Everyone loves recurring revenue, it gives us some security and expectations for the future. It takes the pressure off winning new work and it's becoming easier for clients to understand, considering that we now live in the subscription economy.
Retainers for designers are not as common as they are for digital services such as SEO, SEM, SMM, Website Care Plans, Hosting & Domains etc. But there are ways to approach this.
So how does can a graphic designer package and sell ongoing projects?
A good way to manage retainers while making it easy to sell/explain the value is by looking at the 2 types of client relationships.
1) Ad-hoc clients where people make requests, you quote and give a time frame based on availability.
2) Retainer clients who you agree to save your availability open for them and they are charged regardless.
With retainer clients what you are selling is availability. If someone pays for a retainer, you are guaranteeing them that you can get the work done within a certain time frame (whatever is realistic). Maybe you offer some small discount on the hourly fee (note that you are losing less time in this process as you do not need to quote and seek approval), but the core benefit should be availability.
I like to structure it so they agree to a minimum time commitment of a 3-month block, where you check back at the end of the 3 months to see how you are tracking. Time over/above the agreed commitment is treated as a normal ad-hoc client (full rate, will try your best to be able to do the work in a reasonable time frame but no guarantee).
Over the course of the 3 months, the hours roll over week to week but not month to month. At the end of each 3-month block, you review this with the client. If they are constantly going over (by more than a couple of hours a month), you adjust the retainer up. If they are constantly going under (by more than a couple of hours a month) you adjust the retainer down.
An example of what that looks like for a client that signs up for 5 hours a week over a month:
- Week 1: 3 of 5 hours used (2 hour2 left over).
- Week 2: 3 of 5 hours used (2 hours left over + 2 previous)
- Week 3: 5 of 5 hours used (4 hours left from previous)
- Week 4: 7 of 5 hours used (2 hours left from previous)
18 of 20 hours used. Remaining hours are lost.
Now if that's what an average month looks like, they are tracking pretty well. The lost 2 hours are made up for by your guarantee of availability (plus any small discount if you offer this).
Structuring design retainers like this is not only profitable, but it helps the client see the benefits of booking your time in advance and reduces some of the risk associated with unused time. Something that's easy to understand, and makes sense to a client, is easy to sell.
Listen to the Podcast Episode on recurring revenue and design retainers
