The Value-Led Agency

For many advertising agencies, the hourly revenue model is getting old. The best shops are pushed to do more than execute tasks–they’re expected to drive value. That’s certainly my goal. Value to the client’s business, and value to my own agency business. So, the work is underway now–at our shop and others–as we evolve to modern pricing models that better align goals and compensation between client and agency. It’s a significant shift. One that’s as energizing as it is challenging. And it has the power to transform the way we do business for the better.

From Selling Time to Selling Value

The agency world was once a haven of commissions tied to media spend. Simpler times, maybe. But by the late ‘80s, cost-cutting and procurement departments arrived on the scene, and hourly billing became the new norm. The problem? While it might make sense on a spreadsheet, the hourly system only focuses on the cost of the time required to complete work rather than the value of the actual outputs and outcomes delivered. This traditional approach, based solely on the input, ends up commoditizing agencies–where teams’ unique skills, creativity, and insights get boxed into time blocks. It’s outdated, and it’s hurting the bottom line, making it hard for agencies to sustain growth while keeping great talent on board​​.

Shifting to a value-led model is more than just trying out a new billing method; it’s a mindset shift. And I’ll tell you, really putting this model into practice can be both exciting and humbling. It requires a clear understanding of what clients really value and then determining what our work is truly worth in that context. The shift in how we talk about value internally and with clients has been powerful and, honestly, overdue. We should no longer be selling time, but rather solutions and results. The value-led pricing approach lets us put a price on the outputs and outcomes we deliver, not just the hours it takes us to get there. But let’s be real: adopting this approach requires diving deep into what our clients need and exactly what kind of results drive them forward. It requires a mutual understanding of success at the start of every major engagement​​.

As we make this transition, here are a few principles guiding the process that have stuck with me:

Start with the “Scope of Value”

If there’s one thing I’ve learned, it’s that the first step is all about value discovery. So, we start with a scalable “Success Workshop” with our clients to get everyone on the same page about what results we’re aiming for. Instead of taking their objectives at face value, we dig deeper. What are their real goals, and how can we get them there faster? This exercise gives us greater insight into what our own work is truly worth to clients​.

Build a Portfolio of Pricing Options

Imagine if every agency offered only one pricing structure. Yet that’s exactly what most of us have done with hourly billing. Now, we’re building a diversified portfolio of pricing options—retainers, project fees, commissions, subscriptions, licensing, and even outcome-based fees & bonuses. This variety allows us to better adapt to client needs and smooth out potential peaks and valleys for the agency. It also gives clients options, making our services accessible without discounting our work​.

Output Over Effort

As straightforward as it sounds, focusing on outputs and outcomes instead of hours can be transformative. Clients don’t care about our timesheets; they care about what we’re actually helping them achieve. By moving to an output-based structure, our pricing aligns with results rather than tasks. And the best part? When we deliver quickly and effectively, we’re rewarded for it instead of penalized ​.

Bring the Whole Team Along for the Ride

A value-led model requires full-team buy-in. People need to understand and believe in this approach for it to be successful, so we must give everyone the tools to measure and communicate value. To help, we established a Value Council—a cross-discipline team charged with ensuring value-based principles don’t just stay on the whiteboard but are implemented across the agency.

Rethink Client Dialogue

I’ll admit, this one was an adjustment. We’re accustomed to talking about cost with clients because that’s what they’ve come to expect. But switching to a value-led model requires changing the conversation. In fact, it means changing our entire vocabulary. Instead of talking about hours or fees, we’re talking about the deliverables we’re responsible for and the results we’re setting out to achieve. And that inevitably has the power to move the conversation up the chain, connecting directly with economic buyers instead of procurement teams who are often focused on numbers instead of results​.

What Lies Ahead

Like many others, we’re only just beginning this journey. The shift to value-led pricing represents not just a new way of billing for services, but a change in the very nature of our partnerships with clients. As agencies focus on driving more measurable outputs and outcomes, we expect to see even stronger, longer-lasting relationships—ones built on trust and shared success. Value-led pricing, while a challenging transition, offers a way for agencies to break free from the self-imposed ceilings of hourly billing and thrive as strategic partners.

It’s a way to elevate the work we do, to build teams and client relationships around trust and results, and to create a sustainable path forward. We’ve got a long road ahead, but I’m convinced it’s the right one. So, if we want to lead, let’s lead with value.