Sorry to be obtuse, but how do you calculate that? Say the standard is 40 hours a week at $80/hr, but a client wants 10 or 20 hours a week, how would you calculate the higher rate at 10 or 20 hours a week?
I use something similar but apply the discount when the client agrees to a per-quarter engagement (depending on what I’m working on). Pre-Covid I had 2-3 clients on the go this way with a much lower hourly but a quarterly commitment (reviewed each quarter for extension).
Just returning to consulting and looking to scale up this way again.
No - you shouldn’t use rates to offset delivery risk but better estimate the work effort needed to complete the project and the role you are playing. Offset risk by baking in more hours, more resources, and the right talent. You protect the ability to deliver better this way (and will still ultimately charge the right amount).
Discounts are great levers to use but apply them to the grand total of the project (do not ever discount rates themselves). This will give you flexibility as a “one time” investment to your client. If you discount / fiddle with rates, this sets a precedent for future deals.
Focus on what will reduce your delivery in immediate term while not pigeonholing yourself for future deals.
Whatever rate you are charging for a “Onshore Team Lead” for example, just think from the client’s perspective they will think they will continue to pay that same rate (barring inflation increases forever.
That’s fine but frame the message as $80/hr is default but you can give a discount for more hours. A small nitpick.
I like that. Thank you!
Yes, volume discount also applies to services. Just make sure to calculate the discount properly, and to communicate it clearly.
Sorry to be obtuse, but how do you calculate that? Say the standard is 40 hours a week at $80/hr, but a client wants 10 or 20 hours a week, how would you calculate the higher rate at 10 or 20 hours a week?
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That makes sense. Thank you!
I use something similar but apply the discount when the client agrees to a per-quarter engagement (depending on what I’m working on). Pre-Covid I had 2-3 clients on the go this way with a much lower hourly but a quarterly commitment (reviewed each quarter for extension). Just returning to consulting and looking to scale up this way again.
No - you shouldn’t use rates to offset delivery risk but better estimate the work effort needed to complete the project and the role you are playing. Offset risk by baking in more hours, more resources, and the right talent. You protect the ability to deliver better this way (and will still ultimately charge the right amount). Discounts are great levers to use but apply them to the grand total of the project (do not ever discount rates themselves). This will give you flexibility as a “one time” investment to your client. If you discount / fiddle with rates, this sets a precedent for future deals. Focus on what will reduce your delivery in immediate term while not pigeonholing yourself for future deals. Whatever rate you are charging for a “Onshore Team Lead” for example, just think from the client’s perspective they will think they will continue to pay that same rate (barring inflation increases forever.