A great way for freelancers to create a recurring income stream is through the use of a retainer contract, especially a high-value one. A retainer is an agreement with a client whereby they pay the freelancer a set fee each month for ongoing work.
The primary benefit for you, the freelancer, is a sense of stability, with a predetermined amount of money coming in, each and every month.
However, it can be difficult to sell high-value monthly retainers, at least at the beginning of a freelancer-client relationship. New clients are understandably apprehensive about agreeing to a monthly financial commitment if they’re unsure of the value you will bring.
Benefits of a client retainer
Developing a retainer agreement has a number of benefits for freelancers.
It leads to steady work and pay, which quickly improves your cash flow. You work with the same client over a period of months and even years. This provides you with ever-deepening insight and knowledge into their business, target markets, and industries. As such, your workflow quickens and you can deliver improved results.
Plus, working with a select few clients on a recurring basis suits some types of freelancer personalities, especially those who are shy or prone to phone anxiety.
Yet with all the benefits of a retainer agreement, they have nevertheless sometimes been viewed with suspicion and confusion, both by freelancers and their clients. This is in no small part thanks to the traditional retainer model.
The traditional retainer model
Traditional retainer agreements have usually been based around selling hours of your time. These hourly retainers can work well for certain types of services but for others, it can be detrimental to your income and productivity.
For instance, the more skilled you become in what you do, and the longer you work for the same client, the faster you’ll inevitably work. This means you’ll be doing more work in the same amount of time but with no extra financial reward.
You basically get paid less the better you become at your job. This may be high-value freelancing from your client’s perspective, but it’s certainly not when it comes to your career.
Selling hours inherently plays into the hands of the dreaded scope creep.
And this is where an alternative pricing strategy comes into view. One that will benefit not just you, but will also benefit your clients.
A more logical and lucrative alternative is to sell your services based around value rather than time. The client never needs to know how long a particular service or task takes, because they are paying for the monthly value you bring to the job rather than a set number of hours.
In this way, you can work faster, without the worry of being underpaid. Plus, you’ll bring a lot more value to the client’s project. You’ll also have a more incentivizing way to successfully sell a high-value monthly retainer to your next clients.
Productizing your freelance retainer services
We’ve mentioned productizing your services before on the Invoice Ninja blog, and for good reason. Services can sometimes seem rather opaque to potential clients, which can cause confusion, concern, and delays.
When prospects and existing clients instead get to see the features and benefits of a service laid out in a package format, they find it a lot easier to understand exactly where their money will be going.
Productizing your services is a lot like formatting and writing a good invoice. With invoicing, you break your main services down into smaller chunks and provide a mini description for each, together with the associated price. This helps the client see exactly what has been completed (or will be completed) and how it fits in with the total fee.
Likewise, packaged services can also be arranged in their component parts. These can be advertised on your website or in a downloadable document you send to interested prospects.
For example, in one package option, a freelance social media manager might offer 20 social media updates per week on four different social media platforms – no less and no more – at a single price. Another package available might include 40 social media updates per week. Yet another might also include content strategy planning and a detailed eBook.
The package price can be scaled up, with the addition of more services and products. It is irrelevant to the client how long each task or project takes you. The clients are not paying you for your time but rather for the results you bring to their unique business, based on your skills and experience.
Selling your high-value retainer services
Packaging services makes decisions easier for prospects and also a lot simpler for you when it comes to defining a new client project. But these can also sometimes be a step too far at first, if a prospect is unfamiliar with your brand.
A good way to bring a potential client onboard with a retainer agreement is to offer a paid trial. This is where the client samples your work – perhaps a couple of blog posts or a paid one-hour consultation – prior to then commencing with a retainer contract.
With good long-term marketing strategies, such as email marketing and blogging, it’s easier to build trust with prospects over time. This makes it more likely they’ll be agreeable to a retainer setup earlier on, especially when you’ve already been teaching them about the basic principles behind what it is you do.
The more trust and likeability you can build with a prospect before a retainer is even mentioned, the higher the chances of successfully selling them on the concept. You’re also more likely to attract the best types of clients.
Better value, better results
High-value monthly retainers need to be lucrative for you and valuable to your clients. When you feel you are being paid what you’re truly worth, you will do your best work, and this will reflect positively in the results you bring for your clients.
As such, you need to charge good rates while also presenting your retainer as great value for money. Productizing your retainer services makes it so much easier for prospects to understand exactly what they’re getting. You will also find it easier to sell the value of your service packages, rather than simply selling hours.