When a client starts a project, they know what they need and how much they are willing to pay for it. The problem with hourly billing is that it leaves too many question marks as to how much will get done and how much it will cost.
If services are being paid for at an hourly rate, there is usually a cap on hours to make sure the set budget isn’t exceeded. This makes sense so that more money isn’t spent than what is available, but it could easily limit the amount of services received from that budget. Once the hourly cap is met, the client has to either live with what they have or agree to spend more money than originally budgeted for.
There are also occurrences that cannot be foreseen that take more time than they should. An example of this would be a simple social media graphic. Sometimes finding the perfect background image can take an hour or more, then add the actual design for another hour on top of that. Two hours of design gets billed for a social media post...but what if the design is completed and didn’t turn out as well as everyone had hoped? Who pays for those two hours that were just spent on a graphic that won’t even get used? Hint: It isn’t the agency.
What if a phone call or meeting is needed to discuss that design in detail? That is time spent by the agency and the client is paying an hourly rate. This graphic is not only costing way more than it should, but it is eating away at the hourly cap in the meantime.
The client shouldn’t have to worry about things like that. There should be some comfort in their mind knowing that they aren’t about to be gouged with a huge bill that they never planned to have.
The alternative? Fixed billing. With fixed billing, the client knows how much everything will cost from the beginning. Whether it is a set fee per graphic or a set fee for an entire project, they know what they should expect to pay for the job to be completed. That includes all the meetings and phone calls that are needed, without extra charges on the bill... Peace of mind is priceless.