VALUE TAKEOVER: Why Hourly Pricing in Marketing is Professional Malpractice

Hourly billing still exists in pockets of the marketing industry. It remains popular in some regions and among certain agency types because it looks simple and familiar. But it is a legacy model designed for a different era. It punishes efficiency, hides inefficiency and erodes trust between client and agency. The best agencies are cutting it out of their business.

Ron Baker, founder of the VeraSage Institute and author of Implementing Value Pricing, calls hourly billing “the cancer of professional services.” Blair Enns, author of Pricing Creativity, states, “When you sell your time, you are selling the wrong thing. Clients buy outcomes.”

Hourly billing is not only outdated. It is malpractice. This is a deep dive, defining the issue and providing the solution - Value Based Pricing.

The Legacy Model Marketing Can’t Shake

Hourly billing was never built for modern marketing. It comes from law and accounting, where predictability and repetitive work allowed for time-based measurement.

Marketing is inherently creative and unpredictable. A single idea can generate millions in revenue but take only a few minutes to articulate. By pricing on time rather than impact, agencies send the wrong message. Expertise becomes secondary. Execution becomes commoditized. Clients end up paying for minutes instead of outcomes, yet they are told this is transparency.

Agencies cling to hourly billing because it is easy to explain. It feels safe. In reality, it creates incentives that reward inefficiency and punish speed. The faster a team works, the less money it makes. Long projects, extended timelines and minor revisions become profitable, while elegant, high-impact work is undervalued. This model quietly erodes trust, turning what should be a partnership into a transactional, defensive relationship.

Industry Leaders Call It Out

Ron Baker calls hourly billing a cancer. He emphasizes that the first signal of professional value comes from pricing. When agencies price by the hour, they communicate that their time is more important than their expertise. The consequence is predictable. Clients focus on clock-watching rather than strategy. Teams focus on filling hours rather than solving problems. Creativity becomes secondary to administration.

Blair Enns takes it a step further. He says that value-based pricing frees agencies to do the right work at the right time. It aligns incentives with results, not effort. When pricing is tied to impact, both client and agency focus on achieving measurable outcomes. This isn’t a theory. It is the way top agencies consistently outperform their competition while building long-term relationships based on trust and clarity.

Why Hourly Billing Fails Creative Work

The core problem is misaligned incentives. Hourly billing structurally rewards inefficiency. Every meeting, every revision, every internal discussion can be billed to the client. Speed, clarity and brilliance become liabilities. The faster a team reaches a solution, the less revenue is generated. Agencies unconsciously learn to stretch work rather than eliminate bottlenecks or simplify processes.

Marketing is increasingly complex and high-stakes. Campaigns now involve data, creative, strategy and media integration. The real value is in the orchestration of these elements, not in the time spent on them. Hourly billing obscures that value. It reduces client perception to a ledger instead of a story of impact. In a world where measurable business outcomes define success, selling minutes instead of results is professional malpractice.

Transparency That Isn’t

Hourly billing is often defended as transparent due to the "management deliverables" involved to facilitate it, such as timesheets, line items, hourly breakdowns these appear to give the client visibility. In truth, they do the opposite with an added layer of guess work, extra management and... extra hours. Time entries are subjective, rounding is common and inefficiencies get disguised as necessary work. Clients end up paying for processes they cannot verify.

Value-based pricing eliminates this charade. When fees are tied to outcomes, everyone knows what success looks like before work begins. There are no hidden charges, no guessing games and no padding. Accountability becomes real, not theoretical. Both client and agency operate from a place of clarity. Creativity and experimentation are rewarded rather than punished.

Friction That Kills Creativity

Every email, every call, every brainstorm becomes a potential invoice under hourly billing. Clients hesitate to ask questions. Teams hesitate to experiment. This friction is toxic for marketing, where iteration, testing and bold ideas are critical. Hourly billing transforms collaboration into negotiation. Instead of solving problems, both sides calculate cost.

Value-based pricing removes this friction. Conversations shift to strategy, solutions and outcomes. Ideas are tested and refined without fear of hidden costs. Both client and agency focus on impact. Time stops being the measure of success. Results become the currency, and creativity finally earns its true value.

How Value-Based Pricing Changes Everything

Value-based pricing aligns incentives around outcomes. Agencies are rewarded for effectiveness, not effort. Clients gain predictability and confidence in the value of their investment. Everyone knows the stakes and the rewards before work begins. This alignment transforms the relationship. The agency stops being a vendor and becomes a partner.

Top agencies that embrace value-based pricing report higher margins, stronger relationships and more freedom to innovate. By removing the clock from the conversation, teams focus on strategy and quality. Clients focus on impact rather than minutiae. Both sides benefit. Pricing becomes a signal of confidence and competence, not a shield for inefficiency.

Clarity for Clients and Agencies

Hourly billing creates uncertainty. Clients do not know what their final investment will be until the invoice arrives. They are forced to micromanage rather than trust the agency. Agencies, in turn, are incentivized to protect hours rather than outcomes.

Value-based pricing flips the script. Budgets are clear, deliverables are defined and success is measurable. Agencies can focus on results, clients can focus on business outcomes. Revenue is decoupled from time, allowing creativity and speed to flourish without penalizing the team or client. The conversation shifts from cost to value.

Taking the First Step

Transitioning to value-based pricing is a process. It requires a deep understanding of client business, confidence in one’s own impact and clarity in defining outcomes. Agencies must articulate results before work begins, quantify value and structure agreements accordingly.

Even small pilots demonstrate the benefits. A single project scoped and priced on value can provide proof of concept for the team and the client. It allows refinement of methodology and builds confidence. Over time, the approach can become standard across offerings, transforming how the agency operates and how clients perceive its work.

Schema Agency stance

We price based on value and outcome, not hours. You won't see us opening up a work tracking app and jiggle mouses all day long to keep the "Online" status on Teams - we'd rather disband than even consider that kind of hellscape.

We define projects by results and scope, not time spent. Efficiency and innovation are rewarded, not penalized. Clients pay for exact, defined, pre-agreed deliverables, not minutes. We have a price and it's, as is the case with all business, negotiable. However, once it is agreed and etched into the contract - it will be delivered for the exact price you see in it. No guesswork, no justifications, no time-wasting - just pure efficiency, creativity and professionalism. Our approach eliminates friction, aligns incentives and fosters long-term partnerships. When you work with us, you invest in impact, clarity and outcomes rather than an arbitrary measure of time.

Hourly billing may still be common in some regions and industries, but it is a relic of a past era. It punishes efficiency, hides cost and rewards the wrong behavior. Value-based pricing is not just a trend - it is here to stay as the professional standard for modern marketing. Everything else is professional malpractice.

Leaving you with this discussion with top agency/creative execs discussing Value-based vs Hourly pricing models:

unthink marketing, schema