Woman wondering about retainers

Are retainer fees good for designers?

Any conversation about pricing with designers eventually turns to talking about retainers — an agreement where a client purchases an agreed amount of a designer’s time each month. Retainers are attractive because they provide consistency. The designer has a guaranteed income and the client can balance cash flow. But are retainers only valid for transactional work?

Why retainers can be good for designers

Consistency: Having a consistent income is gold. Knowing when and how much work to expect is brilliant.

Ongoing work. Random projects take time and energy to understand the brief, the client and the environment. The familiarity ongoing work fosters makes it easier to work more efficiently and be proactive rather than reactive.

Ability to add value: regular contact with a client builds intel that can be used to identify potential business opportunities.

The relationship: the client/supplier relationship can morph into something more collegiate as you become part of a team and that makes it hard for competition.

The connection: being part of a team can be nice in the sometimes-isolating world of running your own business.

Less paperwork: retainers reduce the amount of estimating, approval emails and invoices.

Why retainers can suck

Assumed discount: Some clients view a retainer as a bulk purchase and they may assume a discount. Discounting doesn’t make sense – why sell skills to one client at a reduced rate when there’s a chance you can sell the same skills to another client at a higher rate? And discounting breeds discontent. We all need to feel well-rewarded for our work, especially that done within time constraints (as retainer work often is)

Commitment: retainers are a commitment to trade work for a specific price. To be successful, it’s important the dollar amount is tied to an outcome not a quantity of hours. Time-allocated retainers are fraught with issues. (More about that below.)

Inflexibility: some designers view retainers as a golden-handcuff, and retainer clients can assume priority status. That inflexibility can make it difficult to know how many additional projects you can take on per month.

Making the negatives positives

Most of the reasons retainers can suck can be remedied by managing client expectations. Research shows not all designer:client relationships are about money. Clients want design partners who care about, and understand their business, and can use design to add value. The continuity of retainers does help build a relationship.

Discounting (and pricing in general) happens early in the retainer discussion. I would argue adding more structure to the working relationship helps designers produce more efficiently, and that in itself is a form of discounting. Working on transactional work more efficiently may leave more time (and budget) for proactive, strategic work.

The commitment of a retainer is about the roles and responsibilities of the client and the designer. Again it’s about managing expectations, and in this case, it’s expectations of deliverables. Trading dollars for hours is fraught – the more efficiently you work, the more you are penalised. Alternatively, trading a set amount of dollars for output is beneficial. The more efficient you become, the higher the profit.

The aim is to write a retainer business case centred on outcomes. One example may be an agreement to produce a newsletter within the second week of the month. This links the retainer to an outcome and a timeline (rather than a dollar amount) which can be a win:win. Knowing when the material is due gives the designer structure and the ability to offer the client priority-status. It allows the designer to work more efficiently, drawing in the extra labour if needed. Similarly, the structure around a (guaranteed) schedule and responsibilities may help the client organise stakeholders for copy deadlines, writing and approval.

Retainers are inflexible

Truth is, retainers must be flexible.

Life isn’t perfect and sh!t happens. Sometimes, regardless of good intentions, delays occur and work may spill into the next month — not great for the client and it may comprise a designer’s workflow. Similarly, the ‘same’ task one month might need far more work than the previous month, but less the next month.

As we know, the only constant is change. The key is to be transparent with the client from the beginning – try to identify future problems and write possible solutions into firstly the business case and then secondly, the retainer agreement.

Business case for a retainer

If you are going to ask for a retainer, look at it through your client’s eyes and treat it as a business deal… what are you offering and why it’s to a client’s advantage to change their relationship with you. Include points like:

  • A continuous working relationship means you can be more proactive rather than reactive. Having one designer/design team work on a brand builds knowledge and consistency. It’s easier to proactively suggest options to improve outcomes.
  • Cashflow. It simplifies budgets. It helps manage expectations. Clients can set a budget at the beginning of a relationship and know it’s not going to change. That makes it easier to budget for the sporadic, one-off projects.
  • Paperwork. One invoice per month, for an agreed amount.

The business case should include a retainer agreement. The key is to write an agreement based on reality rather than the perfect world so if/when life doesn’t go to plan, expectations are managed. Include scenarios such as:

  • Agree to a set of deliverables. Are you agreeing to produce 10 web banners each month or assigning one designer one day per week to a client or neither or a mixture of both?
  • What happens if there’s no work, or little work for the month? Is it a use it or lose it scenario – the designer bills the full retainer amount regardless?
  • Can a proportion of the retainer be carried forward to the next billing cycle? And what happens if the studio is at capacity that month?
  • What happens if the work one month far exceeds the agreed scope?
  • How are tasks itemised so those outside the scope of the retainer are easily identified, estimated and billed?
  • What are the time-frame expectations for the work and the payment?
  • Who are the responsible personnel? Is there a designated ‘retainer team’? What happens when the ‘team’ is on leave?
  • What happens if there is a dispute? How will it be resolved?
  • How is work allocated? Some designers share tracking software to reduce reporting time – Streamtime or Asana could be set up to show agreed priorities and timings

Retainers rely on a healthy client:designer relationship. Designers can share the responsibility to plan ahead. It’s a great way to take ownership and avoid any traffic jams of last minute projects.

Case study

Near the end of my life as a studio-owner I negotiated a change from a project-by-project role to a retainer contract with a long-term client. I committed to working on his business three days per month (in Sydney when I was based in Melbourne) for a set fee. My role was to plan and manage their communication strategy, so the work was a mix of design (on the tools), strategy, and design management.

The objective was to raise the profile of the organisation through design. The 12-month goal was to identify strategies and develop a set of tactics to be used in a job description to employ an inhouse designer.

It was a great gig, and I enjoyed the freedom to jump from one project to another without justifying an hourly rate BUT it was a large retainer, so I was mindful of continually demonstrating value. This was especially important early in the exercise – the planning and strategy stage – when there were not a lot of demonstrated, tangible results.

I part-solved this by making sure I kicked a goal in the week I invoiced – I finished each month on a high. I also regularly updated and shared the master communication strategies spreadsheet detailing what I had done.

The real challenge was being ‘available’ outside those three days I was in Sydney. Obviously work did not stop and I reported directly to the Managing Director, a long term client who loved having a designer ‘on-tap’. There were many ‘we need to think about this’ emails.

This could make the process of prioritising existing tasks challenging so I leaned heavily on a skill learnt early in my career when I worked with a manic creative director. Every time this guy came up with a better, but more urgent idea than the last, I would hold up my ‘to do’ list and ask for help to re-prioritise the existing ‘urgent’ jobs to accommodate the new ‘urgent’ job. Worked a treat, as it had previously. The MD loved the hands-on role of prioritising.

Twelve months on, as planned, my retainer was replaced with an inhouse designer and I moved to a mentoring position, and design consultant advising on longer term projects.

I think the retainer was a win:win. I’m still intouch with the inhouse designer so I know they’re happy with the outcome. It was lucrative but just as important, I managed to embed design across the whole of business. I instigated many inhouse conversations, I used design to raise the profiles for key people, and included the team when setting objectives and managing outcomes. The response to the ‘new’ monthly EDM campaign was overwhelming – much new work was written. That increased employee morale and demonstrated the marketing strategy was successful.

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Want to continue the discussion? Email Carol.

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Carol Mackay


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About Carol

After 30+ years running a graphic design firm, Carol pivoted from client-focused projects to consult to the design industry. Now with the Design Business Council she uses her experience, and research, to help designers build robust, sustainable businesses, and help businesses integrate, and profit from, design.

The core of the DBC is the building a design community – over 85% of designers work in businesses with less than 5 employees, many less than 3. That means designers don’t have the same support network of other professionals. The DBC’s solution is supplement  paid gigs with mentoring breakfast meet-ups, informative UNseminars and practical workshops in Melbourne, Perth and Sydney.

In 2018 Carol co-founded the Clear Communication Awards, and the Business of Design Week. Both will be run in 2019

An archive of her design work at mbdesign.com.au.
Her current work can be viewed at designbusinesscouncil.com and designbusinessschool.com.au.

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