How to offer retainers, the holy grail of consulting

By Jarrod Drysdale


Note: this article was originally published at the Creative Class freelancing blog.

Most freelancers burn through clients faster than King Arthur loses knights (especially if you’re enjoying the Monty Python version).

A thriving consulting business needs a constant stream of new clients, after all. You write proposals regularly to try and keep new projects coming in. If you’re doing really well, maybe you can line up several projects in advance.

Freelancing sites, books, and courses (many of them very, very good and written by my friends) advise you on how to optimize lead finding. Build an onboarding process, like Paul Jarvis teaches. If you refine your pitching practices, like Brennan Dunn does, you can raise your rates and write fewer proposals. Or, simply consider how you email with clients, like Robert Williams advises.

This is great advice and you should follow it.

However, no matter how efficient you are, earning that constant stream of new work gets exhausting sometimes: writing cold call emails, responding to job board posts, and answering referral emails. You end up booking only a fraction of proposals, and you never quite have enough leads for next month.

There’s a different way to consistently earn freelance work, without needing a constant stream of new clients.

Instead of trying to book single, one-off projects, pick your favorite clients and guide them towards ongoing work and a long-term relationship.

Start offering retainers to the people you enjoy working with most. Your quest is not so dangerous as you might expect. Here are some tips to avoid the killer rabbits, black knights, and bridges of death that await you in finding the holy grail of consulting.

Why try retainers? Retainers in practice: a short story.

I restarted my design consulting business 10 months ago (although I’ve been a professional designer for over a decade).

As I started looking for clients, I quickly tired of the lead-finding slog. The first couple of months, I’d managed to work with some phenomenal clients who rehired me, and slowly (and densely) started to realize that they had ongoing challenges.

I assumed that the ongoing work wouldn’t be desirable. Usually, it entails making little textual website updates once a month or monitoring Google Analytics. That sounded like the exact opposite of the kind of business I wanted to build.

But as I listened to what my clients were saying, I realized their challenges were deeper than tedious maintenance work. In some cases, maybe a client didn’t really understand how to use the assets I’d just made for them. Or, they had aspects of the business they really just didn’t want to have to think about.

I had a crazy idea: what if I pitched them on retainers? I could be the solution to those long-term frustrations my clients were describing. These needs didn’t fit neatly into a one-off project, and were happening on a regular basis. A retainer just made sense for them.

A retainer would be great for me too. If I could count on small projects each month from a handful of clients, I wouldn’t need so many new leads.

So, I did a ton of research on how retainers are structured and how to sell them, and broached the topic with my clients informally. What I learned would inform the biggest success of my consulting business to date.

Here’s what landing several retainers did for my business. My total monthly income for retainers is equivalent to a low salary, and is more than enough to pay my monthly bills. My retainers free up the time I would have spent looking for new leads. The impact has been so significant that I can work on my own products and even accept one additional large project every month. Often times, my retainer clients hire me for larger one-off projects (when that happens, I simply credit the retainer fee towards the larger project).

My consulting income is consistent. It’s also higher than before I had retainer clients.

Even better, I get to work with my favorite clients; the people who value and respect my work and the ones who pay me on time. I even have one client who often pays the retainer fee before I’ve even invoiced them!

Most people think retainers are a con job, and they usually are

Back when I mentioned retainers to each client, I was wary of the word, “retainer”, and didn’t speak it until much later. What I did say was something like: “It seems like you have some ongoing needs for design support. How can I help you with that? Is there a way I could support your goals on a monthly basis?”

Of course, once each client began to see the value of a long-term partnership, the term reared its ugly head, and some of the reactions were severe. “What if I don’t use all the hours I paid you for in a month?” “How many hours do I get?” “Can you give me a discount on your rate?”

Few people in our industry offer retainers because they have a bad reputation. Clients expect a “use it or lose it” allotment of hours that they purchase in advance at a discount. Some consultants might try to sell those blocks of hours and hope they go unused, which means free money.

I don’t blame clients for being suspicious, because a “use it or lose it” block of hours really is a complete con job. It’s unethical. I would never feel right about billing for hours I didn’t work, and I’m sure you wouldn’t either. Plus, scamming your clients isn’t a great way to get referrals when you do need them.

So, with this negative reputation in mind, I set out to make a totally different type of retainer. Here’s how I did it.

(Note: maybe this is bad reputation is why many consultants are using the term “productized consulting”, some of which are just highly structured retainer agreements.)

Offer retainers only to clients you’ve already worked with

In my business, a retainer starts out as a regular old project. I design or write something for a client and deliver it.

That first one-off project is critical; I get to evaluate the client, and they get to evaluate me. We figure out how well we really work together. Further, I get additional chances to learn about the client’s business and what struggles they’re having. After the project ends, if everything went well, I use those insights to pitch a retainer.

Never pitch a retainer to a new client for three reasons:

  1. You wouldn’t know what kind of work to offer on retainer. Only the experience of actually working with them, side-by-side, provides that knowledge. I haven’t been able to get enough out of interviews, questionnaires, or any other qualifying method. The client isn’t always aware of ongoing challenges, or doesn’t expect you could help solve them. So, you need to see these things happening.
  2. You don’t want to get trapped working with a client who doesn’t follow your advice or who you don’t like. No matter how hard you try to ask clever questions to weed out difficult clients, when you start a real project, there are always surprises. Use fixed-length projects to qualify clients for retainers.
  3. A new client won’t trust you and will say no every time. You need to build some trust and prove you do good work during a real project before a client will commit to recurring work.

Pricing: no discounts or counting hours

During the pitch process, the question of rates will naturally arise. It’s also the most difficult part of selling a retainer.

What do you do when the client calculates an hourly rate and asks for a discount?

First, talk about profits instead of rates

Never negotiate your rates. You deserve to be paid fairly for your time and experience. I know from first-hand experience that this kind of refusal is difficult; it’s confrontational and a little scary. You feel pressured to slash your rates or lose the client.

Stay strong. You can survive this part of the negotiation. It all starts with a single sentence:

“I sincerely appreciate the opportunity to work with you, but I can’t negotiate the rate.”

I use that same sentence every time a client asks for a discount. It explains that I value the relationship while also politely refusing to offer a discount.

Immediately following that, I’ll write about the results the monthly work can deliver. If it’s uncertain, I suggest we crunch some numbers before signing a retainer, so that the potential for profit is clear.

Note that I’m completely redirecting the conversation. Instead of falling into the trap of talking about hours, rates, and discounts, I change the topic to talk about what the client wants to get out of hiring me in the first place: profit.

The client isn’t considering a retainer because they have money to burn. It’s about achieving a business goal. So, remind them of that, and position your monthly services as an investment they can put towards achieving that goal.

(Of course, you have to sign the retainer too, which means you have to help them make real progress, or they’ll fire you!)

Second, remind your client of the value

Negotiating a discount and counting hours steers the conversation away from the value you provide every month.

I realize that this value thing might sound like complete doublespeak. The easiest way of figuring out the value is simple math: how much did I pay for this? How much did I earn? If I could pay less, I’d earn more. That’s more value.

Some people will find the value argument to be disingenuous—that it’s just a different form of the same old con; instead of “use it or lose it” hours, these critics might think I’m just trying to jack up my rates under the guise of “value”.

Profit is value. However, profit, while powerful, is only one part of the value you can provide to a client. The other side is simply removing frustration. The ongoing, long-term structure that a retainer provides is arguably more suited to being a problem solver than a one-off project could be. You can observe problems growing and changing over time and adapt your solutions. You get more than one chance.

Removing frustration is a key part in pricing your retainers, because it allows you to steer away from the idea of hours. Frustration is difficult to quantify into hours, but easy to compare to a price. By focusing on frustration, can also demonstrate that you’re more concerned with being helpful than you are about rates.

Set a flat monthly fee

I set a flat monthly fee on my retainers. My clients trust me to tell them when they ask for too much retainer work in a given month and when we need to talk about additional fees or make cuts to the scope. I do this all without counting hours.

Does that sound insane and impossible? It’s not. Since you’ve already worked with the client, you have an expectation about how projects will flow.

It’s also about setting expectations with the client and wording contracts clearly. Each of my retainers includes a “small monthly project” which can take “up to X days of work”, in addition to extra deliverables that are less about hours and more about value (which is advice I followed from Brennan Dunn‘s book).

My retainer contract states:

“I’ll advise you on how to get the best value each month and I will act in good faith to use the time efficiently. Further, I will notify you if I expect the monthly project to be especially short and recommend how we can accomplish the most together each month.”

I clarify how overages work like this:

“I will notify you before we agree upon the monthly project if it will require extra work beyond the scope of this agreement. I will also provide a written estimate for the overages. I will not complete extra work without your permission.”

These statements help my clients to be comfortable with the scope of the retainer without requiring an allotment of hours.

Of course, you have to earn that trust by delivering great work and results. Retainers aren’t for you if you just want to sit on the beach.

The first month of a new retainer, I work very very hard to prove my value. Retainers are about the long term, and if you invest some work into them up front, it pays off.

Provide ongoing value, not just a deliverable

So often with consulting, we fall into the trap of thinking we just make a product or a thing. With retainers especially (but also with your regular projects), it’s so important to focus upon value.

I keep mentioning value. Everyone writes about value these days (especially value pricing). What does value mean? It means you’re earning your keep. It means you are making your client money and making her life easier.

With a retainer, your client will invest a significant budget over the long term and will expect a lot more from you than just a Photoshop file or a few lines of code. They want results and peace of mind in addition to output.

So, when you pitch a retainer, hone in on the stickiest, most obnoxious aspects of your client’s business. What is the day-to-day? What tasks are they not keeping up with? Where are you best positioned to make them a boatload of cash?

For example, one of my retainer clients has an aspect of marketing they just don’t want to manage, so I took it over for them completely. Another needs me to keep her accountable to follow the plan we set in our first project. I’ve also handled other recurring work in retainers, like: running a monthly newsletter, managing ad campaigns, and designing new marketing and product assets each month.

Listen to your client. Then, write a nice proposal about how they can pay you every month to make their pain disappear, only to find it replaced by stacks of cash. That, my friend, is value. They’ll hire you on the spot.

Tailor your retainer services to each client

Each of your clients are unique. They have a specific audience, product, and voice. Match your retainer pitch to this.

However, it’s not just about adapting your pitch. You need to adapt your self and your services.

I learned pretty quickly after restarting my consulting biz that clients weren’t just buying a pretty design. They want an outcome, regardless of how much work or complexity is required to achieve one. When finding people with the right skills to hire can be so difficult, I handle every aspect of the project personally and make that outcome happen.

So, to book retainers, stop thinking of yourself as a designer, coder, marketer, writer, or whatever. You need to be a partner. Diversify the services you offer. Be the go-to person. Be the one consultant they’ve ever met who will steer every aspect of the project like it’s magic.

You can do it. If you don’t write, start practicing on your own portfolio site. If you can’t design, pick up some basics so you can advise your client.

Being a generalist has brought me more retainer work than being a designer. Not because anyone out there is looking to hire a generalist, but because it allows me to adapt my services to each client.

By being adaptable, I can do a better job of solving my client’s problems and I can work with a wider variety of clients than if I were a specialist.

That said, if you aren’t convinced about diversifying your skillset and the type of work needs to stay the same, at the very least consider how you can tailor your work each month to meet the client’s needs. Even if you’re essentially still doing the same thing, you can also deliver a monthly report, teach them a new marketing tactic, or provide another artifact that goes a bit deeper than the usual deliverables.

Contractual requirements

That doesn’t even begin to cover all the possible ways a retainer can turn into a trainwreck. I’ve also written up several other requirements that I put in place to avoid issues. I discuss these with clients so they aren’t surprised when they see the contract.

2 weeks advance notice required for booking monthly project

I’m not on call. All retainer projects are scheduled as normal, but with a smaller lead time than I usually require because I already know to reserve a slot for that client. The result is that I end up rearranging my schedule occasionally, but everything still fits. Also, no one is expecting me to make a website update at 3am on a Saturday.

My contract states that I am allowed to waive this requirement if my availability changes, and I often do. I even encourage clients to ask if something urgent comes up.

However, it’s important to set the expectation that availability works just the same as with normal projects.

30 day notice required to cancel retainer on either end

At first, a client might worry they will pay for a month and then I could walk away without doing work. (Having worked with the client previously reduces this concern.) The 30 day notice to cancel the retainer contract is there so they know I’m on the hook for the work and that I’m not going to walk away and keep the fee on a contractual loophole. Also, they can rely on me and have a longer-term plan in place.

The 30-day notice also protects me. In the same way, I don’t want to do work and not get paid. So the client is on the hook too.

Last, I depend on my retainers for my livelihood. Because I spend less time each month looking for new clients, losing the retainer would be more of a concern than a one-off project would be. The 30-day notice gives me time to prepare and make up for the loss of income if the relationship ends.

Planned billing: when to send invoices and when payment is due each month

Paying invoices is a major hassle for many clients. It’s part of why we consultants so often get paid late.

So, in my retainer contract, I detail the invoicing and payment process, including dates, to ease the headache of paying me each month. I want the retainer to be pain-free and smooth. Nailing down how transactions happen is a big part of this, as no one likes dealing with missed payments or unexpected invoices.

No rollover work or hours

I don’t allow projects or time to “roll over” to the next month (like mobile phone minutes used to). I realize that this sounds like a “use it or lose it” setup, but I don’t require it in hopes of getting free money. Instead, it’s to encourage the client to keep me busy. I don’t want the work to fizzle out and the client to cancel the retainer. It’s in my interest to keep the work consistent so the retainer doesn’t fall into question.

Trial month: cancel anytime, without notice, in the first month. (But no refunds.)

For a client, signing a retainer is a bit scary. They’re making a big commitment, and investing a lot into it. To alleviate that fear, I offer a trial month on my retainers. During the first month, either of us can cancel at any time, effectively waiving the 30-day notice that’s normally required.

This allows client to feel good about making the commitment. They aren’t stuck with me until they’ve seen how it will go, and if they don’t like the results for the first month, they aren’t stuck with me.

Similarly, I can cut and run if a client turns out to be difficult despite our previous project and every other indication.

However, it’s important to note that my contract requires that even in the event of someone cancelling during the trial month, both that month’s fee and monthly project are still due. Both parties still need to make good on the agreement for that month, then it ends.

Get off the lead-finding treadmill

By jumping from one client to the next, so many of us are leaving client needs unmet. Stop abandoning your clients!

Now, I’ll acknowledge that for many of us, the appeal to working for yourself is the constant newness. You get to meet new people and find new challenges regularly.

As a designer, so often I just want to dig into a cool new design style or come up with a new brand from scratch. I don’t often get to do that for my retainer clients.

However, having retainers doesn’t replace those fun, new projects completely. But you know what it does replace? Crawling job boards. It also provides a more reliable income while only occupying part of my time, so that I can still take on exciting new challenges every month.

Of course, I couldn’t end this article without preaching at you again for just a moment:

Who says new is more fun, anyway? Working through challenge after challenge with retainer clients and seeing their success grow is one of the most fulfilling experiences of my career. It’s definitely more substantial than the fleeting coolness of designing a new logo.

How many of us consultants can say we helped even a single client’s business in a truly substantial way? This doesn’t often happen in a single drive-by project. But a long-term client relationship can become a major achievement.


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