When I set up the agency, I initially had a day rate system in my head. Twelve years of consulting has prompted me to consider it first, and it felt like the obvious place to start.
But this first hunch didn't last long.
This week's issue is about what changed in my approach, what I charge for now, and why anyone selling technical work (consultancy, development, implementation) is going to hit the same wall soon.
What the work actually is now
Take a real piece of my current offer. A business loses enquiries because the phone rings while the owner is with a customer. I connect a voice model, a calendar, a notes system and a set of rules, all of which the customer may already have, so every call gets answered, booked and summarised back to the owner.
Theoretically any capable person with the right tools can assemble something similar in days.
What the customer actually buys is the knowledge of which pieces are needed to be put together, in which order, with which rules, for this particular business, so that it is still running robustly six months from now. As assembly gets quicker by the day with the use of AI, what the customer may actually buy is the judgment about what to assemble which took me more than twelve years to acquire. That is what the client is actually paying for, whether the invoice says so or not.
The moat moved
For most of my career, implementation was the scarce thing. Engineers, months, knowledge that took years to build. If you had those, you could charge for them, and time was the natural unit because time was what you were short of.
That changed faster than I expected. Implementation is now the cheap part. Judgment is the expensive part.
A price built on time now measures the part that got cheap and ignores the part that did not.
Why hourly quietly cheats both sides
It cheats the seller first. If the tools make me five times faster, hourly billing cuts my income by four fifths for the same result. The better I get, the less I earn per outcome. Nobody should build a business on that incentive.
And it cheats the buyer, which is the part people rarely say out loud. You never knew what a good hour looked like in this work, because nobody outside it does. So you were always paying for a number you could not check. Now the number is small, the outcome is large, and the gap between them is impossible to ignore.
If you have ever looked at a technical invoice and had no idea whether it was fair, that was not your failing. It was the model.
Metering is hourly wearing a different jacket
My first instinct was to swap hours for some sort of abstract units. For example metered minutes of calls handled by my system (think volume based pricing). It looks modern but it is the same mistake in new clothes.
The meters are still in my offer, and they do a completely different job. They are caps. A ceiling on scope so nobody gets surprised, the client knows exactly what is included, and I know exactly what I have committed to. Assurance for both sides. Nothing to do with what the work is worth.
But what it is valued now is not a pure input - output relationship but rather something a lot more valuable.
What you actually pay for
The price is fixed, and it is anchored to what you gain after the services are applied and working.
If I rebuild your funnel and it should bring in twenty more qualified leads a month, we start by working out what a lead is worth to you. The price is a share of that. If I put a support agent in place that keeps customers who would otherwise have drifted off, the price sits against the value of the customers you keep.
We do that calculation together, in the first conversation, with your numbers. You leave it with one figure. No hourly estimate that doubles halfway through.
And if I misjudge the work, that is my problem, not yours. Under hourly billing, the client pays for the consultant's mistakes. Under a fixed price against a pre defined outcome, the consultant does. That is fairer, and it is the only honest way to charge when even I cannot predict the hours anymore.
If you want to see what that number looks like for your business, that is the whole point of the first call. You can book a session together here.
The question to ask yourself
If you sell technical work in any form, your pricing model is a claim about where your value sits.
Hourly says the value is your time. That was true when time was the scarce input. If the tools now do most of the hours, the claim is out of date, and the market will notice before you do.
So: what would you charge if you could finish it in a day?
If the honest answer is a lot less, you are pricing the assembly, and the assembly is nearly free now. If the honest answer is about the same, you are pricing the judgment, and you are probably close to right.
Two things you can do with this
Tell me how you charge. Reply with your model and whether it still fits the work. I read every reply, and the honest ones are the ones that change my thinking.
Or run the numbers on your own business. Thirty minutes, your figures, and you leave with a fixed price for one specific outcome, whether or not you go ahead with it.
The One Thing
Implementation lost its moat and judgment did not. A price built on hours measures the part that got cheap and ignores the part that did not, so it punishes you for being good and leaves the client paying for something they could never check. Price against the outcome. Keep the meters as caps. Let the number reflect what the client actually gains.
Charge for the judgment. The assembly is nearly free now.
What I'm Thinking About This Week
How much of my twelve years was about being able to build things, and how much was about knowing what to build. I always assumed the first. Watching the tools take over the building, I think it was the second all along, and the rate card I started with was measuring the wrong one.
Reply to this email with one of:
How do you charge today, and does it still match where your value actually sits?
What would you charge if you could finish it in a day?
Have you ever priced against an outcome, and what went wrong?
What resonated? What did I get wrong? Hit reply: I read everything and I'm building this with you and with your input.
P.S. The toolkit, in the order I would use it: Visibility Audit → GEO/AEO Audit Checklist → How to Get Cited by AI → SEO Strategy Playbook → Title & Meta Audit → Sovereign Idea Workflow. All free.
P.P.S. Know someone still charging by the hour for work the tools now do most of? Forward this. The question near the end is the useful part. They can subscribe at thesovereigntechnologist.com.
That’s all for this week.
See you next Thursday.
