Agency Pricing Models: Hourly vs Retainer vs Value

How you price determines how you work, what clients expect, and how much you can earn. Each model has tradeoffs.

Hourly

Pros: Simple to explain. Low risk—you get paid for time spent. Easy to scope.

Cons: Caps your income at hours worked. Clients watch the clock. Rewards inefficiency.

Retainer

Pros: Predictable revenue. Ongoing relationships. Less constant sales pressure.

Cons: Scope creep risk. Can become underpriced over time. Client may feel entitled to unlimited work.

Value-Based

Pros: Highest potential income. Aligned with client outcomes. Rewards expertise and efficiency.

Cons: Hard to price correctly. Requires deep client understanding. Riskier if project goes sideways.

The Progression

Most agencies start hourly, move to retainers for stability, then add value-based for big opportunities. The best use all three depending on context.