I sold my first logo for £150. Three hours at £50 an hour. Simple maths, simple transaction. By the time I exited my agency, brand projects were selling in the £15,000 to £20,000 range. The work itself had not changed that dramatically. What changed was how I priced it.

Most agency owners start with hourly rates because they are easy to calculate and easy to explain. That is fine for the first year. But if you are still pricing by the hour at year three, you are leaving serious money on the table.

Here are the four pricing models that work for creative agencies, when to use each one, and how to transition from the one that is holding you back.

Model 1: Hourly Rates

How it works: You charge a fixed rate per hour of work. Track your time, multiply by your rate, invoice the total.

Best for: Freelancers and solo operators in their first year. Ongoing support work where the scope is genuinely unpredictable. Ad-hoc tasks that do not fit a project scope.

Typical UK rates (2026):

Why agencies outgrow hourly

Hourly pricing punishes efficiency. The better you get at your craft, the less time it takes, and the less you earn. A logo that took you 20 hours in year one takes 5 hours in year five. Your skill increased. Your revenue per project dropped by 75%.

Hourly pricing also creates a ceiling. There are only so many billable hours in a week. If your rate is £80 per hour and you bill 30 hours a week, your maximum annual revenue is about £125,000. No amount of skill improvement changes that maths.

Use hourly pricing to learn your workflow and understand your costs. Then move on.

Model 2: Project-Based Pricing

How it works: You quote a fixed price for a defined scope of work. The client pays the same regardless of how long it takes you.

Best for: Defined deliverables with clear scope. Branding projects, website builds, campaign creation. Any work where you can predict the effort within a reasonable range.

Typical UK ranges (2026):

How to price projects

Do not calculate your hours and multiply by your rate. That is just hourly pricing with a fixed number on top.

Instead, price based on three factors:

  1. Your cost of delivery. What will this actually cost you in time, tools, and team?
  2. The market rate. What are comparable agencies charging for similar work?
  3. The value to the client. What is this work worth to their business?

Start with your cost of delivery to set the floor. The market rate tells you where the middle is. The client’s value tells you where the ceiling is.

The win rate test

Track every proposal. If you are winning more than 70% of your quotes, your prices are too low. You should be testing the ceiling constantly. With every major project we won, we increased the quote on the next comparable project by £500 or £1,000. We kept doing this until someone said no. Not scientific, but effective.

Scope creep prevention

Project pricing only works if you define the scope clearly. Include in every proposal:

Without these boundaries, fixed-price projects become unlimited-scope disasters.

Model 3: Monthly Retainers

How it works: The client pays a fixed monthly fee for ongoing services. The scope is defined per month rather than per project.

Best for: Ongoing design support, marketing management, website maintenance. Any service where the client needs regular access to your skills.

Typical UK ranges (2026):

The retainer tier model

Not all retainers should offer the same thing. Separate your offering into two tiers.

Support tier: Reactive work. Bug fixes, small updates, keeping things running. Lower price point. No strategy, no accountability.

Scale tier: Proactive work. Monthly reviews, strategic recommendations, improvement roadmap. Higher price point. You are accountable for results.

The distinction prevents the most common retainer problem: clients expecting strategy at support prices. When a Support client asks for strategic input, you have a clear response. When a Scale client asks for a full rebuild, you have a clear boundary.

Building a retainer base

The single most important thing retainers do for your agency is create a revenue floor. If your monthly fixed costs are £15,000 and your retainer base covers £12,000, you only need to sell £3,000 in project work to break even. That changes every decision you make.

Start by offering retainers to your best project clients after delivery. “We’ve built this for you. To maintain it and keep improving it, we recommend our monthly support plan.” The transition from project to retainer should feel natural, not like a new sales conversation.

The workstream-first approach

For new clients, do not lead with a retainer proposal. Lead with a defined project (workstream) at £2,000 to £3,000 that fixes their most pressing problem. Complete it in 2 to 4 weeks. Then transition to a retainer.

This prevents the month-one overdelivery problem. If you sell a retainer first, you spend the first month doing foundational work that should have been a separate project. The client sees a busy first month and expects the same every month. Workstream first, retainer second.

Model 4: Value-Based Pricing

How it works: You price based on the commercial outcome the work creates for the client, not the time it takes or the deliverables involved.

Best for: Brand strategy, repositioning, strategic consulting. Work that directly affects the client’s revenue, margins, or valuation. Established agencies with strong case studies and proven results.

How it differs: A website redesign priced at £8,000 is project pricing. The same website redesign priced at £25,000 because the client’s current site is losing them £200,000 per year in missed conversions is value pricing. The deliverables are the same. The price reflects the impact.

How to have the value conversation

You need to understand three things before quoting:

  1. What is the problem costing them? “How much revenue do you estimate you’re losing because of [the problem]?”
  2. What is the value of solving it? “If this was fixed, what would the impact be on your business over 12 months?”
  3. What have they budgeted? “What range have you set aside for this project?”

Our brand work helped one client grow from £50M to £60M in the year after rebranding. While our delivery was just one element of their overall business change, the commercial framing justified a premium price. That is value pricing in action.

When value pricing goes wrong

Value pricing does not work when:

Do not force value pricing on every project. It works for strategic work with measurable outcomes. For routine production work, project pricing is still the right model.

Transitioning Between Models

Most agencies use a mix of models simultaneously. Here is the typical progression:

Year 1 to 2: Primarily hourly. Learning your workflow, building your client base. Use hourly pricing to understand how long things actually take.

Year 2 to 4: Shift to project-based. You know your costs well enough to quote fixed prices. More profitable because efficiency gains benefit you, not the client.

Year 3 to 5: Add retainers. Convert your best project clients to monthly relationships. Build the recurring revenue base that creates stability.

Year 5 plus: Introduce value-based for strategic work. You have the case studies, the confidence, and the client relationships to command premium pricing.

You do not abandon earlier models as you add new ones. A mature agency might price strategy engagements on value, production work on project rates, and ongoing support on retainers. The skill is knowing which model fits which situation.

The Pricing Conversation

The biggest barrier to better pricing is not the market. It is the conversation. Most agency owners avoid talking about money because it feels uncomfortable.

Here is a simple framework:

  1. Understand before quoting. Never price before a discovery conversation. You need to understand the scope, the timeline, the value, and the budget.
  2. Present options. Give two or three options at different price points. This shifts the conversation from “yes or no” to “which one.”
  3. State the price confidently. If you flinch when you say the number, the client will flinch too. Practice saying your price out loud until it feels natural.
  4. Let them respond. After stating the price, stop talking. The silence feels uncomfortable but it gives the client space to process.

What to Do This Week

  1. Calculate your effective hourly rate. Take your revenue from last month. Divide by the total hours worked (not just billable hours). If the number is lower than your target hourly rate, your pricing model needs work.
  2. Identify one project to reprice. Look at your most recent quote. Could you have charged 20% more? 50%? What would need to change in the proposal to justify the higher price?
  3. Start tracking win rates. Log every proposal you send and whether it was won or lost. In 3 months, you will have the data to know whether you are pricing too low.

Further Reading

For profitability benchmarks across agency types, read the creative agency margins guide.

If cash flow is the issue rather than pricing, see how to improve cash flow in your agency.

Take the free Agency Valuation to understand how your pricing and profitability score against the 7 factors that determine what your agency is worth. Pricing structure directly affects your valuation multiple.

If you want structured support to fix your pricing, the Strategic Growth Programme covers commercial strategy as part of the 12-month framework. Book a discovery call to discuss your situation.