Copywriting rates: Why I switched to hourly after 8 years’ fixed price

November 4, 2010 •
copywriting rates

Fixed price was the natural way to go for me

When I started Divine Write, back in 2002, it seemed natural to me to quote fixed prices. There were 3 reasons for this:

  1. When I get tradesmen to work for me, I always want to know how much they’re gonna cost. I’m a tight bastard!
  2. I’d come out of the software industry, where I’d worked as a salaried technical writer for 9 years. I was used to fixed earnings. Had I come out of an agency environment, I might have been more used to working hourly. It seems to be more common there.
  3. I thought clients would like fixed prices better.

So from the get-go, I charged fixed prices.

And it went OK for years

This seemed to work well. I was earning OK money, and I had plenty of work. In fact, most of the time, I had too much work. At first, when this happened, I tried outsourcing the work. But then I ended up spending as much time managing and fixing the job as I’d have spent writing it myself, and I was earning less for the privilege!

So after a few failed attempts at scaling, I opted to simply raise my prices whenever I got too busy.

I kept doing this until I reached a nice balance point. I had just the right number of clients — repeat and new — to earn a comfortable living, without having to work crazy hours, outsource, or take short-cuts on jobs. I could give each job the time it deserved.

But then things started coming unstuck

But by then, I was ranking very well on Google, so I was getting a lot of request for quotes. A LOT. I devised all sorts of systems to deal with this additional workload, but I was still spending near as much time quoting, as I was spending writing client copy.

Now obviously quoting isn’t a bad thing if you’re converting, but because my fees were quite high, my conversion rate on quotes was quite low. So most of my quoting time was wasted.

So I decided to redesign my website and publish my prices. I figured the combination of up-market website and high published prices ($1,190 for a home page of up to 150 words, and $2 per word for sub-pages) would turn away the low budget clients and tire-kickers.

I was right. The request for quotes dropped off significantly. I went from putting out an average of 1-5 quotes per day, to putting out 1-5 per week.

Too many un-billable hours

This drop-off in quotes freed up a lot of time. But unfortunately, none of that time was billable. I needed to bring in more client work. I had to increase either my traffic or my conversion rate.

But after 8 years in business, I’d already topped Google. I already had an effective social media strategy in place. I’d already refined my marketing message. I knew if I increased my prices, I’d earn more per job, but I’d win fewer jobs. Likewise, I knew if I dropped my prices, I’d get more work, but I’d earn less per job.

So, with my existing business model, I really had only 1 choice: invest in some other form of marketing.

I didn’t want to shell out for marketing

Hmmmmm….

As discussed above, I’m a tight bastard. I didn’t like the idea of this at all. Plus I’d learned through my failed attempts at outsourcing that scaling isn’t always the answer, no matter how logical it looks on paper.

I decided to go out on a limb, and try something completely new: charging hourly rates.

Clients pay less when they pay by the hour

My reasoning was that, even though most clients want a fixed price, in reality, an hourly rate would usually cost them less. That’s because they’d be paying only for the time I actually spend. When I quote fixed prices, on the other hand, I have to assume the worst. I have to factor in the risk that the job will take longer than I estimate because of something unforeseen.

For example, the average home page of about 100-200 words actually takes around 5-6 hours to write. (I mean to write it well — to craft a compelling, effective message. Obviously, I could write 100-200 words in 10 minutes, and it would read beautifully. But it usually wouldn’t be very effective.) But sometimes it takes 8-10 hours. So when I quote fixed prices, I have to factor in a bit extra just in case that happens.

Plus, SOME home pages have taken a LOT longer than that. One took me 20 hours! When you’re quoting fixed prices, you need to have this covered too. You need to spread the cost of these occasional blow-outs across all your other jobs. In other words, EVERY client pays for that 20 hour job!

Quoting an hourly rate, if a client’s home page takes me 4 hours, I charge them for 4 hours. They don’t have to pay extra to cover my risk.

But how to convince the client?

Now obviously this means THE CLIENT is taking on the risk. Because they’re paying for my time, they’re wearing the risk that the job may take longer than I estimate. So this is obviously a barrier to conversion that I have to overcome in my marketing message.

The way I’ve overcome it is to simply lay it out: I cite the 20 hour example above. And I explain that I’ve been writing copy for nearly a decade, and I have a very good feel for how long things are likely to take. I explain that most blow-outs are due to clients changing their mind about what they want to say, changing their offering, demanding hours on the phone, or making me spend hours justifying why it’s OK to start a sentence with a conjunction. Those sorts of things…

Now I’m earning more

The upshot? Clients are good with it. And, although I now earn slightly less on most jobs, I’m earning more overall, because my conversion rate is higher. (This is slightly different from lowering my fixed prices, and earning less on ALL jobs, because now, if a job takes me longer, I get paid for that time.)

I’ve been using this model for about 3-4 months now, and it’s been very successful for me. So successful, in fact, that I’ve once again had to raise my rates!

Some interesting side-notes

  1. Tracking & targets — One of my other reasons for switching to hourly rates was that it allows me to more easily set revenue targets and monitor whether I’m hitting them. I know that if I do around 5 hours of billable work per day, I’m on target. Before, not all my hours were billable, even when I was working on a client job. So things weren’t this simple. I’d have to go on actual invoicing and revenue, and those things go up and down drastically. Some weeks, no money would come in, other weeks, thousands would come in. So tracking was possible only by the month or even quarter. And I don’t know about you, but if something’s going wrong in my business, I want to know about it immediately, not 3 months down the track!
  2. Quoting & up-front payments — When I was working to fixed prices, I was charging 50% up-front. This was very simple, ‘cos I always knew exactly how much the job would run out to. Now that I’m charging by the hour, I can only estimate the total fee. But that doesn’t mean I can’t charge an up-front. Now, I simply charge for 50% of my estimated hours. Clients are fine with this.
  3. Clients understand it — When you work to fixed prices, the deliverable is ambiguous (to the client). You’re delivering copy, but they feel you should be delivering so much more. They want results, guarantees, miracles. (James Chartrand, of Men With Pens, wrote a very good post on this the other day: Why Selling Writing Doesn’t Get Results. She said clients want to “get jazzed and excited and hear angels sing”, and that copy, by itself, doesn’t do that.) Copywriters can’t GUARANTEE results unless we test, test, test. And that means having control of all the controllable variables. We’d have to devise testing strategies, and set up and maintain testing procedures. We’d have write and test multiple versions of the copy. And all of this takes time. Most clients are loathe to pay for 1 version of the copy. There’s no way they’d pay us to write and test 2, 3, 4, maybe 10 versions of the copy. Charging hourly rates overcomes most of this problem. Clients understand hourly rates. They’re paying for your time. Simple.
  4. Tools — I’m now completely in love with my time-tracker, Yast, and my project management and collaboration tool, Liquid Planner. These tools have immediate and very direct benefits when you’re charging by the hour.

Anyway, I’ve gotta get back and earn some money!

Happy writing.

Feel free to comment...
comment avatar
Kate Toon wrote on November 4th, 2010

Hi Glen, Great article. I went out on my own a couple of years ago after working in agencies. I use the same model: an hourly rate, an estimate of time to cover writing and amends (based on experience) and then charging additional hours if the job goes over my original estimate. I've also tried getting junior writers but I'm just too fussy! So like you I have a finite amount of time I can work and money I can earn. So I recently published my rates on my site. I was nervous about doing this as I thought the phone would stop ringing, but you're right, it 'cuts the wheat from the chaff' as my mum would say. One thing I do find hard is deciding how much an hour of my time is worth! Thanks for your wise words, Kate

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Barbara Ling, Virtual Coach wrote on November 4th, 2010

I learned a few centuries ago never to agree to hourly rates - you always then think the provider (in my case, home improvement contractors) will drag out the project because it's easy money to them. James is currently doing an awesome site redesign for me, and one thing I'll certainly do is publish my rates online. Like my clients, I know what I'm worth and I simply do NOT want to debate it. It will be priced as it deserves to be. Kudos to you for making the switch! Getting to that point can take quite awhile and it's really satisfying when it all works out.

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Johanna Baker-Dowdell wrote on November 4th, 2010

Excellent post Glenn and a topic we've touched on before - the thorny issue of charging. Glad to hear it's been such a success.

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Martin Stellar wrote on November 4th, 2010

That's an stellar post. I've been struggling for years with this theme and what you say makes a LOT of sense. Still don't know which way to go, but thanks for the brainfood ;)

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Martin Stellar wrote on November 4th, 2010

Did I really typo? Gosh. Martin, please.

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Copywriter Jobs wrote on November 4th, 2010

Our site, Copify. has produced some interesting debate about copywriters and how they charge. Somewhat controversially, we bill 'per word'. Whilst being much maligned by many traditional copywriters, most of our clients like this approach as it means they know exactly what they are getting up front.

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Christine wrote on November 4th, 2010

Great post! I'm wondering, though, if you think hourly rates are appropriate for beginning copywriters like myself. It takes me a lot longer to write good copy because I'm less experienced, and is it really fair to charge clients for all those hours? Granted, my clients know I'm new at this, and my hourly rate is relatively low. Any thoughts?

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Tamsin Sowden wrote on November 5th, 2010

Thanks for the post, Glenn - great food for thought. I'm with Christine - is it an appropriate strategy for beginning copywriters or is it best left until you have some longer term experience under your belt? So far, I'm finding clients prefer a fixed price quote. And when I ran a freelance editing business years ago, I always provided a fixed price that allowed some leeway and spelled out that anything outside the project scope would be charged at an hourly rate. I always quoted each job based on its own criteria and rarely found that I was out of pocket. I haven't quoted prices on my site yet as I'm not sure what the market will bear - but as I've already had a few tyre-kickers I certainly will do so soon!

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Angus wrote on November 5th, 2010

Thanks Glenn, you've *really* made me think with this post! I suspect I may end up going the same way. Apart from anything else, I'd find it much easier to have the "money conversation" with potential clients if I could start off by quoting them an hourly rate rather than an "I need to know more before I can tell you anything" hedge.

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Perry wrote on November 8th, 2010

Maybe I am not looking at this right, but since practically all people like fixed rates, I'm going to stick with that for now. I figure that's the bottom line, right there. I put in my site: "In most cases the job can range from $100 to $1,200...." That way I can increase my odds in bringing in more window shoppers. They have an idea how much it will possibly cost them, right there on the spot. No having to fill out a form, no having to talk to anybody, no having to wait.... And if I look at a site, and try to guesstimate how long it will take me, I will add on, say as an example, an extra $100 in case it takes longer than usual, which usually does by an hour or two. But, if one was to think about it, whether it is per hour or per job, doesn't the end price for the customer come out to be the same anyway??? Example: For fixed rates, we look at a site, and guesstimate that it will take 10 hours, so we multiply that times our rate. But it's, basically, the same if we were to charge per hour, and it lands up taking 10 hours. Glad to see it works for you, though. :-)

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Perry wrote on November 8th, 2010

When I wrote: "That way I can increase my odds in bringing in more window shoppers, I meant to convert more window shoppers. Oops.

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maxiewawa wrote on November 14th, 2010

Nice post, very useful! But I disagree with starting sentences with conjunctions, you should never do it.

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Glenn (Owner) wrote on November 14th, 2010

@maxiewawa lol. Ok. I'll stop.

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Marc Morrow wrote on March 5th, 2011

As I'm just re-entering the contract workforce after 20 years on a salary, I'm very pleased to know that at least some high-end professionals are adopting the hourly rate instead of a set fee. My services won't be restricted to copywriting, but to various aspects of visual design, and I intend to charge a single hourly rate regardless of the tasks performed. The execution of a task, regardless of what it entails, breaks down to a period of time, so an hourly rate works across the board, provided you have a fairly good inkling of how long it takes to complete a specific form of work. It certainly eliminates the variable profit per hour that comes from missing the deadline dictated by a set fee.

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Mark Cowtan wrote on December 15th, 2012

Glen, I loved your article, you covered a lot of angles. It is a thorny problem indeed. Clients prefer fixed pricing, becuase it seems less risky. However, it leaves the producer highly exposed to feature creep or vacillations from the client. Hourly pricing declares your worth up front, and it cuts down the investment you need to make in scoping the project. If you can swing hourly rates, the clock starts ticking right away, not after you've gone back and forth with quotes. I favor hourly rates every time, even as a buyer. Hey, if I don't feel I got value for money in the end, I just don't go back. Or, if the project is going squirly, I can cut my losses early.

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Glenn (Owner) wrote on December 16th, 2012

Hey Mark. Exactly right. Everyone is so focused on the actual dollar value, that they forget about the implications. Sure you may get someone to commit to doing the job a couple of hundred dollars cheaper, maybe even a thousand, but the reality is that they have to finish the job quicker in order to keep food on the table. And what's the cost of that speed...???

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Copywriting rates: Does an hourly rate limit your income? wrote on April 21st, 2015

[…] Copywriting rates: Why I switched to hourly after 8 years’ fixed price […]

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Mercy Mmbone wrote on November 28th, 2016

Awesome! I don't bill by the hour, but by word. I find it convenient.

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