How to Sell Your Clients on a Monthly Retainer | Proposify

How to Sell Your Clients on a Monthly Retainer

One of the hardest parts of running an agency is the lack of steady income. You need to find ways to bring revenue through the door each and every month. Retainer agreements can help take you from reactive to proactive when it comes to closing deals, and provide you with assets to keep your business afloat. To avoid any stall in cash flow, consider selling your clients on monthly retainers. Here’s how to do it right.

9 min. read

When you’re trying to scale your business, there’s no worse feeling than seeing sales drop. It’s like the feeling you get on a rollercoaster when it plummets...except less exhilarating. Several challenges during a project process can stall your cash flow and puncture your profits:

  • The sales cycle can take months to close a new project contract.
  • When you finally close the deal, you only get paid a deposit.
  • You perform the work, and depending on the size of the project, you may not get paid again for another month or two.
  • Projects sometimes go dormant for chunks of time because clients don’t get back to you with feedback or content.
  • Depending on the client’s pay cycle, you sometimes have to wait weeks/months to get paid, not to mention the fact that some clients need to be chased down or they push back on paying because they don’t “feel” the project is finished (surprise!).

Needless to say, this is a nightmare for your cash flow. You may have thousands of dollars in unpaid receivables that you haven't been able to collect, but your fixed monthly expenses still need to be paid regardless. What you need is a way to regulate your revenue, and the best way to do that is with a monthly retainer fee.

What is a retainer?

A retainer fee is an amount of money paid in advance by a client to assure your services will be available to them for an extended amount of time. The client pays a lump sum upfront, or makes a recurring monthly payment, and you work with them on a long-term project, or provide them with access to services each month.

Retainer agreements can bring stability to your business, get you out of the firefighting mode of needing to win new projects all the time, and provide assets within a company or contract.

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Productize your retainer agreement

Now that you know what a retainer is, how do you start selling them?

Many agencies struggle with selling retainers because a) they’re afraid to ask their clients for a monthly commitment, or b) they aren’t able to communicate the value to clients, so the clients say no.

To take pressure off asking your client to buy a monthly retainer agreement, productize your retainer by explaining the services they’ll find valuable each month. You could offer a monitoring service, marketing campaign, or anything you feel your agency can provide that will remind your client why you’re an asset to their business, and why they should work with you every month.

Not only will this help you seal a retainer contract, but it will ensure your client has a thorough understanding of the value you bring to the table. If whoever’s in charge of budgeting asks “What is this monthly fee?”, you want your client to be able to explain that it’s a necessary expense for the productivity or growth of the business, rather than have them say that it’s a monthly fee “in case” they need to work with you – that it’s an essential relationship for the advancement of their work.

Get your foot in the door first

As with any new relationship, you don’t want to overstep your boundaries with a new client. It’s unlikely that anyone is going to agree to pay a fixed monthly retainer fee for X number of months without getting a taste of what they’re buying. Think of it like test-driving a car before buying it.

Offering a free trial of your product or service allows customers to get a clear idea of how it will work for them and hooks them into paying long-term if it’s something they deem valuable. Similar to how cell phone companies give away phones in exchange for fixed contracts, SaaS companies offer trial periods to use their software in the hopes the user will be compelled to upgrade to a paid plain at the end. You need to prove to the client that to get the most value from your services, they need to use them every month.

There are other ways to get your foot in the door with your client, like selling them an upfront discovery session as a way to kick-off their project. Many agencies give this away for free at the proposal stage but it’s actually better to sell a discovery as a paid service, since selling an upfront engagement that costs $500-$3,000 is a lot easier than selling a project build that costs $5,000-$100,000. Clients don’t even know you yet so how can they trust you with their project?

Discovery sessions are a way to ease clients into a project with you before compelling them to make a big commitment. The process also makes it easier for you to develop a more accurate project estimate because you’ll know how to meet their needs. Rather than offering it as an option to your clients, instead, emphasize that the discovery phase is a critical component of the process.

The discovery session is your opportunity to build trust and to show the client the high-quality work you can do. It’s your time to shine, but it’s important to remember that during this phase you don’t want to come across as pushy or like your only goal is to sell the client.

Look for opportunities to show the client areas that can be streamlined to save them money. When they realize you’re there to solve their problem and not milk them for all they’re worth, they’ll be more inclined to trust your future recommendations.

Sell value, not hours

Now that your client is on board, they’ve tried your product, and understand the value you provide them, sell them on that rather than billing them by the hour.

The problem with hourly retainer pricing is that you end up punishing yourself for being efficient, thus limiting your profitability. The first time you do something, it always takes the longest, but each time after that you get faster and better at it. If you’re paid by the hour, the better you get at your job, the less you get paid. That’s not right.

Instead, sell your client on what you’ll do for them every month and demonstrate why it’ll bring them value in the long term.

For example, a website maintenance retainer might include these services:

  • Technical support and bug fixes
  • Phone/email-based help on using CMS (e.g., Wordpress) and email management tools (e.g., Mailchimp)
  • Keep Wordpress CMS and plugins up-to-date
  • Communicate with hosting provider regarding email/server issues
  • Minor updates and enhancement to the design/content based on user feedback and testing
  • Monthly analytics reports and recommendations

While an inbound marketing agency may provide these services in a retainer:

  • Hubspot integration and support
  • One blog post/week
  • Two landing pages/CTAs per month
  • One email campaign/month
  • One top-of-funnel offer (e.g., ebook) per quarter
  • One post on all your social media platforms per day

Listing everything included in the retainer fee manages your client’s expectations and helps them plan their yearly goals, based on the value you’ll bring them.

To really hit home why your client needs to work with you on a monthly basis, include the end-goal in your retainer proposal and explain the results you’ll deliver. “By the end of the 12-month contract, our goal is to generate 500 leads every month through your website.” This tangibly demonstrates to your clients how they’ll see a return on investment.

Keep your contracts clear and tight

The only thing worse than losing revenue is letting scope creep take over projects because of a vague contract.

To avoid clients asking for ‘minor’ fixes, updates, or changes through each step of the project, make sure you’re clear about what is included in the retainer and what isn’t. If you use slippery words like ‘minor,’ then define what ‘minor’ means – is ‘minor’ something that takes less than three hours? Or something that takes less than one day to complete?

Similarly, if you use the word “bug fixes,’ then outline the difference between a bug fix and a feature. For example, in your retainer you could say, “a bug means when the system is designed to perform a function, and it doesn’t work. A feature is a function that is desired, or even needed but isn’t originally included in the design.”

If your client asks for something that falls outside the scope of the retainer, it’s not the end of the world. Just be sure to outline the process of additional work for them, so they know what to expect. You could pull back on other services that month or include a separate work order for the request.

Even if you aren’t charging per hour, you’ll still want to record your hours using time-tracking software to monitor your profitability.

Prove every month why you’re worth it

One of the hardest parts of working long term with clients is maintaining your enthusiasm. New projects are full of wonder and excitement, but after a while, disagreements can come up, or you might start getting bored of the work. Even if none of that happens, you never want to take your client’s business for granted and only deliver them the bare minimum.

It’s critical to keep your enthusiasm high for the length of the contract; otherwise, your client may feel you aren’t meeting their expectations, they’ll be less likely to continue working with you, and may also be less likely to recommend you to other businesses in their industry.

If you go above and beyond every month (while still maintaining profitability, of course), work to deliver clients the value you’ve outlined, and show them how much peace of mind you bring, they’ll be more likely to renew their contract at the end of the term.

Securing even a few monthly retainers can buy you some breathing room for your business. Retainers help avoid end-of-month panic as you scramble to land new clients, allow you better schedule projects, and plan for growth. Plus, working with clients over a longer period builds lasting business relationships, develops trust, and helps you reach your profitability goals.

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