Fixed Fee or Day Rate: Resolve a Proposal Pricing-Model Objection

Understand the situation before responding

Ask whether they want budget certainty, transparent effort, flexible scope or an easier procurement comparison. A fixed fee depends on defined obligations and assumptions. A day rate describes time pricing but does not itself establish the total cost or result. Do not portray one model as universally fairer. Review the level of uncertainty and who controls inputs, decisions and changes before offering an alternative.

An example message to adapt

Is your main concern the total budget or flexibility as the work develops? The fixed fee covers [defined scope] under [assumptions]. A time-based option would need an agreed working limit, priorities and review points. We should compare those responsibilities, rather than assuming dividing the fee by a day rate produces the same offer.

Illustrative teaching example. Replace the prompts with buyer-confirmed facts; this is not a client conversation, claimed result or message to send automatically.

Prepare a useful next action

Explain what is included in each model and how additional work would be agreed. For time-based work, define reporting, approval of further time and what happens at the agreed limit. For a fixed scope, clarify client dependencies, acceptance and change handling. Include ongoing support and expenses where relevant. Use a realistic estimate rather than an artificially low number designed to make the alternative look attractive.

Record the decision and its limits

Offer the model you can manage responsibly. If the buyer needs certainty that the current scope cannot support, propose a separate discovery stage or a narrower commitment with clear boundaries. Confirm the selected model in the commercial document and withdraw contradictory versions. A pricing-model change should resolve a known concern, not conceal uncertainty about what is being bought.