Why I prefer modular pricing over time and materials engagements

I had to re-price a proposal this week after the client thought it was too big an initial commitment. Really reminded of the importance of modular pricing.

I like to engage in bite-sized chunks, where each discrete module delivers value in its own right. The client can commit to all the modules, or just the first, and they can walk away at any stage with something tangible and useful.

Time and materials engagements are a rare, last resort for me. They put too much risk on the client, and that can go badly for everyone.

Clients aren’t buying my time, they want valuable outcomes. It’s up to me to figure out the work required to create that outcome, and to come up with the right modular price.

I have the expertise and the information advantage going into an engagement, so I should be the one bearing the pricing risk, not the client. They shouldn’t be funding my learning curve or my inefficiency.

Most of my clients have been financial advisers themselves at some point in their careers. They’ve lived this dynamic with their own clients, trying to deliver a complex service in a manner that’s digestible and valuable. When I take the same approach with them, they get it immediately.

Even after doing this for years, I occasionally misjudge the right sizing up front. Modular pricing makes it easy to make adjustments, and we end up with a better engagement because of it. 🙂