Insights From Leaders of 3 Value-Led, Timesheet-Free Agencies

As many agencies wrestle with the limitations of a time-based revenue model, other firms have been embracing alternative compensation structures that prioritize value, performance, and outcomes. To help more agencies make this transformative shift, I spoke with the leaders of Hard Numbers, Bullish, and FIG to gather their experiences and advice for others to learn from. They have successfully transitioned their firms from billable hours and timesheets to a value-led model and are reaping the benefits of their forward-looking approaches.

Here is what each had to share.

Darryl Sparey of Hard Numbers

My first conversation was with Darryl Sparey, Co-founder and Managing Director of Hard Numbers, a UK-based performance-driven marketing and communications consultancy specializing in PR that drives sales.

Hard Numbers' engagement model is based on agreed-upon deliverables and outputs, with fees tied to these quantifiable measures rather than billable hours. This approach aligns the agency's interests with those of its clients and fosters a culture of efficiency and continuous improvement.  

"We are different by design," explained Darryl. "We do not sell time; we sell results." In doing so, he emphasized, "We have an incentive to get quicker, better, faster at doing what we do. If you sell your service by the time it takes to deliver, you have no incentive to do that efficiently, ever. In fact, your incentive is the reverse."

Selling results, not time

Several factors led to Darryl’s decision to abandon billable time and timesheets. 

First, timesheets were often inaccurate, with around 50% not being filled in correctly each month, causing people to retroactively try to recall what they worked on weeks prior or to copy timesheets from previous months. "That's not data I can use to make forecasts or business decisions or give to a client," said Darryl. Instead, Hard Numbers uses a CRM platform as their internal engine for their work, automating the tracking of billable outputs and outcomes.

Second, Darryl found that clients didn't care about the time spent but rather the outcomes delivered. When a particular client conversation focused on timesheets, his client clarified that they weren't buying the agency's time; they were buying outcomes. Of course, not all clients share this mindset, leading to the next point.

Based on Darryl's history in sales and procurement-led processes, he knew that providing hourly rates to procurement would give them leverage to push for lower costs. Throughout his career, Darryl observed that procurement professionals follow a specific approach to negotiating with agencies for the best price. He explained that procurement professionals seek to acquire three to five quotes from different suppliers. They identify the best quality supplier the internal buyer wants to hire and the cheapest. Then they go to the selected provider to say, "We've shortlisted two, and here are the rates from the other (cheaper) agency."

Darryl pointed out, "Once you give a procurement person a unit rate or hourly costs to procure your service, you are handing them a stick to beat you with; you're allowing them to find the lowest common denominator to pressure you into similar pricing."

Lastly, Darryl saw AI and automation as another looming factor that, in his estimation, would disrupt 70% of what PR professionals spend their time on today, so continuing to sell hours rather than value would be untenable.

Darryl’s advice for agencies

Transitioning away from billable time can be challenging, mainly when dealing with procurement departments accustomed to the billable hours paradigm. Darryl shared an instance where Hard Numbers lost a pitch due to their refusal to provide hourly rates and salary bands. "We just don't play that game," he asserted. "And I will continue to lose business due to that policy. But guess what? I win more substantially than I've lost."

According to Darryl, the key is unwavering commitment to the model. "You have to commit, and you have to commit 100%. There's no half-stepping. There can be no, oh, we'll do it for this one client." By standing firm in their approach, Hard Numbers has attracted clients who value their expertise and the outcomes they deliver rather than fixating on the time spent.

Michael Duda of Bullish

My second discussion was with Michael Duda, Co-founder and Managing Partner of Bullish, who echoed the importance of selling impact over time. 

Bullish employs a hybrid model, combining deliverable-based compensation with performance-based elements.

When the firm opened its doors in 2015, the goal was to have skin in the game with every client. On our call, he emphasized the commitment to this goal by proudly displaying a patented trademark as "The Most Dangerous Agency in America" because "we're the only ones built to lose money." 

"We were surprised to see big companies wanting to work with us," he continued, "Part of it was having the guts to put our money where our mouth is."

The impact of aligning compensation with client success

Michael observed, "Many agencies say they get hired for great breakthrough thinking, and that might be true, but the ones that use billable time are ultimately paid for the hours it takes to create outputs, and therefore, there is no correlation to the outcomes." 

"On the client side," Michael continued, "the performance of VPs of marketing or any other client stakeholder isn’t measured by how good an ad is; their performance is measured by how well their company does as a result—whether it's by stock performance, sales, or anything else."

By aligning Bullish's compensation with the success of their clients' businesses, the firm has cultivated a culture of curiosity, problem-solving, and adaptability. Staff are empowered and encouraged to explore and challenge ideas to drive meaningful results for clients. This mentality stems from the agency's mission “to change the world of consumer investing” and demonstrate that marketing can be a powerful driver of growth and value creation, not just a cost center. They've designed their agency's model to make that happen most effectively. 

"People buy into a collective ambition," Michael shared. "We think Bullish is an unlock for people to do the best work of their career and be something they didn't realize they were capable of."

Bullish's approach has attracted ambitious clients who appreciate its commitment to their success and enabled the agency to provide diverse experiences for its talent. 

MICHAEL’s Advice for agencies

When asked about how Bullish responds to clients who insist on timesheets, Michael was clear about their stance: "We just don't do them. We said we don't do timesheets, we don't do it. It'd be erroneous to do it."

Michael acknowledged that this approach might lead to a loss of some business in the short term but emphasized the importance of standing firmly committed to the model. "I have tons of back-and-forth and difficult conversations with Walmart, Pepsi, and some with Anheuser Busch. But ultimately, at the end of the day, there are champions in the organization who want to solve a particular problem."

Michael advises any agency facing client pressure to use timesheets to remain true to their principles and not compromise on their pricing model, even if it means potentially losing some business. 

"No one forces you; you can always say no," he shared. "I know it's easier said than done. But I've always believed you're defined by the company you keep. If we allowed clients to treat us like crap, then we'd lose a lot of people." 

Michael suggests agencies transitioning from time to value should focus on finding clients who align with their approach and are willing to engage in a partnership based on outcomes rather than hours. By staying committed to their model and delivering exceptional results, agencies can attract like-minded clients and build a sustainable, value-led business. 

"It can be done. It's not that hard, but it takes conviction. If you're on the front end of a procurement-led process, that's more difficult. But when it's downstream after proposals and showing how you work, usually it's a game you can win."

The way forward is to maintain conviction, stay true to your agency's position, and focus on delivering value to clients, even under pressure to conform to traditional pricing models.

Richard Tan of FIG

My third discussion was with Richard Tan, CFO and Partner at FIG, who also sits on the Association of National Advertisers (ANA) task force for alternative pricing. 

When I spoke with Richard, FIG had recently shifted to an approach where they assign value to different project components and milestones and recognize revenue as each part is completed rather than tracking time. 

Focusing on the right things

Richard explained that agency timesheets were often inaccurate and failed to measure the true value of the work being delivered. "Apart from the fact that we all know that timesheets are inaccurate, they're no measure of value. They don't get completed properly, and they certainly don't get completed on time." 

He also noted that agency staff spent too much time and effort thinking about the hours rather than focusing on delivering quality work on time. "A lot of agency people were spending too much effort thinking about the time spent or hours required in the future, chasing timesheets, and reporting at a hugely detailed level, but what we were missing were the key facts: is the work getting done on time when clients needed it actually to get done?" 

FIG experimented with a new approach to address these challenges, assigning value to project components and recognizing revenue as each part is completed. "We look at a project and say, what are the things that we need to do to be able to deliver this project, and by when do they need to be done?" Richard explained. "Our project managers map out the time frame, and then, as an agency, we assign value to those different parts based on the overall price for the work. Internally, we recognize revenue as those parts become completed."

FIG’s shift has led to a greater focus on value and outcomes, productivity and accountability, transparency, and client satisfaction. Richard noted, "It's amazing, just mentally, the value that we see from the mind shift. Our project managers have increased their productivity and capacity because they no longer spend time thinking about hours. Instead, they're thinking about the basic elements: Is work getting done to the quality we need?" 

Richard’s advice for agencies

Richard acknowledged that their journey away from billable time has not been without obstacles when working with client-side procurement professionals. He pointed out, "I think that's certainly the biggest challenge. The bigger the organization, the harder it is for them to change. But our clients and other progressive companies certainly look at it differently and understand the value equation."

Overcoming resistance from procurement departments and educating clients on the benefits of alternative compensation models will be critical as more agencies transition from billable time to value-led models. Agencies must be prepared to articulate a unique value proposition, demonstrate the outcomes they deliver, and maintain transparency throughout an engagement.

What does this all mean?

The experiences shared by Hard Numbers, Bullish, and FIG demonstrate that abandoning billable time and timesheets is feasible and transformative for agencies willing to embrace change. By focusing on value, performance, and outcomes, these leaders have not only improved their operations and profitability but also elevated the level of service and impact they deliver to their clients.

For agencies considering the transition, the path forward is clear:

• Articulate a unique value proposition.

• Focus on the outcomes you deliver.

• Commit fully to the model.

• Communicate transparently with clients.

• Adapt your internal processes to support a focus on value and outcomes.

As the industry continues to evolve, the firms that adapt and embrace this shift will be well-positioned to thrive in the years ahead.