Why Marketing Agencies Are Moving Away from Time-Based Pricing
Time- and effort-based pricing has long been the default for marketing agencies. It’s straightforward and familiar, making it an easy choice. But AI is shaking up how agencies work, forcing a rethink of how services are charged to stay both competitive and profitable.
AI is still developing, but its effects are already clear. In marketing, AI speeds up tasks like research, data analysis, editing, ideation, and copywriting. This means agencies spend less time and effort on projects. If pricing is based on those inputs, agency invoices naturally shrink. That threatens both profits and how clients value the work.
So what can agencies do? They could ignore AI and risk falling behind. They could keep charging as before, which risks dishonesty. They could accept lower profits and possibly cut staff. Or, they could rethink pricing altogether.
Why Time-Based Pricing No Longer Works
Most agencies adopted time- and effort-based pricing because it was the industry norm when they started. It was a simple way to align with peers and clients. But that model wasn’t perfect—it never accounted for value or outcomes. With AI eroding the "time spent" variable, agencies need pricing that reflects real value and sets them apart.
Deliverable-Based Pricing: A Better Fit
Deliverable-based pricing (also called asset-, solution-, or outcome-based pricing) assigns a clear value to each service or asset. Instead of billing for hours, agencies sell the results or deliverables. This approach creates transparent, client-friendly pricing menus that make proposals easier and build trust.
With deliverable-based pricing, teams can complete work however they see fit—including using AI—without worrying about cutting into profits. It shifts the focus from “how long did it take?” to “what did we deliver?”
How to Switch to Deliverable-Based Pricing
- Engage your entire team to define a menu of services that clients need.
- Decide if you want broad service categories or detailed line items.
- Shift your mindset to price based on client value, not input costs.
- Consider bringing in pricing experts to guide the transition.
- Use tools like configure-price-quote software to streamline proposals.
This shift can seem intimidating, but knowing your business well makes it manageable. Deliverable-based pricing not only protects profits as AI speeds up work but also becomes a powerful way to differentiate your agency.
According to the Simon-Kucher Institute, most businesses are unprepared for AI’s impact. The change is happening faster than expected, so agencies that adapt pricing early will gain an advantage.
What This Means for Marketing Professionals
AI is changing the tools and pace of marketing work. Agencies that cling to old pricing models risk undervaluing their services and shrinking profits. Adopting deliverable-based pricing helps align your fees with the value you create, not just the hours you log.
For marketing professionals looking to sharpen their AI skills and better understand how to integrate AI into workflows, exploring relevant courses can be a smart move. Platforms like Complete AI Training offer specialized content tailored for marketing roles.
The Bottom Line
Marketing agencies need to drop traditional time- and effort-based pricing in favor of deliverable-based pricing. This approach preserves profitability, reflects true value, and leverages AI without penalizing your agency. The sooner you make the switch, the better positioned you’ll be in a market transformed by AI.
