I love being a resource for other designers, and I get a lot of questions every day in the form of emails and DMs about the ins and outs of running a design business. With the exception of “how do you get clients,” questions about retainers are one of the most common things that I seem to advise people on. I personally love retainers, ran my business on them for several years, and they are the only reason that I was able to quit my full-time job. I’m a huge fan, and I would love to provide a little insight by covering some of the frequently asked questions that I get so you can determine if retainers are right for your business as well. The way I use retainers today is dramatically different from the way I used them in 2015, so I will also show you how retainers can evolve and suit different business needs.
A little backstory
I quit my full-time job (I was working as a Marketing and Communications Manager doing 50% design work and 50% marketing) in 2015 and prior to leaving I secured two 40 hour/month retainer contracts that covered my salary and made it possible for me to not have a lapse in my financial contribution to my family. Some people are super free-spirited when leaving jobs and can just trust that the universe will look out for them and provide. I was pretty much the opposite of that – I wanted structure, formal agreements, and guarantees. That’s where retainers came in.
What exactly is a retainer?
A design retainer is an agreement in which a client purchases, for a specific duration of time, the ability to retain and utilize an agreed upon number of the designer’s available hours each month.
There’s probably a more eloquent description of a retainer somewhere out there but the basic idea is that a design retainer gives your client a guarantee that you will be able to provide design work for them, typically at a reduced hourly rate, for a specific period of time each month.
Let’s talk pros and cons
Value: Retainers are easy to pitch because they provide incredible value to clients. With that being said, at the center of the retainer pitch has to be a strong value proposition for the client, which is typically a reduced hourly rate with a signed contract for an extended period of time.
Consistency: Knowing that you are going to have a specific dollar amount coming in each month is a great comfort, especially if you are just starting out or are looking for a quieter season of life where you aren’t managing a lot of inquiries and chasing after potential business.
Connection: One neat byproduct of a design retainer is that it often allows you to get to know your clients on a very deep level – you are typically interacting with them daily and it’s almost like you have pseudo-colleagues and are part of their team. This can feel really nice in the sometimes isolating world of running your own business.
To an extent you are limiting your earning potential when you utilize retainers because you have committed to X number of hours at a specific dollar amount. This makes the hourly rate a fixed rate (you can’t work faster and make more money). This is often considered the major downside of retainers.
If your business is relying on multiple retainers, it can be hard to know how far you can extend yourself because you need to keep your retainer clients top priority and be prepared to accommodate them if they go exceed their hours by a bit. So that can make it difficult to know how many additional projects you can take on per month. Typically this is something that you figure out and get comfortable with within 1–2 months of running a retainer agreement.
Prioritizing retainer clients
A lot of the questions that I get about retainers involve designers who are frustrated by something happening with their clients that isn’t going the way they want it to for whatever reason.
I want to emphasize that what you are promising a client when you sign a retainer contract is that you are going to prioritize them because they have made a long-term financial commitment to you. This is VERY important to remember and honor. And if you are uncomfortable with this it’s probably time to come to terms with the fact that retainer clients are not a good fit for you. You can’t tell a retainer client that you need to push back a deadline because you had a new quick turn project come up. They are paying to be a priority and it’s often a large financial commitment. My philosophy was basically – you are investing in me for a long period of time. I am yours and I am here to serve you.
How do you feel okay about this? Get your pricing on point. If you feel you are being compensated fairly it is a lot easier to give yourself freely to your clients.
Okay so let’s get down to the nitty gritty!
How to structure a retainer proposal
I am going to share with you an example of my ORIGINAL retainer structure from 2014. This is the exact proposal that I sent out that set off a chain reaction and allowed me to quit my job six months later. While my hourly rate has changed dramatically, I use the exact same hour/rate structure to lay out retainers today as I did in 2014. I will say that my proposals are a lot happier looking now. I guess I went through a bit of a moody phase!