Strongly agree with this, over hourly or project-based. I do monthly instead of weekly, but idea is the same.
One thing I disagree with is the automatic-discount thing. Firstly, I think it's cheesy. Makes me think of street vendors saying "...But just for YOU, I have a SPECIAL price!" Secondly, I think it cheapens the perceived value. As in, "Why is Joe throwing around 20% discounts? Is he desperate? Is he not confident in his abilities?" Etc.