Why You Should Pitch Retainer Agreements - RD255

Do you pitch retainer agreements to your clients?

In the Resourceful Designer Community Slack group, we have a channel called #Bragging-Rights. It's a place where community members share their most recent wins. Things like Katie telling us her client approved the logo she asked us to critique a few weeks ago. Or Brian sharing the completion of a huge website project with an extremely tight deadline. Or Mike sharing yet another signed design proposal.

Whether it's landing a new client or having their design business showcased in a magazine, everyone in the Community is genuinely happy for the person sharing the good news. That's what being part of a community is.

But nothing seems to garner more congratulations than when someone says they've landed a new retainer client. We don't even have to know the details. The fact that it's a retainer client is huge and worth celebrating on its own.

You see, having a client on retainer is considered the pinnacle of client acquisition.

What is a retainer agreement?

So what does having a client on retainer mean?

• It means guaranteed work.
• It means guaranteed income.
• It means a fixed schedule.
• And most importantly, it means better clients that you can create long-lasting relationships.

A retainer means your client pays you in advance, regularly, in exchange for whatever work you outlined in the retainer agreement.

You see. One of the drawbacks of being a freelance designer is the unpredictability of income. You don't work a 9-5 at a set hourly rate. Nor are you working in a salaried position with a guaranteed income. There's no predictable paycheck arriving on a fixed schedule. That's one of the sacrifices we home-based designers make for the freedom of working for ourselves.

But a retainer brings us closer to that predictable, guaranteed income. It creates a steady cash flow you can count on. This is great since you know how much money you are guaranteed every month, which helps with monthly expenses.

Not only that. But a retainer helps provide both stability and consistency in your work instead of learning how to deal with new clients every project. It reduces the need to pitch and win new design projects constantly.

On top of all that, Retainer agreements attract better clients and allow you to build a deeper relationship with them. Plus, clients treat designers they have on retainer with more respect and as an expert and professional.

These clients understand the long-term benefit of working with you. They are not looking for the least expensive designer. No, they're looking for someone who can consistently contribute to their business. They want an expert and are willing to invest in one.

Another benefit of retainers is your schedule. In most cases, you know in advance how much work you will have from your retainer clients every month. This makes it much easier to plan your schedule. If you're contracted to create a weekly blog post image and want to take a two-week vacation. You know in advance that you need to create three images the week before you leave.

Knowing your schedule in advance allows you to manipulate it when needed.

How does a retainer work?

A retainer is a contract between you and a client that states the service or deliverable you will provide them regularly in exchange for how much.

Most retainer agreements work monthly. A client pays you a fixed fee every month in exchange for what you provide to them.

You can also have a yearly retainer payment where the client agrees to pay for the full year in advance. Or a lump-sum payment where the client pays you a certain amount, and you work it off or supply deliverables until the money runs out, at which time the agreement is ended or starts over.

Retainer benefits to the client

Why are retainer agreements appealing to clients? Oftentimes, retainers have built-in discounts that make them more appealing for the client.

For example: If your rate is $100/hour, you might offer a retainer of $900 for 10 hours of work each month. Your client saves $100 each month, and you sacrifice $10/hour in exchange for the guarantee of payment.

If you don't charge by the hour, you can set up retainers for deliverables.

For example, you agree to create four blog post images and 16 social media images every month for a fixed rate of, let's say, $500 per month. The client can then budget $500 every month knowing you will deliver the images. It gives them peace of mind knowing it's taken care of.

How do you pitch a retainer to a client?

The idea of pitching a retainer to a client can seem scary if you're not used to it, especially if the client came to you with only one project in mind.

The trick is to determine what value you can provide to the client beyond the project they brought to you. What service or deliverables can you provide them regularly that benefit their business?

Some things to consider could include.

• Monthly newsletters
• Marketing campaigns
• Social media imagery or posts
• Blog post images
• The list is endless.

Website maintenance plans are a form of retainer. You agree to update, backup, protect and upkeep the client's website for a fixed monthly fee. Web maintenance plans are a great form of a retainer and guaranteed income.

For any retainer to work. The client needs to understand the value and be able to explain it to others within their organization.

Get to know the client.

Before you pitch a retainer to a client, you need to get to know them and their business and figure out how you can use your skills to advance their interests.

Luckily, getting to know the client is part of any good project brief and discovery meeting. While you are prepping your project proposal, you should also be looking for ways to help the client beyond the project.

Do they have a monthly newsletter? If so, is there any way you can help them with it? And if not, could they benefit from one?

Are they active on social media? If so, who handles it for them? If it's an employee, could you take that off their hands and allow the employee to be better spent their time on other aspects of the business?

The more you understand about the client and their business, the easier it will be to figure out how a retainer agreement will benefit them and convincing them you're the person to have it with.

The retainer pitch

Once you've figured out how you can help the client on an ongoing basis, it's time to pitch your retainer idea.

Some designers like to pitch the retainer idea as part of the project proposal. In comparison, some like to bring up the idea after pitching the project. There is no right or wrong way to do it.

I prefer to do it at the beginning myself. I personally think it helps build some credibility by showing the client you're not just in this for the one project, but you are willing to build a long-term relationship with them.

This works especially well with website projects. You can show that you will understand the client and their needs by the end of the web project, allowing you to better support the website you build for them and provide some ongoing support to help them grow after the launch.

Bringing up the retainer agreement at the end of the project also works since the client has had a chance to get to know you and see how you work and can see the value you can bring to their business.

So there's no right or wrong way as long as you do it.

How to structure a retainer agreement

The two most popular forms of retainer agreements are for deliverables or hours.

A retainer agreement for deliverables means the client pays you a certain amount in exchange for a fixed number of deliverables, such as social media images. This allows you to bill for the value of the actual work you create, not your time.

When using this method, it's important to clarify a fee should the client require more than the allotted number of deliverables or what happens should the client not require the full amount that month.

The second option is a retainer agreement for a fixed number of hours per month. When choosing this method, it's important to determine what happens should you need to go over the allotted hours or what happens should you not use up the allotted hours. Are extra hours billed at a discounted rate or your standard rate? Are unused hours lost or rolled over to the next month?

There is a third form of retainer that is not as popular. That's for a client to pay a monthly fee for priority access to you. This puts you at their beck and call. Meaning they pay you to drop whatever you are doing and work on their project any time they need you.

I don't recommend this third option as it could jeopardize your relationships with other clients, especially if you end up missing a deadline because your retainer client needed you.

A Retainer Agreement is a contract.

A retainer agreement with a client is a contract of its own and should be signed separately from any project contract you enter into with the client.

A retainer agreement contract needs to clearly define the work expected of you to prevent scope creep. It also needs to outline exactly what happens should extra work be needed or not enough work in a given month.

The agreement also needs to outline what is not covered under the contract. If your retainer agreement states you provide social media images and the client asks you to design a brochure, for example. Is there a condition for additional work? Or does your agreement stipulate that additions work requires a new contract?

The agreement should also stipulate timelines. If you agree to provide 16 social media posts per month, is that 4 per week or can you provide all 16 by the end of the month?

Retainer Agreement Time Frame

An essential part of your retainer contract is establishing a time period for the agreement. This can be anything you and your client agree upon 1-month, 6-months, 1 year, or more.

Whatever timeframe you chose. Your contract should indicate when you can renegotiate or terminate the agreement. Perhaps you raise your rates every year. Or you realize the work is more involved than you expected and want more compensation. Or, you decide after a time that you no longer want to be doing this kind of work. Make sure you have it in your contract when you can renegotiate or get out of the agreement.

Stipulating a payment schedule for the retainer agreement.

The whole point of a retainer agreement is a guaranteed steady income. To accomplish this, you need to state a payment schedule. Will the client pay a lump sum upfront, monthly, quarterly?

Or perhaps they pay a fixed price per delivery. For example, the client agrees to pay you a certain amount for every 10 blog images you create for them regardless of the time frame.

Introduce retainer agreements to your design business.

That's retainer agreements. As I said at the start, they're the pinnacle of client acquisition. Having several retainer clients can give you peace of mind, knowing you don't have to spend as much time trying to acquire new clients. Instead, you work with a small handful of clients regularly as you build long-term relationships with them. It's a win-win for both sides.

One last thing to remember, Any time you enter into a retainer agreement with a client, there are three parties to consider.

• How does it affect you?
• How does it affect the client?
• And, how does it affect your other clients?

Before you enter a long-term agreement with someone, make sure the work and time commitment won't interfere with your existing clients and commitments.

The next time a client approaches you with a new design project. Take some extra time to figure out how you can help them long term and pitch them on the idea of hiring you on retainer. You never know what will happen.

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