Rates – What We Charge for What We Do
Let’s jump to the bottom line – here is my pricing structure, along with some of the billing options I offer to my clients. This rate structure has been designed to make sure you have options – it’s not a one-size-fits-all approach. And frankly, it’s also designed to encourage you to stretch – because the more of my services you buy, the lower your per-hour charges will be.
Here is how I usually work:
1. My base rate for project work is $200 per hour. This rate is reserved primarily for one-time clients and for unscheduled rush projects.
2. Clients – those who agree to a monthly retainer fee – receive a much lower rate, a rate based on the hours retained. A retainer allows clients up to a given number of worked hours per month in exchange for a flat hourly rate – for instance, a retainer of $1,500 per month would purchase up to 10 hours per month at my base retainer rate of $150/hour. This retainer fee is paid at the beginning of each month, before work for the month begins. Client-approved hours worked that are above the hours retained each month are billed at the lower retainer rate – this bill goes out at the end of the month, and is due to be paid by the 15th of the next month.
Retainer rates (per hour) are based on the size of the monthly retainer budget:
a. Monthly Retainer Budget – $1,000 - $2,499 – hourly rate: $150/hour
b. Monthly Retainer Budget – $2,500 - $4,999 – hourly rate: $137.50/hour
c. Monthly Retainer Budget – $5,000 - $7,499 – hourly rate: $125/hour
d. Monthly Retainer Budget – $7,500 - $9,999 – hourly rate: $112.50/hour
e. Monthly Retainer Budget – $10,000+ – hourly rate: $100/hour
Because these quoted retainer rates are sharply discounted off of Barnett Marketing Communications’ standard base rates, each retainer payment must be made by the client at the beginning of each month (or each billing period). Billings for extra hours and for expenses must be honored in a timely basis (i.e., paid by the 15th of the following month). Retainer agreements may be canceled by either party on 60 days’ written notice.
3. Clients who prefer a project basis can work in one of two ways:
a. A fixed-fee project, with one-half due at the outset and one-half due 30 days from the start of the project (or mid-way through the project, whichever is sooner)
b. A fixed-fee project, for up to a pre-determined number of project hours; hours above that to be billed in 30-day increments (in advance) at an hourly rate to be set at the time the project is contracted. Project fee to be paid one-half at the start, and one half 30 days from the start of the project (or mid-way through the project, whichever is sooner).
4. Expenses are estimated at 10% of the monthly retainer or project fee, and are billed out at actual cost at the end of each month, due by the 15th of the following month. Expenses at or below 10% (for phone, Fed-X, etc.) are not itemized nor do they require prior client approval; expenses above 10% are itemized, approved in advance and receipts are available for review.
Obviously, because of the risk involved in fixed-price projects (i.e., the chance for in-process changes adding to the time committed to the project), rates for fixed-price projects tend to be higher; but they are fixed, and some clients prefer that option.
Some other particulars you’ll want to note – taken from our standard client agreement:
a. We bill out-of-pocket expenses for items such as postage, delivery and travel, separately, each month (due and payable 10 days from invoicing). Hard-cost invoices are marked up at the industry-standard rate of 17.65%, which reflects a 15% increase over the actual costs (the mark-up covers our accounting and carrying costs). Whenever possible, we arrange for our client to be direct-billed by hard-cost vendors, saving clients the mark-up cost and focusing more of their budget – of your budget – on productive deliverable services, rather than overhead.
Some hard costs include:
· Fax service is provided for a fee of $.75 per page (local faxes at no charge)
· Copy service is provided for a fee of $.25 per page
· Local telephone service (including local fax service) is provided at no cost
· Long distance telephone service is provided at-cost, plus applicable taxes and phone-company-billed administrative fees.
b. Collateral material, press materials, audio-visual production, and advertising production requested by the Client at the industry-standard markup of 17.65%, which reflects a 15% increase over the actual hard-costs of these deliverables. Barnett Marketing Communications will receive 50% of all bid third-party costs in advance of the start of projects involving third-party vendors - this applies primarily to collateral and production expenses - and will receive the final 50% ten days before the estimated delivery date of the deliverables.
c. For advertising placement, the industry-standard commission of 15 percent is billed (client pays gross charges, agency pays the media at the net rate).
d. For collateral and other production-type projects involving sub-contractors, Barnett Marketing Communications receive a 50 percent deposit, in advance of the start of production, for all estimated collateral and production expenses. For advertising placement, Barnett Marketing Communications will charge a commission based on the standard industry rate of 15 percent, and will receive payment-in-full prior to placement.
For your convenience, payment may be made at any Bank of America branch by depositing payment to the Barnett Marketing Communications checking account, with payment made out to Ned Barnett (not to Barnett Marketing Communications). Account information will be provided to facilitate such deposits. We also accept payment by wire transfer, or by personal or business check; however, we require that such checks clear before we can begin work.
I am also open to other working arrangements; however, these three approaches have served me and my clients well for more than 15 years. They are fair to all parties, they promote trust, and they ensure that the work gets done on time and in a fully professional manner.
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