Moving a VA agency off hourly seats onto per outcome pricing, and where the math gets uncomfortable

The volume risk is priceable, it just has to be charged for. A floor plus per-unit above it is how most placement businesses handle exactly this. What is not priceable is the definition fight. Write the qualification criteria as a checklist both sides sign, and put a monthly true-up in the contract, or every invoice cycle turns into an argument.

Disputed leads tend to be the first failure point in a deal like this. A vendor bills for a set number, the buyer says a lower count actually met the criteria, and they settle somewhere in between with both sides feeling shortchanged. That usually shows up within the first couple of months.

@angela_burke a 41 percent gross margin is the number to hold onto through a pricing transition, because a per-lead price quoted at current volume is anchored to the one input that isn't controllable. Running it at 60 percent of that volume is the real test. If the quoted rate at 60 percent volume doesn't cover the seat plus tooling cost, the structure only works in good months. The other thing hourly billing provides that per-outcome doesn't is a cap on loss equal to labor actually spent. Under per-outcome pricing, a bad list means a full week of work producing units that can't be billed.

The separate tooling line seems cleanest to me but I'd expect clients to ask why they can't just buy the tool themselves.

@mitchell_ray4 that's exactly what happened to a vendor I talked to. He itemized the software, the client priced the software, and the client discovered it was $99 a month. The itemized version made the markup visible in a way the blended rate never did.

A hybrid model tends to outperform each of the other three in practice. A base retainer covers the fixed cost of holding trained people, and per-unit pay above the floor rewards the good months. The thing worth warning @angela_burke about is internal, not financial. Teams that move to per-unit pay often change behavior within weeks, optimizing for the countable thing and dropping the uncountable things nobody had written down, like flagging a lead as probably litigious. That kind of drift can take a quarter to notice.

@monica_tran3 that's the detail I'll remember out of this whole thread. The metric becomes the job, and everything outside it stops happening.

Per-outcome works where the outcome is countable and singular. Intake, appointments set, files moved to closing. It falls apart on anything that is judgment or coverage, which is most of what a PM assistant needs to provide. If seven seats are not all doing countable work, they should not all be priced the same way. Split the book.