Whether you are a freelancer who offers services online or a firm that takes up outsourced projects, you will have to choose your pricing model correctly. Whatever pricing model you use, you need to make sure you get paid properly for the amount of efforts that you put in.
Here is a list of a few such pricing models that gives you complete information about what you have to know to take your decision.
Hourly pricing
One of the simplest pricing models is Hourly pricing. For this model to work well, you will have to focus on three things – communication, documentation and discipline. You will have to set systems to monitor your time as well as expenses. You will also need to check with your client consistently. This model may work very well for freelancers who work from their homes. Even in cases of complex technical work like app development, this model may work well.
Project-based pricing
The next pricing model is project-based pricing. This is a flat-fee that you charge for a particular project that you take up. This is irrespective of how much time you spend on the project and how much it costs you. However, if for some reason, you end up spending too much time or money on the project, this model may cause a loss of profit. A request for an increase in budget may not always be accepted and more often than not such a request will put you in an awkward situation. Nevertheless, if you have handled many such projects before and you are sure of making a profit by charging a standard flat-fee, it might work well for you. This model can work well for workshops too.
Retainer pricing
This is very similar to receiving a regular pay check. It is a fee that is pre-set for a certain time period or for a certain amount of work. It can be based either on time or value. When it comes to time-based retainers there are mainly two types – rolling retainer and use-it-or-lose-it retainer. In the first variety, unused hours can be transferred to the next month. However, in case of a use-it-or-lose-it retainer, the client stands to lose on any unused time as the balance would be reset for the next month. It is not wise to choose a Rolling retainer.
A value-based retainer can help you make some profits on the basis of your skills. In case you complete the job early, you won’t even be penalised for the time that you save. However, there are three things that rule here – the market conditions, your track record and the value that is perceived.
Package pricing
In case you are offering a variety of services, offering a package pricing can do you good. However, you may have to compromise with your service being viewed as a commodity. You can even set a minimum price for your project.
Performance-based pricing
Here the fee is based on your performance at work. Client satisfaction plays a major role here. This model may work for you only if you have legal support. However, this model can help in establishing an excellent working relationship that bonds you to your client.
Equity pricing
In this model you get a stake in the business as a reward for the work you have done. This may work well for small engagements and side projects; but not in the long term. The financial situation of the company plays a major role in deciding the success of this model.
Many times you may have to use different pricing models for different types of work. Also, the clients are not always the same. However, if you not sure how to design the pricing packages on the web, you should be checking out some popular website builders available for example – MotoCMS. They have tons of templates with cool pricing package design interlaced to suit your needs. You need to be in total control of your pricing strategy. Only then would you enjoy profitability.
