7 Best Practices For Managing Creative Agency Retainers

Clients often prefer to engage creative agencies through retainers, as this is a reliable and cost-effective way to receive ongoing creative services. A retainer relationship works best when both sides find value and maintain an active role in its progress. This way, you know how much time you’re spending on your client’s jobs. If you’re running over-time—or under—you’ll know that it’s time to talk to your client and adjust the retainer agreement. Here are 7 ways to make sure your retainers are the most valuable for both sides:

1. Get a Jump on It: Bill in advance

Retainers should be billed for the month in advance because your agency is reserving time for the client to produce the work in the upcoming month. Retainers can be a safety net for agencies to acquire a consistent and predictable monthly cash flow. By billing in advance, you can ensure the clients have sufficient funds to cover their expenses and invest in new opportunities.

Moreover, billing in advance establishes clear expectations for both sides. The client knows they have reserved the agency’s time for the upcoming month to plan accordingly. From the agency’s perspective, you’re also aware of your monthly commitment to plan resources and manage your workload more effectively.

To keep your billing schedule consistent and automated, use an agency management software.  For example, with Function Point, you can set up recurring billing schedules for retainers to automatically generate and send out invoices each month. This will reduce manual work and save time, ensuring that all invoices are consistent and reliable. 

2. Have a Solid Agreement

Spending time to work out the details of solid retainer agreements will protect you from mistreatment. Be sure to educate your client about processes and deliverables and discover whether their expectations are reasonable. You should develop clear project deadlines and identify limitations or restrictions. Make a clear outline of the client’s desires and what you can realistically deliver.

It’s important that you outline how much work is included in the retainer through your agency management software. You want your client to understand that you’re selling time, not a “we’ll do whatever it takes at all costs” approach to service.

In addition, if the client needs a change during the retainer period, create a change order or an amendment document accordingly. Maintaining a clear and up-to-date scope of work can avoid misunderstandings and manage client expectations effectively.

3. Establish Clear Communication and Foster Collaboration

Communication and collaboration are the keys to the success of any creative agency retainer. It helps bring everyone closer and work toward the same goal. 

To effectively communicate and coordinate with clients, you should:

  • Carry out regular check-ins with the clients to update project status and address any concerns
  • Create a system for monitoring progress and exchanging feedback
  • Encourage open communication 
  • Schedule monthly brainstorming sessions to generate new ideas, discuss creative solutions to challenges, and explore areas for improvement
  • Promote a culture of collaboration and innovation that encourages your team members to bring new ideas and perspectives to the table

One tool that can help facilitate communication is Function Point’s client portal, which allows clients and agencies to collaborate easily and securely. The portal can be used to share files, collaborate on projects, and provide feedback. It also lets you track progress and report on key metrics. With centralized information and communication, you can streamline the working process, develop a stronger working relationship with your clients, and achieve better results.

4. Determine a Fair Price

Deciding on a fair price for creative agency retainers requires careful consideration and analysis. Here are the criteria you should pay attention to when determining your retainer rates:

  1. Factors in your costs and overhead, such as salaries, rent, utilities, software, equipment, and any other indirect expenses of your agency. Add a reasonable markup to your costs to ensure a worthwhile profit margin.
  2. Consider the value you can offer to the client, including several aspects like your agency’s expertise, work quality, and the level of your services. Also, think about the market competition, as well as the pricing strategies of other agencies offering similar services.
  3. Be proactive in building a clear compensation structure for any additional work that may fall outside the scope of the creative retainer, such as rush projects, extra revisions, or unforeseen tasks. To ensure transparency and avoid any confusion, you should set up a clear and transparent fee system for such work and communicate it to the client beforehand.

A tool like Function Point retainer management software can be a great assistant to effectively and accurately build rates and estimate creative retainer costs. Its time tracking and resource allocation features allow you to measure how much time and resources are required to complete the project scope. This will inform your future pricing decisions. Additionally, Function Point’s agency financials tools can help you track profitability and determine how to improve your retainer management schedule or prices.

5. Adopt a Retainer Project Management System

Adopting a retainer project management system can be a game-changer when it comes to managing creative agency retainers. With so many moving parts involved in executing a successful project, it’s essential to have a centralized system for you to stay organized, on track, and on budget.

Function Point is an excellent project management software for managing creative agency retainers. The software offers a suite of tools to help you manage projects from start to finish, including project planning, budgeting, time tracking, task management, and invoice issuance. You can easily create project timelines, assign tasks to team members, and track progress in real-time.

Best Manage Creative Agency Retainers Using Project Management

Stay organized, on track, and on budget implementing a project management software. Plus, Increase producticity and improve project workflows.

Function Point simplifies collaboration and communication among team members with an all-in-one platform. This keeps everyone on the same page, preventing miscommunications, duplicate efforts, and missed deadlines. With Function Point, you can optimize time spending, increase productivity, and provide greater transparency and accountability to clients.

6. Track and Report on Progress

Another best practice to control creative retainers is to keep track of ongoing projects. This way, you can ensure projects are moving forward as planned and identify any potential risks that may require corrective action. 

Together with progress tracking, using appropriate reports can help you demonstrate your value to clients and highlight the effectiveness of your services with proven data. Regular tracking and reporting aid in continuous improvement, so you can ensure that your agency is fulfilling client expectations.

To help you oversee your project progress and gain visibility into your performance, Function Point provides real-time tracking and custom business reporting tools. You can generate reports on a wide range of metrics, including project status, budget, and profitability. From there, you can gain insights into your current retainers and make informed decisions to optimize your workflows. 

7. Set Up a Six-Month Review

Clients who under-use their retainer are at risk because the retainer agreement will be cancelled if they don’t see the value. To reduce the chances of this happening, set up six-month reviews with the client to check in on the regular deliverables and to remind them of the great work your agency is doing! Build this review into the retainer contract with your agency management software to allow both your client and agency to discuss the process openly and possibly re-negotiate the remainder of the year if needed.
Function Point is the leading all-in-one project management solution specially designed for ad agencies, design studios and internal marketing departments looking to streamline their business and manage retainers effectively. Our integrated software combines project management, time trackingagency CRM, financial, and business reporting tools in one convenient cloud-based system, making project management easy, effective and efficient.

In Conclusion

Creative agency retainers management can be challenging, but by implementing these 7 best practices, you can establish a productive and successful relationship with your clients. From having a solid agreement, deciding a reasonable price, nurturing a collaborative relationship, and utilizing a project management system, these approaches can simplify the complexity of managing retainers. Therefore, you can operate your agency more efficiently and deliver high-quality services to your clients.

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