Your Guide To Freelance Retainers

A freelancer retainer is an agreement according to which a freelancer guarantees a certain amount of time or work per month to a client, at a prearranged rate. There are many types of custom retainers according to various goals and preferences. The most common types of retainers are illustrated below through two examples. 

• Time-Based: Kay is on a time-based agreement per month for audio mastering with Inertia Labels. She charges $4,500 for 100 hours of work. The rate and hours are agreed upon in advance, and applied automatically every month. 
• Project-Based: Kay is on a project-based agreement for delivering 15 mastered songs, 100 mastered clips, and 20 mastered trailers. She will charge $7,000 for this project. Here, regardless of how long it takes Kay, she will be paid the aforementioned sum prior to, or upon completing the work.

Read on to find out the pros and cons of using retainer agreements as well as tips for building custom packages to maximize your earnings and efficiency. 

The Advantages

Freelancers can use retainer arrangements to streamline their revenue and manage their time effectively. Take a look at the following advantages. 

• Predictable Income - Recurring payments contribute to a guaranteed positive cash flow for a freelancer, alongside accurate budgeting for the client.
• Stability - Instead of spending time, energy, or resources on acquiring new clients, a freelancer can focus on their current clients and their needs. 
• Safety And Risk Mitigation - Guaranteed cash flow helps freelancers limit their losses if a project is terminated prematurely. 
• Work-Life Balance - By knowing how much time is needed for each project, retainers can help freelancers schedule tasks effectively while pursuing other interests. 
• Specialization - By working long-term with the same client, a freelancer can become an expert at the services they offer while developing a good rapport with the client. 
• Upfront Payment - Retainers can limit the need to chase payments by typically getting paid in advance. 

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The Disadvantages

These agreements are not all a bed of roses. Take a look at some of the disadvantages below.

• Lower Rates - When it comes to ongoing working relationships, clients expect lower rates as is the standard conduct, unlike one-time projects.
• Inability To Raise Prices - Freelancers might be stuck in a cycle of lower rates until a contract ends. 
• Exploitation By Clients - Clients can sometimes overwork freelancers within the framework of an ongoing agreement. 
• Capping Profits - By being committed to a limited income with one client, freelancers could miss out on doing odd jobs that could yield more income.  
• Dependency - If a freelancer has only a small number of clients, losing one contract might mean foregoing a large chunk of income. 

How To Build Packages 

Instead of selling one service or skill, you can include extra services within one package so that clients feel that they are getting more value. Moreover, different clients have varying needs and specialized packages will allow for customization. 

Here are three ways that you can build packages for customer retention. 

Optimization

Look for ways to enrich your offerings by providing optimization of an existing asset. For example, if you are a developer, the next time you offer a retainer for a client squeeze in optimization where you assess and modify the performance of the site. 

Insurance

You can add to your offering by providing insurance for the work you do. For instance, you can offer the original document in case the client were to lose the work to a cyberattack. 

Coaching 

A brilliant way to upgrade your service is by offering free training for clients. For example, if you are an SEO company, add one hour of consultation as a freebie to your clients. 

Top Tips

Before you start making packages, take a look at the following professional tips. 

• Contract Specificity: Being specific about the total hours, duration of the project, total deliverables, or other nuances of the work will protect your interests.
• Two-Way Efficiency: Allowing the client to use and roll over unused funds paid will help you maintain a long term contract. 
• Rates For Extras: Let the client know beforehand how much you will be charging extra in various scenarios.
• Give A Trial Or Sample: Before the client signs a long term contract with you, it is best to ensure trust on both sides with a paid or free trial or sample of your work. 
• Be Flexible: Retainer agreements are set in stone, but circumstances change at times. Find a way to be flexible with exit points for both sides. 

Conclusion 

Retainer agreements can streamline consistent income while helping you build strong relationships with select clients. Offer multiple packages to service different types of clients, and create a broad range of add-ons such as optimization, insurance, or training to make your package as appealing as possible. 

Ongoing business agreements can be safe, efficient, and effective for both parties, and the most important elements of such a relationship are clarity, transparency, and value-packed service which is tailored to your clients.