When you’re thinking of scaling up your marketing efforts, chances are you might begin working with an agency.
If you have a particular need for a lot of content or creative input, a big decision awaits you:
Should you work with an agency retainer?
While there are benefits to sticking with project fees for each and every assignment you need from your agency, the option of an agency retainer is one that many businesses are opting for.
In this article, we’ll look at the pros and cons of an agency retainer, and give you the insights you need to make the best choice for your brand.
What is an Agency Retainer?
This is one of the most common agency payment models used today.
Whereas project-based is pretty self-explanatory, an agency retainer needs a little elaboration to understand fully.
Put simply, a retainer is when an agency and client make an agreement that they will work together for a long period of time, collaborating on several projects.
The actual retainer allows the client to reserve a set amount of the agency’s time every week or month, for an agreed rate.
This involves some thorough forward-planning so that you can make accurate projections on the scope of your project(s), its goals, and the time required on a weekly and/or monthly basis.
If you have a clear vision for your goals and the needs of your projects, an agency retainer is an effective way of ensuring you get preferential treatment from your agency.
Some retainers run on a month-by-month basis, though others usually cover a longer time period.
The Key Differences Between Agency Retainer and Project-Based Fees
The key differences are as follows:
- Agency retainers have a flat monthly fee. Project-based services are paid per project.
- Agency retainers cover a wide scope of services and deliverables. Project-based services are much more defined.
- Agency retainers offer dedicated personnel for the account. Project-based services often tend to rotate personnel, depending on available talent.
- Agency retainers are used for long-term goals that consider ongoing marketing needs. Project-based services focus on short-term goals and one-off assignments.
E29 Marketing offers both avenues and can work with clients on defining their projects, providing the flexibility of hybrid options too so you can have the best of both worlds.
The Pros and Cons of Using an Agency Retainer
To give you a clearer picture of the benefits of using an agency retainer, and the potential drawbacks, here is everything you need to know to weigh up the decision.
Pro: It is Less Expensive
- Nothing matters more in business than your bottom line. With a retainer, your rates will always be less expensive, which makes this the best benefit.
Con: You Might Not Have Enough Work to Use the Retainer Time
- Sometimes, there may be a quiet spell where you don’t have enough work for your agency. This can lead to some retainer time not being used, which could be a waste of money.
- To avoid this, keep in contact with your Account Director to ensure there is plenty of work planned in advance. By staying proactive, you can ensure your agency is always kept busy.
Pro: You Can Delegate Tasks You Don’t Have Time For
- There’s a lot to do in marketing, and unless you have specialists on your team, it can be very time-consuming to try and manage everything from planning, execution and analytics yourself.
- With an agency retainer, you have the time on your account to put to good use. You can be confident all work will be done, which makes it easy to put it on their plate, freeing your time for other tasks.
Con: It’s Hard to Track Where Time and Money is Spent
- This is a big concern about outsourcing marketing, as you can lose a little control over time management for the people you are paying.
- However, good agencies tend to be pretty transparent about how they use their time, which means you can request a detailed breakdown of what they have done each month.
Pro: You Have a Dedicated Agency that Knows your Business
- With project-based fees, typically you get a freelancer or agency who will approach the work as a one-off arrangement. They aren’t always concerned with getting to know your business on a deep level.
- By contrast, having an agency retainer invites an agency to the table, which makes them more likely to take more interest in truly getting to know your brand, your goals, and your audience.
- The best agencies will be more invested in your business and will want to continue building your brand the longer they are working with you.
Pro: The Costs are Fixed
- This makes spending more predictable, which is good news for your budget and financial projections. It also gives you more flexibility in project management, as you don’t need to negotiate with different agency personnel for every project or get clearance from senior management.
Con: You Have Several Agencies
- Digital marketing is a wide umbrella, and below it you may have a separate agency for specific aspects, from web design, SEO or copywriting, to advertising and social media.
- As these begin to stack up, you might find yourself stressing over managing all these agency relationships.
When an Agency Retainer is the Right Choice For Your Business
For businesses who really have a clear vision for the future, and believe they have the resources, products, and potential to operate for many years – then there is a lot to gain from an agency retainer.
If you are a big brand, or have the plans to become one quickly, then you’ll most likely have a lot of work to do. Being able to delegate this to an agency takes the weight off your own in-house team, allowing the company to be more productive as a whole.
Not only will you save time and money in the long run, but you will also gain a dedicated agency that understands your business and their goals.
Ultimately, this will result in better content, and a better ROI on your marketing.
You can forge a strong working relationship with an agency that you trust and will never have to worry about their availability whenever you need them.
This long-term partnership is also likely to pave the way for more experimentation and optimization over time.
While the upfront costs may not be possible for smaller start-up businesses, by booking in advance you can actually save money. And, it definitely works out to be less expensive than budgeting your projects individually.
This makes it straightforward to include the agency expenses into your long-term financial forecast and the overall marketing strategy of your company.
When an Agency Retainer is the Wrong Choice for Your Business
If you don’t already have experience working with an agency, then jumping into a long-term arrangement might not be a wise choice.
It’s important to get some experience working with several agencies first to figure out if you work well together.
Moreover, it’s essential that your company has already got a well-defined plan for the future. This must be mapped out, so you can clearly articulate what needs to be done to accomplish your goals. Without this, an agency retainer could be a bad move that leads to more stress than its worth.
By underestimating just how much help you need, you run the risk of upsetting your agency with unexpected changes to the workload. This could lead to tensions in the relationship.
Conversely, overestimating your needs could lead to a colossal waste of money as you have paid for the agency’s time but have nothing to give them.
The Decision Must be the Best for Your Company
An agency retainer isn’t for everyone.
While the benefits are certainly attractive, it’s important to weigh whether or not that is enough for you to go down that road.
An agency retainer is most beneficial to companies who understand the value of a steady relationship. They have a long-term plan, many well-defined milestones they would like to reach, and they are looking forward to focusing on that journey.
Project-based fees are good for smaller businesses with short-term goals and small budgets, but as you grow, the benefits of an agency retainer are well worth considering.
With help from a flexible agency like E29 Marketing, you can figure out a long-term plan best suited to your needs.
As your business grows, you might find the workload is getting too much for you or just one agency. They might specialize in written content, whereas you need experts in graphics or marketing.
By choosing experienced professionals, you can form a network of agencies that are comfortable working alongside each other.
So long as everyone is transparent about their duties and capabilities, you can build strong working relationships that allow your brand to flourish from the help of these specialized organizations.