How to Set Up a Retainer Agreement: Earn More From Your Best Clients

A big obstacle that many freelancers face is a lack of consistency in their schedule.

When you have bills that show up on a regular basis but work that only brings in money when it’s available (and after you’ve put in the time), things can get stressful in a hurry.

This isn’t just a problem for new freelancers either. The “feast or famine” problem can affect seasoned pros too.

The key to handling this problem is to often look beyond traditional freelancing and diversify into different types of agreements – especially reoccurring income sources like products or retainer agreements.

Solid retainer agreements with your best clients allow you to plan your work well in advance. They also even out those stressful income fluctuations and enable you to take on other clients on your terms.

Retainers can give you the financial freedom and stability you’ve been dreaming about… if you’re careful when setting them up.

Just like traditional freelance contracts may go away from a deadbeat client refusing to pay, a poorly-planned retainer agreement puts you in a position to be taken advantage of.

The goal: make yourself available to a client in exchange for a predictable income, adding stability for both parties involved

Interested? Want to find out how to pitch a retainer contract to clients and make them work for you?

If you’re looking for a steadier stream of income or for a way to supplement your traditional hourly work, listen up and take notes!

Image credit: FirmBee

What Work Should You Offer?

One of the first steps to making a retainer work for you is to decide what sort of services you can realistically offer. You’ll find that some of your typical work probably won’t be the best fit for a retainer agreement.

For a content strategist, a retainer option may simply be, “Deliver one article a week and two guest posts per month.”

But what about for someone who develops websites or handles maintenance? Left ambiguous, a retainer arrangement can lead to way too many calls, emails, and requests. All the little details eat up too much time to make it worthwhile.

This article will help you pinpoint which of your services would be the best fits for retainer gigs.

Services That Work Well for Retainer Agreements

  • Handling routine (i.e., not out of the ordinary) maintenance work that may not get done without you
  • Being on call for emergency issues (clearly define what constitutes an “emergency”)
  • Offering extremely fast turnaround for routine tasks
  • Consulting on strategy or planning for the company
  • Handling reoccurring work (like a set number of articles per week, as mentioned above)
  • Ongoing reporting and/or monitoring

One must-do is to outline specifically: 1) what work you’ll be doing, and 2) how much time you can commit to the arrangement.

Tracking Your Time

Being at someone’s beck-and-call can get out of hand when they start paying you every month. They might start demanding too many hours. Prevent this by having an agreement that specifies X hours, and if they want X+Y, they’ll have to pay extra.

Don’t know how much time you’re dedicating to each client? Our integration with time-tracking software Harvest makes it simple to find out!

You’ll also want to keep tabs on the agreement as time goes on. One of the best ways to make sure your retainer is working out for you (and your client) is to track your time closely. Is your rate per hour higher, the same, or less than before?

Once the ink hits the paper, use tools like Harvest or Toggl to monitor hours spent working on a retainer contract vs. your monthly retainer fee (time-tracking 101, you’re likely already doing this). You can find even more productivity and time-tracking tools on our massive list of freelance resources.

The objective?

Know how much you’re really earning per hour. If you discover you aren’t working close to your target rate, you can make a move to renegotiate the terms or price, or you can cancel the contract and move on.

Image credit: websubs

Pitching the Idea to Clients

We all know that a perfect proposal appeals to a client’s needs, so you can be sure that it takes a bit of positioning to successfully pitch the idea of a retainer agreement to clients.

Here’s a screenshot from our free marketing retainer proposal template to give you an idea of what it might look like:

And here’s another retainer proposal from our web design template (also free):

First things first. The reason that you’re interested in a retainer agreement is that, at some point in building your business, you found that you were doing more and more work for a smaller segment of important clients.

These are the clients you need to target for retainer agreements.

Why?

Since these clients have slowly been “funneled” by your premium rates, it’s clear that you kept them around for a reason: they pay well and on time.

Because you won’t have to worry about marketing yourself so much when you have a few solid retainer contracts, it makes sense to take relationships with these top-tier clients beyond an hourly basis.

Your best clients can afford it. And you get an opportunity to spend less time on promotion – and more time on getting paid.

It’s 80/20 rule that plays out in many a freelancing career. We soon realize that only 20 percent of our clients are producing the lion’s share of our income.

To sweeten the deal, these super clients are usually the most willing to commit to retainers since your expenses aren’t as big of a dent in their budget as a smaller client.

In short, these are the people you dream of finding when you’re just starting out and searching far and wide for those very first clients.

Here are a few ways you make it a “no-brainer” for these winning clients to see the value in a retainer contract with you:

Remind Them of Your Dependability

If you’ve been over-delivering on your contract work, the thought of hiring you on retainer has probably already been discussed, or at least mentioned.

It’s no surprise then that the best thing to remind your clients of is how much value you’ve delivered on such a consistent basis.

Make it obvious that you’re serious about transforming this relationship into something more consistent, and put your track record front and center to let it speak for itself.

Be like Han Solo: calm, collected, and confident in your ability to create value.

Do The Math for Them

If a client just closed two $2,500 contracts with you over the span of 2 months, a $4k+ monthly retainer sounds like a deal if they plan on having more projects in the future.

You get to stop chasing clients and work with the best, and they get to save money and have you available for regular work. They get to save the time they would have spent trolling freelance brokering websites looking for help from someone else.

Offer Different Levels of Commitments

Sure, a 3-month retainer may sound great to you (especially if it’s with an ideal client), but many people are scared of commitments.

Instead, you could offer a monthly retainer that requires a notice to cancel and an extended retainer contract for those clients who are ready to invest in your time.

Just like how you position your prices for your “regular” freelance work, remember that retainers don’t have to be sold as a single package.

Assemble Benchmark Reports

If your work directly contributes to closely-monitored metrics (a better customer experience, more conversions, or more leads/traffic if you’re a content creator), offer to assemble quick reports on how your work has improved their business.

This is especially useful if you’re looking to land a long-term agreement (six months or more), as it will put many business owners at ease to see that you’re taking an active interest in delivering measurable results.

Give Both of You an Easy Way Out

As counterproductive as this might seem, trust me, you’ll want to include an easy way to end this relationship.

The thing is, great clients rarely go sour unless there is a change in management, and you can almost always tell if a contract isn’t going to work out shortly after it’s been signed.

For these “barnacle” clients, you’ll want a way to easily escape that’s written into the contract. For top-tier clients, this serves as more or less a guarantee, and since they are the least likely to use it, it really is a win-win for both of you.

Image credit: Robert_C

The Finishing Touches

If you’re ready to start making moves on getting clients on retainer, let me offer one final word of warning: you must get certain things down in writing or you’ll end up in trouble.

It’s not rocket science either, just a few basic, iron-clad parameters that will keep you safe from rotten clients. Any upstanding client will understand the need for it and won’t offer you resistance.

Make sure all the following details make it into your retainer contract:

  • The amount you’re to receive each month
  • The date you’re to be paid by
  • Any invoicing procedures you’re expected to follow
  • Exactly how much work and what type of work you expect to do
  • When your client needs to let you know about the month’s work by
  • What notification you need before the retainer relationship can be ended
  • Anything else that is relevant for ensuring that work is completed in a timely fashion

Your Turn

Have you worked on retainer for any clients in the past?

Which of your freelance marketing strategies has brought in the most retainer agreements and long-term clients?

Share your tips and advice in the comments below, and thanks for reading!

About Gregory Ciotti


Gregory Ciotti loves small businesses & startups and gets nerdy about behavioral psychology on his blog Sparring Mind.

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Joel

Thanks for this, Gregory. (And thanks Bidsketch for consistently providing such great articles.) Retainers have been a Godsend for us. Now we just need to find more of those top-tier clients.

tim chan

This is really good and practice advice!

Andy

Thanks Gregory! this is just what I needed. Time management is tough to learn but Im realizing just how important it is. With so many variables out of your control makes sense to manage the ones you can.

Cornelia

Thanks Gregory. Really great article and I agree with the relevance of the 80/20 principle

Sean Cook

Good article Gregory. I also add that if the monthly maintenance is really minimal for that month, I send them some free traffic stats and analytics so they always get their money’s worth. This keeps them happy. 🙂

Edwin

Weirdly, I’ve done something like this very recently. As Wordpress needs constant tweaks and fiddles to keep it up to date and working correctly (without being hacked) – I now charge my clients a yearly update fee at the same time as their hosting fee. Call me nuts but up until recently I did this for free. I can’t really charge a monthly retainer, so what I do is on-sell new services and functionality to existing websites and give clients the opportunity of a whole site upgrade after the first 2 years (say from non-responsive layout to responsive) with larger-than-usual loyalty upgrade discounts. So it’s a kind of hybrid of your post, but the client gets to see the differences rather than “paying for the invisible stuff” (a common bugbear in this industry).

Andrei

Another way we use to negotiate retainers is to make available for the client a pool of hours for which he commits a monthly payment. The larger the amount of hours bought, the bigger the discount we offer.

A very simple online time tracker we use for our retainer contracts is http://www.upyourtime.com

Rui Figueiredo

Great article, as always!
The company I work for has done the same thing Andrei mentioned – making a pool of hours available for certain clients – and it does seem to work quite well.

Looking forward to read the next blog post.

Jason Pelker

The only thing I would add would be a ceiling for hours workable in the contract. These hours should not roll over, either. That’s the cost of having a third-party business on call and not paying their taxes and other expenses.

If the client needs additional hours, he could have them at a [very] slight discount, but he’d need to pay out of pocket. For this reason, time-tracking is a necessity with retainers.

Personally, I just do 10 hour blocks (to keep everything simple), but I’d love to move to monthly retainers, just to ensure revenue and to expand my client base.

Dana Thompson

Timely post with great advice. I’m just starting to offer a monthly retainer to some of my web design clients. Trying to smooth out the ups and downs and my income stream and give those clients juggling way too many things to keep their sites current. I think it’s a win-win for both parties!

Coral Cashes

Coincidentally, I’ve just started coming up with ways to do this within my graphic design business. It’s a little tricky trying to figure out a way to sell a monthly flat-rate graphic package, but I’ve found certain industries that can work with. But, I’ve never thought about doing the whole contract. I really like the idea of that because I always end up explaining the stipulations through email, which wastes a lot of my time. Also, since I do use it to market myself, as opposed to keeping it for my good clients only, it would really protect me, too. As a print designer, I don’t have a lot of clients that do repeat business that would warrant a contract like this. Most people do their 1-3 things a year, and that’s it. So I *have* to market the package to people I don’t know. An easy out would be great with those types, since I don’t know about their dependability.

Similarly, I do have one client who is a design broker. She’s my biggest client–she probably sends more than 20% of my work, always pays on time, etc. She recently offered me a weekly salary to handle her customer service since she is getting too busy to take care of it. We haven’t discussed this in detail yet, so a contract would be a good idea for that too, just so I’m not completely in over my head with work for her, forcing me to ignore my other clients.

Anyway, that offer from my client paired with this article really has me thinking about marketing my services to other print shops. Thanks for the ideas and advice!

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