Apropos nothing: "$100 an hour is more than our CEO makes so I'm not sure we can budget $1500 for this". Don't bill hourly! I know this sounds like a very silly example (it's not even logically coherent) but reasoning like this gets deployed all the time , even with sophisticated clients. People have anchoring price points for hourly rates that they don't have for other billing structures. Fixing this to make more mo…
Just thinking out loud here (haven't tried this) but maybe a better approach would be to not mention time. Simply ask for project specs and break it down into priced components if need be. $1500 at $100 an hour sounds expensive if you're comparing to the CEO's salary. But $1500 for a piece of sales lead infrastructure that has to be built but can't be off the shelf bought. That sounds reasonable.
That's fine, if you're sophisticated. Certainly I think fixed-price bids are smarter than hourly billing. In a fixed-price bid, you get to describe the business impact of what you're doing, which can be huge even if the task is relatively simple, and then put a dollar figure next to that impact. Almost any number you come up with is going to at least sound sane in that context. It's the more favorable setting in which to present the comparison of value and price.
What I like better though is the hybrid approach. I still remember someone on HN saying that this was the first original approach they had heard to pricing consulting work --- which blew my mind, since it was simply the way I was taught by my partners to bid projects, and presumably the way they were taught as well.
The approach is this:
Come up with a fixed price for the work you want to do, and simultaneously an estimate of the number of days you believe that work will take. You can divide the former by the latter to arrive at a daily rate. In your bid, focus on the total price of the engagement, but "show your work" in terms of the number of billable days and your day rate. Include a clause stating that overages will be billed at that daily rate as well.
To most clients, this is the moral equivalent of a fixed-price bid, and they'll treat it like one. But it de-risks the project for you.
As you do more projects, you'll get a better sense of what your real daily rate is (it's higher than you think it is now). You can tune your bids so that you keep a fixed daily rate but still value-price your engagements. By the time you're routinely employing this kind of finesse, you'll have enough traction to easily figure these kinds of things out for yourself.