As a services company such as outsourcing, consulting or another project-based company, you will be asked to provide services to clients in exchange for a fee. The type of pricing you use will be based on the type of consulting services you provide, the length of the project, the complexity of the work, and the client's budget.
Here are four common types of pricing used in such service contracts:
1. Hourly Rate
This is the most common type of pricing for consulting services. You will be paid an hourly rate for the time you spend working on the project. The hourly rate will be based on your team's skills, experience or seniority, the type of work, and the market rates.
2. Fixed Fee
A fixed fee is a set price for the entire project. This type of pricing is typically used for smaller projects, that are easier to control or when the scope of work is very well defined. The fee will be based on your team's experience as well as the one of your competitors offering similar service solutions.
3. Variations to Fixed Fee
A variation of this approach is the Milestone-Based Fee, where you will be paid a set fee for each relevant phase of the project, and it is typically used for larger, more complex projects.
Another variation is the Subscription model, which relies on a fixed amount every month, quarter or year, and assumes either a retainer approach and/or the fact that the provided services do not vary in volume from one period to the next.
With this type of pricing, you will be paid based on the quantity of deliverables you bring to the client. This type of pricing is typically used whenever the project involves a series of many repetitive activities providing similar results. Depending on the industry, this could mean that prices are defined per prepared documents, written words, answered calls, processed payments, etc, and depend on similar offerings from competitors.
Oraroo supports all such types of pricing. In addition, you can combine them. You can:
- set up a fixed fee in exchange for an included number of hours worked or results obtained, and change for extra hours or additional results,
- you can define prices per aggregate volumes of effort or results,
- you can define prices per individual thresholds of effort or results
Once these contract prices are defined, you only have to monitor the proper recording of effort and results, and Oraroo will take care of calculating the correct fees that you need to charge to your customers, without fear of over-charging or losing revenue.