5 retainer-based pricing best practices
Let’s dive into the best practices we covered in video, as well as a few more, in a bit more detail:
- Offer retainers to satisfied clients
- Position the value of your retainer
- Create tiered packages to serve different client needs
- Know when a new scope of work is needed
- Shout about your success stories
Offer retainers to satisfied clients after you’ve wrapped a project
One of the most common questions about retainers is how to start offering them, or when you know you’re ready to start offering retainer services.
The truth is, agencies of any size can offer retainer services as long as you have good client relationships, solid processes in place, and a team that works well together.
Once you’ve wrapped a successful project with a client and they’re feeling positive about your work, consider what services they would now benefit from, as well as the maintenance and support they’ll need to make this project a long-term success. For example, if you’ve just completed the project of integrating Klaviyo with a client’s website, you might want to pitch them a ‘growth marketing’ retainer that will help them see the most success with Klaviyo.
A great time to discuss this is at the project close meeting, where your client is reviewing deliverables. Have a minimum monthly engagement time that you set as part of your retainer, like two or three months, so that your clients can commit to a relatively short time period at first and then you can review after that. If you can deliver the value they’re expecting, you can expect the client to sign on for a longer commitment.
Unsure how to lead a project close conversation? Check out our "Graduation call checklist".
Position the value of your retainer to clients
Retainers generate recurring revenue for your business--but they also benefit your clients. Let’s run through 3 key benefits that clients get from keeping an agency on retainer rather than simply working with them on a project-by-project basis.
- Become experts in their business.
The best agencies are like extensions of their clients’ teams. Working on a retainer allows your staff to become deeply embedded in your client’s brand, understanding their goals and objectives to proactively recommend improvements to their strategy. The more aspects of your clients’ digital marketing that your agency handles, the vaster the opportunities will be for spotting opportunities that save your client money, time, and risk. - Maintain long-term success.
Short-term projects are great for impressing clients with your team’s amazing work. But in the digital marketing world, things move fast and quickly go stale. With a maintenance package like a retainer, you can work on adjusting and refining your initial piece of work to ensure it can scale with your client’s business. - Budget more easily.
Yes, the recurring revenue is great for your agency, but it’s also good for your client’s financials. Knowing exactly what they need to spend each month for the maintenance of their account allows for better forecasting and helps them avoid nasty surprises and ‘emergency costs’ when problems crop up.
Believing in the value of your own services will help you to respond to objections clients may have in opposition to coming on board for longer contracts.
Create tiered retainer packages to serve different levels of client needs
Put together service levels, or tiers, within your retainer. It’s common to start with 3 tiers that offer increasingly robust service packages - let’s call them Bronze, Silver, and Gold, for example. Different clients will have different levels of needs depending on things like budget and internal resources, so this structure gives them flexibility while also ensuring that you get paid for the work that you want to do. Here are 3 benefits of offering tiered retainer packages:
- Simplify the sales process.
Being upfront about what’s included in each package eliminates the need for custom engagements and simplifies the conversation with your sales team. - Prevent scope creep.
A retainer with clear tiers helps to prevent scope creep by committing both you and your client to functional goals that are both manageable and crucial to long-term success. - Make upgrading easy
Offering tiered packages maximizes the scalability of your retainer. As your client’s business grows, so will their need for more maintenance work to manage a more advanced setup. Having tiers readily available makes it a no-brainer for clients to upgrade once they’ve outgrown their current tier.
Explore the Klaviyo Pricing & Packaging Workbook ‘Beginner Retainer Examples’ and ‘Intermediate Retainer Examples’ tabs to get an idea of what these tiers might look like for your Klaviyo services. If you’re not doing this already, start diligently tracking the time your team spends on different deliverables - this will help you price your services correctly.
Know when a new scope of work is needed
Most agencies continue to offer project-based services alongside their retainers. Projects can still be a big source of one-off revenue bumps for your business, and provide the opportunity to work with exciting logos without the commitment of a complex retainer.
For instance, if your client starts suggesting using some of their retainer hours to work on an exciting new idea they’ve thought of, then it’s your time to stand firm! Remind them that the retainer is for recurring tasks that are essential for their brand’s long-term success, and that any net new projects will necessitate a new scope of work and an additional cost based on that scope. A retainer is not project work, but one of the key benefits of a retainer is that they help you and your client to collaboratively identify opportunities for future projects together.
Shout about your client success stories
We’ve already talked about how long-term business success is a huge benefit of a retainer for your client, but what about for you? Clients whose business grow significantly under your retainer are the perfect candidates for case studies and testimonials, and with ongoing opportunity to monitor results and refine strategy, you have access to a wealth of data to help you prove value to prospects.
Once you hit a major milestone with a client, ask them to be part of a case study that your marketing and sales teams can use to sell new clients on the value of a retainer, creating a self-perpetuating flywheel of new business. (We've put together this co-brandable case study template to make creating case studies even easier!)
Follow this 3-step formula to put together concise, impactful case studies:
- Problem: Exactly what the client’s pain points were, which areas they were struggling in, and which metrics weren’t hitting the mark.
- Solution: A summary of the work you did to get them where they wanted to be. Include as much detail as possible about the tactics you used and the collaboration between you and the client.
- Results: Exactly how much growth or success your client saw month-over-month or quarter-over-quarter after bringing you on to manage certain operations. Include a quote or testimonial from the client about how happy they are with the results, and remember to get official sign-off (using a contract) for exactly what data and details you can use.
Once you’ve hooked a prospect with your case study, offer them a free account or website audit. The audit can help uncover where a prospect could most benefit from your services, and will help you pitch and package your retainer to them.