what you produce, but then they look at it and they go, don’t like it.

That’s not it, yeah.

Right, so then there’s this argument, because you say, well, I spent the time on it, as per my quote, and they say, yeah, but actually you didn’t deliver what you said you deliver. Now, who’s right? Now, what that showed me over years, and it took me years as well, and a near breakdown to figure out, there’s such a mismatch here, because the client is buying a result, and I’m selling hours, particularly like you were saying, the salaries and that kind of thing. Then what happens is, is that the agency doubles down and has to, and then you get the account managers having to have these really awkward conversations with clients. The whole thing is a mismatch, and it often ended in tears in one way that the agency or for me as the agency owner, I was crying, right, or the client was crying because we were enforcing the rules that they’d actually signed up for but didn’t really understand until they entered the process. So the whole thing is like for me, and I learned the hardware is not healthy for client, for agency or deliverer of the work, it’s bonkers.

So that’s nuts, it is nuts.

It is nuts. I wonder if only we had someone to talk to us about how nuts it is, Jacob, that would be so helpful. That’s basically what we thought. And then we thought, Jonathan could come on and discuss this. So I guess the question to segue into is like, OK, if that’s not a good system and if let’s assume we’ve some of the folks on this show have started to kind of get their head around that, what’s the better way? What’s the what’s the promised land? How do we shift out of this trap of selling time?

There are a bunch of ways, but just I’m going to stick with the value pricing concept. You guys brought that up first. There are other ways of price that I also like. Hourly is just you just got to stop doing hourly. But in the particular situation you’re describing, you did a bunch of work, you did what you said you were going to do, it ended up costing this amount of money. The client sees it and they’re like, this is not what we wanted. And I’ve seen this. I’ve seen people get fired over this. I’ve seen lawsuits because they spent hundreds of thousands of dollars. And then when the project is launched or whatever the outcome is, when the deliverables are delivered, and then the CEO shows up for the first time and is like, this is garbage. What have you all been doing? This is nothing. How much did I pay for this? Right. So if you just, it’s so bad. It’s so painful. Probably anybody listening that’s been in business longer than a few years has probably experienced this. It’s brutal. And you don’t want, no matter what you do at that point, the customer is going to be mad. You’re not getting a referral. Maybe they’ll pay you, maybe you’ll split the difference, maybe you don’t get sued, but it’s not building your business. So let’s unpack actually what’s happening here. In the scenario rolls into the room at the last minute and says, this is garbage, what is happening? What is happening is you’re having the conversation that you should have had before you started, before you even decided to take the job, because ultimately it’s got to go through the buyer, the economic buyer’s filter. And if you do not satisfy that person, you’re just shooting free throws with a blindfold on. Like what are the odds of getting a basket? It’s impossible. It’s next to impossible. When it happens, it’s by accident, because you don’t know what you’re shooting for. So if you move that conversation from the end of the project to the beginning of the project, then you can find out, first of all, if what the CEO wants is even realistic, if the project that they’re asking you to do is you even believe will potentially lead to the outcome that they want. If there’s any reason, there’s some other questions. So basically, you just take that conversation that happens at the end of the project, you move it to the beginning, and you have the CEO convince you that this is a good idea. And through that conversation, I call it the why conversation, it’s got some other components, you find out basically what the outcome is worth to them. And then based on what it’s worth to them, whether it’s $1,000 or $100,000, then you can easily set some prices based $100,000. Okay, $10,000, that’s a price. If the outcome’s worth $100,000 to the buyer, then $10,000 is definitely an acceptable price. But then you say, at a $10,000 price, what costs are justified on my end as the seller? So if I’m gonna get $10,000, and that’s it, no change orders, nothing, $10,000, what can I do that would be fist-pumpingly happy to do for $10,000? That will move the needle closer to the desired outcome of the CEO, and is a big win for me, and is a tenth of what the outcome is worth to them. Am I gonna get them all the way to the finish line? No, but branding people can’t get someone all the way to the finish line anyway. They can only contribute to a desired outcome, and that level of contribution has to be discounted because you’re not in control of everything along the way. If you could give them $100,000 for, you know, guarantee that they’re gonna get $100,000 a year over your benefit from your branding exercise, you could guarantee that. Well, yeah, you could probably charge $200,000, but you can’t guarantee it. There’s a lot of things that can happen. So you discount, as Blair says, you discount it by uncertainty, and at the $10,000 price point, you’re like, well, I could do a branding workshop. I could teach your internal people how to do this. It’ll take a half day, 30 day follow up. We can review what your team put together. And I’d be fist-pumpingly happy to do that for $10,000.

So I guess the other question here is like fixed fee pricing. And how do you separate them for someone that just pulls a number out of the air versus value base?

So value based pricing is a way to calculate a fixed price. So fixed pricing is sort of like a bigger level. It’s a higher level category. You can set a fixed price by rolling some dice. You can base a fixed price on how many