Pricing: Contingency vs Flat Fee vs Hourly

I've been doing 50% contingency on refunds and savings for the first 12 months. A prospect just pushed back hard saying that's too rich and asked if I'd do a flat fee instead. What pricing models are you all using and how do you handle pushback on contingency rates?

50% on refunds plus 50% of 12 months savings is pretty standard for our industry. When prospects push back, I explain the math: if I find nothing, they pay nothing. The contingency fee is the premium they pay for zero risk. A flat fee means they're paying even if I find nothing. Most people prefer the contingency once they understand the risk transfer.

I've started offering a hybrid model for larger clients: 40% contingency on retroactive refunds, 25% of the first year's ongoing savings. The lower rate on ongoing savings makes it more palatable for big accounts where the monthly savings are substantial. My largest client was paying $11,000/month more than they should have been - 50% of that for 12 months would've been $66K in fees which felt excessive even to me.

I tried hourly once for a property management company that wanted a fixed cost. Charged $150/hour and ended up doing about 40 hours of work. They paid $6,000 and I found $180K in refunds. If I'd been on contingency at 50% I would've made $90K. Never doing hourly again.

The contingency model is what makes this business accessible and marketable. It's your biggest selling point: no risk to the client. When someone pushes back on the percentage, I'd rather negotiate the rate down slightly than switch to a completely different model. Maybe go to 40% contingency instead of flat fee. You're still aligned with the client's interests that way.

Good points all around. I think I'll stick with contingency but offer a sliding scale - 50% on the first $50K recovered, 40% on the next $50K, 30% above that. Makes it fair for the big finds without switching models entirely.