Glossary
Blended rate
A blended rate is a single hourly or daily rate that represents a weighted average across all the roles involved in delivering a project or account. Instead of presenting clients with separate rates for each role, agencies using a blended rate charge one consistent price per hour regardless of which team member is working. It simplifies pricing conversations and billing, at the cost of some transparency.
How blended rates are calculated
A blended rate is calculated by estimating the mix of roles needed for a project, then calculating the weighted average of their individual rates. A project that is 20% director time, 50% senior consultant time, and 30% analyst time would have a blended rate that reflects those proportions.
Blended Rate = Σ (Role Rate × Role % of Time) / Total Time
Example: (20% × £185) + (50% × £140) + (30% × £80) = £37 + £70 + £24 = £131/hour blended rate.
When to use blended rates
Blended rates work well for retainer agreements and longer-running engagements where the team mix is stable and predictable. They simplify monthly invoicing and make it easier to build client budgets.
They are less suitable for projects with highly variable team composition, since a project that ends up using more senior time than planned generates less margin at the blended rate. Role-specific rates give more accurate financial control in those cases.
Blended rate vs rate card
A rate card lists individual rates per role. A blended rate combines those into a single number for a specific engagement. Both can coexist: the rate card is the internal pricing reference, and a blended rate is what is agreed with a specific client for a specific type of work.
Example
An agency proposes a retained brand consultancy service at a blended rate of £145/day. The underlying team mix is 30% partner (£250/day), 50% senior consultant (£160/day), and 20% project coordinator (£90/day). The weighted average comes to ((30% × 250) + (50% × 160) + (20% × 90)) = £75 + £80 + £18 = £173/day. The agency is proposing below its weighted cost average, which they plan to offset by delivering more efficiently at scale.