Pricing, profitability & predictions with Karl Sakas

Karl Sakas Guest

What if you could charge more, and keep your best clients happy?

Karl Sakas has spent over 20 years in agency operations and consulting, helping more than 600 agencies shift from reactive to strategic. In this episode, he joins us to break down why pricing isn’t just about numbers – it’s an ops play, and one that can define your agency’s future.

Here’s what we get into:

Why time & materials pricing is on the way out, and what to do instead
How to use “value anchoring” as a bridge to value-based pricing
How to strategically churn clients that are holding you back
Why you should consider raising your prices annually
Why AI tools shouldn’t just make you faster, but more profitable too

Whether you’re raising rates, tightening up scope, or exploring performance-based models, this episode is full of sharp, practical insights to help you price smarter and scale with confidence.

Key Takeaways:

Most agencies underestimate the impact of pricing on operations. Pricing isn’t just a finance decision, it shapes delivery efficiency, team workload, and long-term profitability.
There are three key levers to improve delivery margins: pricing, scope, and scope management. Nail these, and you’ll protect profitability without changing your team structure.
Time and materials pricing is losing relevance. With AI and IP-based work increasing, value-based or fixed-fee models better reflect the true value agencies deliver.
Value anchoring is a practical bridge to value-based pricing. Start by framing your fees as a small percentage of the client’s potential upside, even if you’re not yet charging performance-based rates.
Scope creep kills margin. Agencies often overdeliver because they struggle to push back. Effective scope management means giving clients clear options, like shifting timelines, adjusting budgets, or deferring work. So it’s not just a hard “no,” but a strategic “here’s how we could make it work.”
Not every client is worth keeping. Strategic churn – raising rates or changing terms to move on from bad-fit clients – can free up resources and improve team morale.
Raising prices is easier with new clients, but you can also raise them for existing ones. Use anchoring, loyalty discounts, and phased increases to make it work.
Not all clients should get the same price increase. A portfolio approach lets you raise prices strategically – rewarding loyalty, protecting relationships, and phasing in higher margins where it makes sense.
Profit leaks often go unnoticed. If your net margins are under 20% after fair owner compensation, it’s time to look at labor ratios, overservicing, and pricing discipline.