For years I have not been a big fan of the variable model. My perception has always been that the client wants to turn their problems into yours. And honestly I still do, but today I am a bit older (older sounds wise, but that is not the case yet).
It is also curious that the topics of this blog do not age. I have already touched on it more than seven years ago. The content from then is still valid, but as most of the time I do not go into detail about how to do it in practice. It is because I do not like to think too much for anyone, but also the mornings do not allow me to write much more, so I like to be brief.
These last few days, so as not to have to get up even earlier, I have been posting the morning post in advance during the day. That is what I am doing now, but don’t think I get many more minutes.
Let’s get to the heart of the matter
In the end, everything is relative and even better: it can be calculated.
How much time are we going to phone number library dedicate each month to this client? Today we don’t estimate a total, but rather think in categories like “a lot” or “a little.” This is something that we definitely need to improve. It would be as simple as estimating, for example, 30 hours per month and then putting in what you want to earn per hour. With this you already have a theoretical figure of what you would have to charge the client to make it profitable for you.
How much does the client bill
Or also. How much could this client understand the changes bill with their products? Depending on this figure you already know if you will be able to charge a variable that makes sense for you. Let’s say that they bill 200,000 euros/month.
Set a percentage of gross billing. Here we can begin the debate if it should be more of a contribution margin as we also do at AGP. If I think about it, it is a vietnam data model that we are already applying there today. Now we set the percentage. Let’s say 1.9% because it is a psychological figure because it is less than 2%. In this case, as an agency.
you aspire to earn a little
4,000 euros per month. If it fits with the figure under 1, you can then proceed with the proposal, which is 100% based on a variable.
It’s not complicated, is it? I didn’t imagine it either. Let’s see what this new potential client tells us when we present the proposal to him.