Get the FREE Freelancer’s ToolkitGet the free toolkit!

How to Implement a Retainer-Based Payment Model

Retainers can be a valuable way to bring in more consistent income, and reduce the feast and famine cycle experienced by many freelancers.

A retainer is a fee paid in advance by a client to secure your services.

There are several different types of retainers and ways to get started, each with it’s own challenges, requirements and advantages.

Want more consistent income in your freelance business? Here's how to implement a retainer-based model.

I generally don’t recommend starting off a new client engagement with a retainer unless you’ve got some experience under your belt. (Aka you’re comfortable with your working process, and can clearly articulate your value.)

Retainers can be tricky, and a certain level of confidence is required to make your clients feel comfortable with this payment model (especially if they’ve previously been used to paying you an hourly rates for services).

You also want to ensure that you’ve established a level of trust with the client before offering them a retainer.

Pros

  • Consistent and reliable cash flow
  • Easier for the client to budget for
  • Predictability of time commitments or deliverables each month
  • Continued ongoing relationship
  • Moves away from trading time for money (value-based retainers)

Cons

  • Still trading time for money (if doing hourly retainers)
  • Can be tough to “sell”
  • Can be difficult to predict time commitment, and sometimes scope
  • Can be difficult to communicate value

Types of Retainers

Hourly Retainer // Beginner

This is the simplest of the retainer models. The client agrees to pay you a specified sum in advance to secure a number of your hours each month (or week).

You can negotiate the terms of your retainer, but generally speaking, the hours are set aside each month, and if the client doesn’t use them, they lose them.

Alternatively you can also specify a maximum carry-over amount, so the client could carry over a max of X hours each month if unused.

This can work really well for projects that are nearing an end, and/or where the client is already requesting hours outside of the original agreement.

Project-based retainer // Intermediate

This is also a fairly straightforward retainer model. Take your estimated project (or deliverable) cost, and divide it into a monthly fee.

For example, if I have a $8k project, and I estimate the project might take 4 months, I would break the project down into a monthly retainer of $2k. These are pre-paid at the beginning of each month, and I would set weekly and monthly deliverables so the client knows what to expect.

The benefit of this method is that the client is able to budget for a consistent amount each month, while you are able to rely on a consistent monthly income without being tied to deliverables.

I also don’t break the project up into hours spent. The client is paying for deliverables, and not hours of my time.

Time-based retainer // Intermediate

The time-based retainer involves charging daily, weekly or monthly rates. These rates tend to be higher than an hourly rate, because a client is paying a premium to have dedicated access to you.

Value-based retainer // Advanced

The value-based retainer can be one of the trickiest to implement, but is one of the most valuable. It requires a complete mindset shift in terms of how you think about your pricing and your value.

Sometimes the scope of a project is unclear or variable, and a solution is determined over time.

In this case, you are charging an ongoing (typically) monthly fee for projected value that you can bring to the client.

You can even use a combination of the above; get creative!

Example in the wild:

A client came to me with a fairly new business idea. The project parameters were unclear, but they wanted to begin right away. Rather than trying to scope out a project that had far too many unknowns, I suggested an engagement of 3 months, with a consistent monthly fee.

Month 1 would be a paid discovery phase that would also involve focus on establishing their brand identity.

Month 2 would involve the creation of a simple starter website that would help them establish a web presence, as well as help them determine what their MVP offering would be.

Month 3 would be helping them integrate payment systems, sales pages, and email automation so they could pre-sell their beta offering.

During month 3 we would assess where we were at with the deliverables, and agree what the next 3-6 months could look like.

This is an example of what I would consider a mixed retainer. It’s loosely based on the value to the client, the type of project, and the time requirement for me to complete.

How to implement

In my experience, it’s pretty rare that past clients don’t often need additional work to maintain their websites/copy/marketing etc. Similarly, currently client engagements are ripe for opportunity to extend the engagement. Rather than letting these relationships expire, an ongoing retainer can be an excellent way to nurture an already excellent relationship.

What does this client need next in order to continue making progress?

What would be a relief for this client?

What still needs work/insight/maintenance?

Let’s say you’re working with a client now and you’ve got a great rapport, or you’re working with a client for whom the scope of the project is starting to creep, and it is taking you longer to complete the project than you anticipated.

Take the opportunity to let current clients know how they can continue to work with you once your current engagement is over.

I will typically offer my clients a 30 day “warranty” period to find any bugs or unexpected hiccups, and will outline in a hand-off document how to continue working together moving forward.

Don’t wait for your clients to come to you with a “project”; be proactive.

Take a look at your past clients’ website, copy, marketing, social channels, etc, and make a list of opportunities.

Reach out to those clients, using the script below as a guide (adjust depending on whether the client is past, present, or prospective).

Example Script

“Hey [Jane],

I was taking a look at [website/marketing/copy/social/etc], and noticed that [list opportunities here]. I would love to help you [talk about results that would be possible, or goals they might have that you could help them achieve].

I am offering a few limited spaces in my schedule to offer this kind of ongoing support, and since we [list some results achieved through your previous/current/future collaboration], I wanted to extend this offer to you.

If interested, I have a few packages available:

[Outline 3 pricing tiers, depending on which retainer model you’re using, to give your client options depending on their budget]

(link these to Paypal subscription buttons – make it easy for them to say yes!)

Some examples of things we could do with this time include:
[list some pain points, desired goals, results you can achieve] (example: we could use this time to build out your email sales funnels, put together a content strategy for your blog, or automate your client intake process, etc.)

I am making [X] spots available for this work, so please do let me know as soon as possible if you are interested, and I’ll be sure to secure that time for you.

Cheers!”

The Value for Your Clients

The key with pitching retainers to your clients is in how you communicate the value of the retainer to them.

You’ll notice in the script above that we:

  • Make the value to the client clear and obvious
  • Identify some of their current pains/desires
  • Offer examples of tasks that we could handle, and value we could provide
  • Make it easy for them to take the next step

I encourage you to use the script as a very loose starting point, and to find the wording that makes the most sense for your brand, tone, and personality.

Tasks that lend themselves well to retainers:

  • Routine + maintenance work, including tasks that can be automated (WordPress updates + backups, Plugin updates, etc.)
  • Emergency + Fast turnaround work
  • Tasks requiring ongoing work (Articles written per month, social media updates, SEO, etc.)
  • Ongoing strategic consulting or coaching
  • Content Strategy

Don’t be afraid to get a bit creative with how you package up your services in the form of retainers. Experiment with different types of commitments, using a combination of the above depending on the clients’ needs.

Most importantly, you’ll need to exercise your copywriting skills to make it feel like an easy yes.

Communicate the value to your client. Be pro-active. Proceed with confidence.

Marie Poulin Marie Poulin is a designer and digital strategist who is passionate about using human-centered design thinking to build better businesses. She is the founder of Digital Strategy School, an online program that helps designers integrate digital strategy into their workflow and offerings, so they can increase their value to their clients (while also increasing their bottom line). She also co-founded Oki Doki, a consultancy and software application that helps entrepreneurs build, launch and market online courses and programs. When she’s not in business mode you can find her climbing rocks, cooking food, or playing board games. You can follow her on Twitter or Facebook.

SIGN UP
+ get the FREE Freelancer’s Toolkit including:
✓ From Last Corporate Day to a Month of 5k
✓ How to Get to Steady
✓ 4 Steps to your First (or next!) Passive Income Stream Workbook
✓ Daily advice, tips & inspiration

Yes, please!

{ 7 comments… add one }
  • I love this. I’m already on the retainer model but have been seriously considering moving to a value based package model.

  • Powerful stuff Marie. You always come to my rescue with your well written stuff and advice

  • I’ve been experimenting with both of these models.

    My business is still pretty young. I am trying to get my first few clients on a retainer and use that consistent income to figure out my systems, and how to automate some of the monthly tasks I am including.

    This will hopefully give me a better idea of time for future clients monthly retainers.

    Great article!
    -Alex

  • What a fantastic post! I’ve been using the retainer model as a VA + OBM for almost a year and it’s wonderful. I’ve noticed that my clients are more committed to our working relationships and their overall business when they sign on for a retainer 🙂

Leave a Comment