Why is the Per Hour Model Dead and What do Instead

In today's rapidly changing business landscape, the paradigm of charging clients on a per-hour basis is becoming obsolete. Why? Simply put, clients are now more results-oriented. Here's a dive into why the per-hour model is waning and why businesses should pivot towards a results-driven approach.

A Shift in the Client-Services Landscape

Traditionally, businesses hired experts and consultants based on the number of hours they could dedicate – hoping for insights and solutions. In this age of immediacy, however, clients are not looking for just "bum on seats"; they crave tangible results, and they want them quickly. It's not about how long a consultant spends with them; it's about how effectively they can deliver solutions.

Value Over Time

A significant challenge with the time-based model is the inherent uncertainty it brings. When you charge per hour, the client often has no clue about the duration and, therefore, the final cost of the service. This ambiguity can lead to hesitation or even distrust.

In contrast, a result-oriented package offers clarity. Imagine telling a client, "We'll deliver this specific result in eight months for $8,000." That's direct, powerful, and transparent.

The Scarcity Trap and Customization Fatigue

Many service providers get trapped in the per-hour model due to scarcity fears. Without a clear vision of where the next client will come from, they may maintain a never-ending contract, continuously addressing new issues without a set objective.

Furthermore, constantly crafting bespoke packages for every new client isn't just daunting; it's exhausting. This tailored approach prevents businesses from streamlining their services and building a scalable model. Instead, by focusing on delivering specific results through established methodologies, they can accelerate growth, improve efficiency, and enhance client satisfaction.

The Clarity of Single Offerings

A pitfall many fall into is overloading their portfolio with myriad offerings, believing that variety will appeal to a wider audience. However, this often backfires. A deluge of choices can overwhelm clients, leading to indecision.

On the contrary, a streamlined, clear service or product can not only make the decision process smoother for clients but also allow businesses to refine and perfect that particular offering.

Escaping the Per-Hour Model

Market Research: Before anything else, understand your market. This includes analyzing competitors, re-evaluating your own ideas, and most importantly, understanding your clients.
Creating an Irresistible Offer: Your offer should address a specific problem for a particular group in a unique way. It's about striking a balance between specificity and broad appeal.
Rethinking Pricing: Factor in the Cost of Inaction (COI) and the potential Return on Investment (ROI). If your service can save or earn your client millions, you should price accordingly.

The business landscape is evolving, and so should our models. It's not about the hours you put in but the value you bring to the table. As service providers, we should aim to maximize results in minimal time. By shedding the limiting per-hour mindset and focusing on delivering clear, tangible outcomes, businesses can not only boost their own growth but also offer unmatched value to their clients.

Eager to delve deeper into the shift from per-hour models to result-driven strategies? Join Untapped podcast as Dalaney dissect this evolving business paradigm. Tune in now to understand the trends shaping our business future and ensure you're always a step ahead.