5 Steps to Keeping your Creative Agency Retainer Jobs Profitable

There are various concepts that creative agencies commonly refer to as a retainer. In this case, a retainer clientis a client who is billed monthly (or sometimes even weekly) for work being done by the agency. The recurring billing is often a flat rate with hours and expenses being tracked either directly to the retainer job set up in your agency management software or to individual jobs that are created to track the work.

The benefit to having retainer clients is that there is consistent cash flow (usually monthly) coming into the agency for the duration of the contract. The problem with retainer work is that if you’re not careful you can blow through your budgeted time very quickly and turn a potentially profitable client into one that does nothing but cost you money and cause your entire team way too much stress. Therefore, make sure that the following 5 steps are part of a workflow.

5 Steps to Lock in a Retainer Process

1. Ensure that the client has reasonable expectations from the start.
   • Don’t just say you’ll do whatever it takes, make sure they understand that time is what you’re selling to them.
2. Track all of your agency’s applicable time and expenses to the retainer (or individual jobs that make up the retainer).
   • It is very important that all team members track time accurately and that nothing is missed.
3. Bill your client for the month in advance.
   • Bringing in money at the start of the job will help with cash flow immediately.
4. Present last month’s detailed timesheets and expenses to the client with next month’s invoice.
   • Being open with these costs will allow the client to see what you are doing for them, including which months are under budget, and which months have gone over budget. This detailed reporting will help with retainer planning and negotiation both with this client and future retainer clients.
5. Set-up a six-month review with the client – a retainer relationship will only work if both sides find the value in it.
   • Build this review into the contract so that it will allow both your client and agency to discuss the process openly and maybe even re-negotiate the remainder of the year if needed.

If you follow these five simple steps, your creative team will thank you for making their lives easier and senior management will thank you for ensuring the agency is actually making money. The cash from these clients is important, but not if you’re turning other (more lucrative) billable work away!

This article was contributed by former Function Point employee, Tate Lillies.