Consulting · Account management

Retainers - How to get the client comfortable?

Liz Williams Princeton Executive Associates, LLC. | Business & Admin. Management for Entrepreneurs & Executives

October 28th, 2015

How are entrepreneurs asking for retainers? It's important for me that my clients see value and convenience in having a retainer. I've created one from reviewing templates. Should I have my attorney write it? 

Braydon Johnson-McCormick Proven CEO, co-founder and practical business strategist for real-world results

October 28th, 2015

Our bookkeeper is on a kind of "value-priced" retainer.  We like it because we get a bunch of services that are lumpy in nature (taxes or quarterly closes for example) and regular support (bill tracking) for a fixed monthly fee. 

For our clients (large enterprises) we have struggled to get them to see value in a retainer unless they have on-going work - in which case we can show them they get more for their money. 

Once you get a client who is willing to do a retainer, you will definitely want a contract.  And I do think that a lawyer (but not a really expensive one) should look it over. Look around the internet, I've seen lots of retainer contracts (for agencies etc). 

Rob G

October 28th, 2015

what's the purpose of the retainer?  why do you want one and why should the client? 

Liz Williams Princeton Executive Associates, LLC. | Business & Admin. Management for Entrepreneurs & Executives

October 29th, 2015

The purpose would be the regular pay and commitment from the client. I have a couple of clients that I've come in and set up their accounts payable. In setting up their books I find that they're slow payers. With a retainer I don't have to deal with that issue. The benefit to the client is my commitment to their organization to get abc done regardless if it takes me ten or twenty hours. They see a level of productivity and ongoing attention. The necessary focus is a selling point. Which in turn makes them comfortable to add more work. Any additional would already be adressed in a clause in the retainer. 
Also I don't believe in the 'use it or lose it' that many retainers carry. I prefer the language similar to a law firms retainer. 

Bill Schick Founder, Long-form and interactive content marketing strategy

October 30th, 2015

One tactic we've used is the "availability" approach. You pay us a retainer, and we guarantee we're available. Don't pay a retainer, and (we say this nicely), it's first come, first served. It puts you in the control seat as opposed to the (I'll do whatever you need for however many hours for a bunch of savings for you). I also find that setting up some sort of autopay (like with a corporate CC) for the first of the month helps. It eases the pain of processing invoices, etc, and it's less in-their-face each month. As long as you do good work and have a good relationship with the client (respectful) this works out well for both of you-minimizing the bad feelings that can naturally occur with retainer work. 

Liz Williams Princeton Executive Associates, LLC. | Business & Admin. Management for Entrepreneurs & Executives

October 30th, 2015

I can handle that approach tactfully. 

Bill Schick Founder, Long-form and interactive content marketing strategy

October 30th, 2015

To actually answer the question in the title, we've never been able to sign a client on retainer that didn't work with us first. So, for new business, I would lead with that. Spend 3 months providing the best service you can, and then introduce "sweetening the pot" and retainer after that. 

Rob G

October 30th, 2015

so is your work typically fixed fee or ?  is the retainer in place of a fixed fee or in addition?  Does the fixed fee buy services or just the opportunity to access services with a certain SLA?  If  your clients clearly see value in having a retainer that exceeds the perceived risks (cash flow, paying for services not delivered, etc.) then how you 'ask for them' would likely be as a normal part of your contract process.  If the real question is 'how do i convince my clients that they should pay a retainer' then that obviously gets into how you articulate your value proposition. i guess i'm still not clear - is your question around how to articulate value or the mechanics of how to present the retainer and word the retainer language? 

Steve Everhard All Things Startup

November 2nd, 2015

So here are the reasons I don't like retainers with service providers where the task is somewhat undefined:
1) Retainers become accepted income and the agency rarely services the client as well as a project based client. It covers overheads and isn't seen internally as pre-payment which leads to overcharging.
2) Whatever the retainer is supposed to cover almost everything requested is an additional cost.
3) Even when I have insisted on timesheets the effort expended rarely matches the billing.
4) Agencies on retainer get lazy and, despite the access argument, a high fee paying project client always gets the talent first, leaving me with interns or juniors.
5) The retainer restricts me from picking the right agency for the job so although the tie-in works for the agency it doesn't work for me.
6) Retainers cause bad relations between the client and the agency as each side feels short-changed. Client relationship management turns into placating the client rather than pitching great work.

For me these are reasons why retainers have failed in the past and may be issues you might need to address. I understand the cashflow issue but if you are honest with your clients and deliver consistently good work they should be prepared to provide part payment upfront on a project. That is a reasonable alternative to a retainer.

Rob G

November 2nd, 2015

@ steven E hit the nail on the head. I bristle at requests for retainers and i have yet to hear a well articulated value proposition. What i often hear is "that's our policy - we don't work without a retainer...".  Usually from law firms.  Perfectly acceptable as long as you are willing to walk away when the customer balks. 

Raghu Ranjolkar Strategic Marketing Consultant

November 19th, 2015

Firstly I beg your pardon to join you.

In my opinion retainer should not be a topic for discussiuon. You are all very well aware of Customer Service and Customer Experince . you excel with these two, customer will never balks and will be more eager to oblige to the retainer without your asking for it. They will take it as a part of regular price.
But first Justify the retainer for its existance.