7 steps to introduce retainer pricing

Published: 04 Feb - 2021 by Ben Rendle

Coming from one-off projects to retainers doesn’t have to be difficult. There are a few important general steps (or hacks if you like) to bear in mind to smooth the transition. However, this can’t be done without a system to keep tabs on the performance of your retainers.

1. Reserve a set amount of time for a client.

So as not to set your clients up for failed expectations, what you can do from day one of preparing a retainer-based agreement is to think how much time of your available resources you can reserve for the new client.

To do so, don’t forget to check your resource availability for the next few months, as you’ll want to maintain appropriate levels of bandwidth.

Remember that you want to build your retainers based on the volume of work that your team can handle.


2. Communicate the expectations up-front.

Clients are often confused about what the retainer price includes.

Don’t be vague about the value you are able to provide to the client.

Seasoned professionals specify how they’re going to achieve the goal set, not forcing clients to “hope for the best.”

Craft a strategy and hammer out the details upfront. This step will help you avoid keeping clients in the dark regarding what they’re paying for.

Making the client happy doesn’t necessarily mean more work. The key here is to understand what the client is trying to achieve with your services.

Focus on how the client will interpret the results and find specific KPIs - they will help you move forward in the right direction.

You need specific criteria you’ll be judged on, so before mapping out the plan, think twice and ask yourself if the services you’re going to provide hit that mark.

Is there any monetary value your services can bring to the client? What is the expected outcome? Get the client to articulate measurable expectations.


3. Scope out the work to be done.

You and your team will definitely need a plan with deadlines, simply to know what to work on and when.

A typical retainer has a scope of work over a set time frame, and you can make it as detailed as you like dividing retained periods into milestones and tasks.

In some sense, moving from one-off projects to retainers, you’ll be able to become more agile and literally “make a gamble” against scope creep, as retainers are never set-in stone.

They always give you room for optimization and re-negotiation of the best practices.

We recommend scoping your retainer periods as then it will be transparent both to the client and the team at what direction you’re moving, what’s your take on a certain problem, and when you’re planning to deliver.

Another important aspect when it comes to scoping, is to estimate how long the tasks will take.


4. Allocate people to projects or tasks intelligently.

To introduce service retainers to your business successfully, you need to have a closer look at resource management at the company.

One mistake managers make too often is allocating resources by virtue of situations.

This is especially true for consulting businesses, where consultants are distributed between projects randomly and their skills or time aren’t taken into account.

At the other side of the table, clients hope for exceptional service and believe they can tap into the most experienced resources.

If their expectations are not met, your retainers start to work against you. Such frivolous processes not only hinder efficiency of your resources, but also affect client relationships.



5. Foster a time registrations culture.

If your company is not registering hours yet, now is the time to start.

No joke, there are countless reasons why you will benefit from filling in timesheets every day.

Having your team register time, you’ll be able to break the cycle of over-servicing clients for the same cost.

Time logs will provide you with visibility into how much work has been completed for each retainer period and make sure nothing goes off at half-clock.

As a matter of fact, at the end of the month, you’ll be able to show a progress report to your clients, so everyone stays on the same page.

Time registrations are essential in the case of ‘time-based,’ or ‘fixed hours’ retainers.

Without logging time, you won’t be able to see the remaining time on your retainers and track how you’re moving against the target.

Just a small pointer here, don’t use a top-down approach when implementing the time tracking tool. If you let everyone understand the importance of registering time, the transition will go much smoother and be far less frustrating.

This can be achieved by tying time registrations to everyone’s personal goal, showing the team their role in the bigger picture, or putting emphasis on work-life balance.


6. Spot anomalies before they hurt the target.

To make sure your retainers are on track, you’ll have to monitor the progress towards your retainer targets.

A retainer target can be set in hours or £, depending on what makes more sense in your case. If the client pays you in advance, a fixed price monetary target can be your go-to.

However, if you have a fixed number of hours to spend for each client every period, then tracking time would be a more natural outcome.

So, either you run out of money, or you run out of time, you’d benefit from the overview in any scenario.


7. Be transparent with your clients.

Let’s consider an example of a typical time-based retainer, the most common in Consultancies, but fairly challenging to track.

Assuming that you agreed on a maximum number of hours, you’ll be exchanging your time for money, but still selling it in larger blocks, which means that the client trusts you.

However, there’s something you can do to nurture the developed trust, by letting your client see exactly where the time or money is going and how much has been spent.

There are various ways to report on progress and let the client in on what’s happening with retainer periods.

Clients will benefit from seeing the remaining time or price on a retainer period and the amount of work completed.

The frequency of reporting progress to the client depends on the nature of services you provide and how long your retainer period is.

If the duration of one retainer period is a month, then it’s recommended to catch up with the client every two weeks, providing that your team can accomplish an increment in this time frame.


With retainer pricing, income doesn’t swing, but if you don’t set it all up correctly and lack an overview, you might become another opponent to the retainer pricing model.


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