What is a retainer contract?
A retainer contract is an agreement between a client and an agency to work together for a longer period of time, often on multiple projects. It reserves a set amount of the agency’s time for a set rate. A typical retainer will be a rolling contact whereby the agency provide continuous services on an ongoing basis.
Advantages
It’s better value
Possibly the most appealing benefit is that you will often see a greater value for money as a retainer client. Not only because an agency’s retainer rate is going to be cheaper than the price for individual projects, but also the return on investment is often higher due to having a dedicated tem working consistently on and optimising your marketing.
Saves you time and resources
Even with a dedicated person or team who manages the marketing activity for your business, often companies lack the time to effectively research and plan their marketing, update content and run analytics. For this reason, we see many clients can benefit from a retainer contract. With a dedicated amount of time set on your account each month, the work should be done with no chasing or waiting required, resulting in a report presenting the marketing performance each month.
Your agency knows your business
Your agency should not be responsible for your marketing without having a good understanding of your business. It is important your agency begins with the basics: who are you? what product or service do you offer and what makes it unique? who are your target market? etc. A retainer contract gives your agency the time to get to know you resulting in campaigns that are tailored to your business and built around your company goals.
They’ll be there for you
Rather than employing separate agencies on an hourly basis, you have the opportunity to develop a relationship with your agency. This means you can pick up the phone anytime and your agency should be on hand. Do not forget that when you are signing a retainer agreement with an agency, you are both making a commitment to deliver.
Results orientated marketing
A retainer contact is tailored to achieving your business goals and the work necessary to do so. Work with a results driven agency rather than a task driven one. Some businesses choose to work with several agencies to handle different areas of their marketing campaign however, we believe working with one agency makes it easier to integrate agency projects into your larger marketing strategy and supports experimentation and optimisation.
Disadvantages
You do not have enough regular work to use your retainer time
As many businesses have busier and quieter periods throughout the year you may think in some months, it might be struggle for your agency to find enough work to do.
How to avoid this?
By having a relationship with your agency they should be able to utilise the time in the most effective way they can. It may be worth having quarterly or bi-yearly meeting to discuss progress and the plan for the upcoming months.
You cannot track how your time and money are spent
A worry for businesses when outsourcing work is that you lose the capacity to track how time is being used and whether you are getting your moneys worth in a retainer contract.
How to avoid this?
Any agency that offers a retainer contract should be transparent with their time usage. Request detailed breakdowns of what your agency has been doing with your dedicated time each month. This could be as simple as a word document that details what tasks have been completed and how long did they take each month.
You already work with another agency
You may already have an agency who is currently working with you on another marketing service like search engine optimisation. With this in mind you may think continuing to manage a number of relationships could be hard work.
How to avoid this?
We recommend your web designer also manage any web related services. We also believe that having one agency manage all your marketing makes it easier to deliver a fully integrated marketing campaign. Nonetheless, any professional agency should be comfortable working alongside another or multiple agencies. The key to success is communication between agencies and a clear and coherent planning and goals from the organisation.
You still need to allocate a budget for software, advertising, project work outside of the agreement
In a retainer contract you are hiring the marketing agency to provide certain marketing services for you. Depending on your agreement this may include the use of their software or not. For example if your agency is going to manage your email marketing you may still be required to pay for an email software provider. Similarly, an agency will rarely include the advertising budget for pay per click (PPC) advertising or social media advertising in their retainer contract, so you would still be required to set aside a budget for those. It is important you discuss this before signing an agreement.
How to avoid this?
You can avoid this being an issue for your business by considering how much budget is available before agreeing a retainer contract with your agency. We recommend you discuss with your agency if there are any additional costs they can foresee. An alternative that would ensure costs are fixed would be to consider letting your agency allocate your budget.
