{"id":121,"date":"2016-04-20T08:00:00","date_gmt":"2016-04-20T12:00:00","guid":{"rendered":"https:\/\/freelancetofreedomproject.com\/?p=121"},"modified":"2021-10-22T17:42:07","modified_gmt":"2021-10-22T21:42:07","slug":"implement-retainer-based-payment-model","status":"publish","type":"post","link":"https:\/\/freelancetofreedomproject.com\/implement-retainer-based-payment-model\/","title":{"rendered":"How to Implement a Retainer-Based Payment Model"},"content":{"rendered":"\n<p>Retainers can be a valuable way to bring in more consistent income, and&nbsp;<a href=\"http:\/\/school.freelancetofreedomproject.com\/rush-and-stream\/\" target=\"_blank\" rel=\"noreferrer noopener\">reduce the feast and famine cycle<\/a>&nbsp;experienced by many freelancers.<\/p>\n\n\n\n<p>A retainer is a fee paid&nbsp;<em>in advance<\/em>&nbsp;by a client to secure your services.<\/p>\n\n\n\n<p>There are several different types of retainers and ways to get started, each with it\u2019s own challenges, requirements and advantages.<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"684\" height=\"1024\" src=\"https:\/\/freelancetofreedomproject.com\/wp-content\/uploads\/2021\/10\/Freelance-Pricing-payment-684x1024.jpg\" alt=\"\" class=\"wp-image-122\" srcset=\"https:\/\/freelancetofreedomproject.com\/wp-content\/uploads\/2021\/10\/Freelance-Pricing-payment-684x1024.jpg 684w, https:\/\/freelancetofreedomproject.com\/wp-content\/uploads\/2021\/10\/Freelance-Pricing-payment-200x300.jpg 200w, https:\/\/freelancetofreedomproject.com\/wp-content\/uploads\/2021\/10\/Freelance-Pricing-payment.jpg 735w\" sizes=\"(max-width: 684px) 100vw, 684px\" \/><\/figure><\/div>\n\n\n\n<p>I&nbsp;<em>generally<\/em>&nbsp;don\u2019t recommend starting off a new client engagement with a retainer unless you\u2019ve got some experience under your belt. (Aka you\u2019re comfortable with your working process, and can clearly articulate your value.)<\/p>\n\n\n\n<p>Retainers&nbsp;<em>can<\/em>&nbsp;be tricky, and a certain level of&nbsp;<em>confidence<\/em>&nbsp;is required to make your clients feel comfortable with this payment model (especially if they\u2019ve previously been used to paying you an hourly rates for services).<\/p>\n\n\n\n<p>You also want to ensure that you\u2019ve established a level of trust with the client before offering them a retainer.<\/p>\n\n\n\n<p><strong>Pros<\/strong><\/p>\n\n\n\n<ul><li>Consistent and reliable cash flow<\/li><li>Easier for the client to budget for<\/li><li>Predictability of time commitments or deliverables each month<\/li><li>Continued ongoing relationship<\/li><li>Moves away from trading time for money (value-based retainers)<\/li><\/ul>\n\n\n\n<p><strong>Cons<\/strong><\/p>\n\n\n\n<ul><li>Still trading time for money (if doing hourly retainers)<\/li><li>Can be tough to \u201csell\u201d<\/li><li>Can be difficult to predict time commitment, and sometimes scope<\/li><li>Can be difficult to communicate value<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">TYPES OF RETAINERS<\/h3>\n\n\n\n<p><strong>Hourly Retainer<\/strong>&nbsp;\/\/&nbsp;<em>Beginner<\/em><\/p>\n\n\n\n<p>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).<\/p>\n\n\n\n<p>You can negotiate the terms of your retainer, but generally speaking, the hours are set aside each month, and if the client doesn\u2019t use them, they lose them.<\/p>\n\n\n\n<p>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.<\/p>\n\n\n\n<p><em>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.<\/em><\/p>\n\n\n\n<p><strong>Project-based retainer<\/strong>&nbsp;\/\/&nbsp;<em>Intermediate<\/em><\/p>\n\n\n\n<p>This is also a fairly straightforward retainer model. Take your estimated project (or deliverable) cost, and divide it into a monthly fee.<\/p>\n\n\n\n<p>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.<\/p>\n\n\n\n<p>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.<\/p>\n\n\n\n<p>I also don\u2019t break the project up into hours spent. The client is paying for&nbsp;<em>deliverables<\/em>, and not hours of my time.<\/p>\n\n\n\n<p><strong>Time-based retainer<\/strong>&nbsp;\/\/&nbsp;<em>Intermediate<\/em><\/p>\n\n\n\n<p>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.<\/p>\n\n\n\n<p><strong>Value-based retainer<\/strong>&nbsp;\/\/&nbsp;<em>Advanced<\/em><\/p>\n\n\n\n<p>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.<\/p>\n\n\n\n<p>Sometimes the scope of a project is unclear or variable, and a solution is determined over time.<\/p>\n\n\n\n<p>In this case, you are charging an ongoing (typically) monthly fee for projected value that you can bring to the client.<\/p>\n\n\n\n<p>You can even use a combination of the above; get creative!<\/p>\n\n\n\n<p><strong>Example in the wild:<\/strong><\/p>\n\n\n\n<p>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.<\/p>\n\n\n\n<p><em>Month 1<\/em>&nbsp;would be a paid discovery phase that would also involve focus on establishing their brand identity.<\/p>\n\n\n\n<p><em>Month 2<\/em>&nbsp;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.<\/p>\n\n\n\n<p><em>Month 3<\/em>&nbsp;would be helping them integrate payment systems, sales pages, and email automation so they could pre-sell their beta offering.<\/p>\n\n\n\n<p>During month 3 we would assess where we were at with the deliverables, and agree what the next 3-6 months could look like.<\/p>\n\n\n\n<p>This is an example of what I would consider a&nbsp;<em>mixed<\/em>&nbsp;retainer. It\u2019s loosely based on the value to the client, the type of project, and the time requirement for me to complete.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">HOW TO IMPLEMENT<\/h3>\n\n\n\n<p>In my experience, it\u2019s pretty rare that past clients don\u2019t 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.<\/p>\n\n\n\n<p><em>What does this client need next in order to continue making progress?<br><\/em><br><em>What would be a relief for this client?<br><\/em><br><em>What still needs work\/insight\/maintenance?<\/em><\/p>\n\n\n\n<p>Let\u2019s say you\u2019re working with a client now and you\u2019ve got a great rapport, or you\u2019re 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.<\/p>\n\n\n\n<p>Take the opportunity to let current clients know&nbsp;<em>how they can continue to work with you<\/em>&nbsp;once your current engagement is over.<\/p>\n\n\n\n<p>I will typically offer my clients a 30 day \u201cwarranty\u201d period to find any bugs or unexpected hiccups, and will outline in a hand-off document how to continue working together moving forward.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Don\u2019t wait for your clients to come to you with a \u201cproject\u201d; be proactive.<\/h2>\n\n\n\n<p>Take a look at your past clients\u2019 website, copy, marketing, social channels, etc, and&nbsp;<em>make a list of opportunities.<\/em><\/p>\n\n\n\n<p>Reach out to those clients, using the script below as a guide (adjust depending on whether the client is past, present, or prospective).<\/p>\n\n\n\n<p><strong>Example Script<\/strong><\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\"><p>\u201cHey [Jane],<\/p><p>I was taking a look at [<strong><span class=\"has-inline-color has-luminous-vivid-amber-color\">website\/marketing\/copy\/social\/etc<\/span><\/strong>], and noticed that [<strong><span class=\"has-inline-color has-luminous-vivid-amber-color\">list opportunities here<\/span><\/strong>]. I would love to help you [talk about results that would be possible, or goals they might have that you could help them achieve].<\/p><p>I am offering a few limited spaces in my schedule to offer this kind of ongoing support, and since we [<strong><span class=\"has-inline-color has-luminous-vivid-amber-color\">list some results achieved through your previous\/current\/future collaboration<\/span><\/strong>], I wanted to extend this offer to you.<\/p><p>If interested, I have a few packages available:[<strong><span class=\"has-inline-color has-luminous-vivid-amber-color\">Outline 3 pricing tiers, depending on which retainer model you\u2019re using, to give your client options depending on their budget<\/span><\/strong>]<\/p><p>(link these to Paypal subscription buttons \u2013 make it easy for them to say yes!)<\/p><p>Some examples of things we could do with this time include:<br>[<strong><span class=\"has-inline-color has-luminous-vivid-amber-color\">list some pain points, desired goals, results you can achieve<\/span><\/strong>] (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.)<\/p><p>I am making [<strong><span class=\"has-inline-color has-luminous-vivid-amber-color\">X<\/span><\/strong>] spots available for this work, so please do let me know as soon as possible if you are interested, and I\u2019ll be sure to secure that time for you.<\/p><p>Cheers!\u201d<\/p><\/blockquote>\n\n\n\n<h3 class=\"wp-block-heading\">THE VALUE FOR YOUR CLIENTS<\/h3>\n\n\n\n<p>The key with pitching retainers to your clients is in how you&nbsp;<em>communicate the value of the retainer to them.<\/em><\/p>\n\n\n\n<p>You\u2019ll notice in the script above that we:<\/p>\n\n\n\n<ul><li>Make the value to the client clear and obvious<\/li><li>Identify some of their current pains\/desires<\/li><li>Offer examples of tasks that we could handle, and value we could provide<\/li><li>Make it easy for them to take the next step<\/li><\/ul>\n\n\n\n<p>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.<\/p>\n\n\n\n<p><strong>Tasks that lend themselves well to retainers:<\/strong><\/p>\n\n\n\n<ul><li>Routine + maintenance work, including tasks that can be automated (WordPress updates + backups, Plugin updates, etc.)<\/li><li>Emergency + Fast turnaround work<\/li><li>Tasks requiring ongoing work (Articles written per month, social media updates, SEO, etc.)<\/li><li>Ongoing strategic consulting or coaching<\/li><li>Content Strategy<\/li><\/ul>\n\n\n\n<p>Don\u2019t 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\u2019 needs.<\/p>\n\n\n\n<p>Most importantly, you\u2019ll need to exercise your copywriting skills to&nbsp;<em>make it feel like an easy yes.<\/em><\/p>\n\n\n\n<p>Communicate the value to your client. Be pro-active. Proceed with confidence.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Retainers can be a valuable way to bring in more consistent income, and&nbsp;reduce the feast and famine cycle&nbsp;experienced by many freelancers. A retainer is a fee paid&nbsp;in advance&nbsp;by a client to secure your services. There are several different types of retainers and ways to get started, each with it\u2019s own challenges, requirements and advantages. I&nbsp;generally&nbsp;don\u2019t &#8230; <a title=\"How to Implement a Retainer-Based Payment Model\" class=\"read-more\" href=\"https:\/\/freelancetofreedomproject.com\/implement-retainer-based-payment-model\/\" aria-label=\"More on How to Implement a Retainer-Based Payment Model\">Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/freelancetofreedomproject.com\/wp-json\/wp\/v2\/posts\/121"}],"collection":[{"href":"https:\/\/freelancetofreedomproject.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/freelancetofreedomproject.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/freelancetofreedomproject.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/freelancetofreedomproject.com\/wp-json\/wp\/v2\/comments?post=121"}],"version-history":[{"count":0,"href":"https:\/\/freelancetofreedomproject.com\/wp-json\/wp\/v2\/posts\/121\/revisions"}],"wp:attachment":[{"href":"https:\/\/freelancetofreedomproject.com\/wp-json\/wp\/v2\/media?parent=121"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/freelancetofreedomproject.com\/wp-json\/wp\/v2\/categories?post=121"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/freelancetofreedomproject.com\/wp-json\/wp\/v2\/tags?post=121"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}