A blended billing rate combines different individual rates into a single rate, making it easier to price engagements and communicate costs to clients.
How to Calculate Blended Rate
Blended Rate = Total Billable Revenue Γ· Total Billable Hours
Or for a team: Blended Rate = Ξ£(Individual Rate Γ Allocated Hours) Γ· Total Hours
When to Use Blended Rates
- Fixed-fee projects: Simplifies internal cost estimation
- Client negotiations: Provides a single number for discussion
- Budgeting: Easier forecasting with one rate per practice
- Benchmarking: Compare your rates to market averages
Typical Blended Rates by Industry
| Industry | Typical Blended Rate |
|---|---|
| Strategy Consulting | $250-400/hr |
| Management Consulting | $175-300/hr |
| IT Consulting | $150-250/hr |
| Marketing Agencies | $125-200/hr |
Optimizing Your Blended Rate
- Staff mix: Leverage junior resources for appropriate tasks
- Rate reviews: Annually review and adjust individual rates
- Specialization premium: Charge more for niche expertise
- Efficiency gains: Use technology to deliver faster at the same rate