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Re: Hourly Vs. Retainer?

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  • miked918
    I would echo that point a bit. Yes, there are benefits for the agency for a monthly retainer. But, for any ethical, fair agency person, you definitely do your
    Message 1 of 21 , Dec 6, 2004
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      I would echo that point a bit. Yes, there are benefits for the agency
      for a monthly retainer.
      But, for any ethical, fair agency person, you definitely do your best
      to ensure that the client is getting its benefit from the fee.
      Otherwise, it'll be gone at the end of the contract, and with a
      bitter taste in the client's mouth for such an arrangement.

      With monthly fees, I give monthly or quarterly reports on the
      projects applied to the fee, as well as the editorial coverage (my
      emphasis is in media relations).

      My company has a client that has a monthly retainer fee for all work,
      other than outside costs. It's early still, but the client like it
      because of the fewer invoices it receives. And, we do provide a
      monthly status report, with what's been billed and what we've done
      for each project.

      Granted, early on, the marketing and others people we deal with
      weren't sure how it worked, so they didn't use us. We can only be
      proactive so much. In the recent couple or so months, we're tracking
      pretty good.

      Mike
      _____________________________________
      Michael Driehorst
      Media Relations Manager
      Maumee, Ohio 43537-4043 U.S.A.



      --- In prbytes@yahoogroups.com, Dennis Bailey <dbailey1@m...> wrote:
      >
      > Well, I disagree. I give all my clients a work plan with specified
      > deliverables, along with a bill for a monthly retainer based on
      > estimated hours. I'm always willing to listen to a client and
      > re-negotiate if he or she feels I didn't do the work that was
      required
      > of me in any given month. And my contract specifies that if a
      project
      > requires extraordinary hours beyond what is included in the
      retainer, I
      > will bill the client on an hourly basis over and above the retainer
      > amount, or stop work for the month and pick it up in next month's
      > retainer. It's the client's discretion. Anyway, I'm free to be
      > "creative and proactive" on the project - since the more work I put
      in,
      > the more money I'll get - rather than being "creative and
      proactive" on
      > padding the hours. I've never seen a client save money by
      requesting an
      > hourly rate.
      >
      >
      >
      >
      >
    • kezia_jauron
      ... If there s anyone on this listserv who meets that description - charging a client for work that is not performed - we should chase them like illiterate
      Message 2 of 21 , Dec 6, 2004
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        --- In prbytes@yahoogroups.com, david davis <albiondd@y...> wrote:
        > the retainer is loaded in favour of the consultant/agency because
        > it gives them the comfort of a positive cash flow even if they do
        > not undertake any client work during the month.

        If there's anyone on this listserv who meets that description -
        charging a client for work that is not performed - we should chase
        them like illiterate villagers going after a livestock-stealing
        monster and stone them to death. Unsophisticated clients may think
        that's true, but they're very, very wrong.

        Having worked with startups and established companies, large and
        small, public and private, there doesn't seem to be any pattern to
        the type of client who might prefer a retainer versus project
        pricing. But if you determine _why_ a company might be leaning
        toward an hourly rate you should be able to address the objection
        better.

        Many large public companies have a policy that they will sign _no_
        contracts with outside consultants, period, and there's just no
        getting around it. If you want to work with them you'll play by
        their rules.

        If it's a brand-new company on a budget, the "no surprises" billing
        and reduced project fees may mean a retainer actually makes more
        sense for them - especially since there is always a large volume of
        up-front work to do for a new client and they may be very surprised
        indeed.

        If they're in a somewhat seasonal business and/or they don't think
        they need you equally every month, explain to them that PR is
        largely cumulative, and they will need you more in slow times than
        when they are active. They can't afford to slip under the radar,
        then have to re-build mindshare when they're busy, so you'll need to
        be very creative in the off times.

        If a company wants to kick the tires before committing to a retainer
        agreement, find out what they're going to expect beforehand - you
        may not want their business. (This has been universally our
        experience. You can't win, so don't play.) The same goes for clients
        willing to sign a retainer agreement, but at a discount for the
        first three or four months until they "see results." They will make
        you miserable, and they will never have a change of heart and start
        paying your full retainer no matter how well you do for them.

        Lastly, however, I wouldn't say that a retainer is always in the
        agency's favor - and a client who thinks they'll get better service
        with an hourly agreement (as David suggests above) should think
        again! Around here we are way more likely to allow our retainer
        clients to walk all over us and be generally abusive. When they call
        you have to talk to them. When they need a "favor" you have to do it
        for them. When they screw up you have to fix it. When they squalk
        you have to mollycoddle. (Heck, some of our project clients we don't
        even admit we're working with.)

        I don't make solo business decisions around here, but I've noticed
        that when we're hungry we make really bad ones, and I'm sure that's
        not unusual!
      • david davis
        My comment seems to have stirred up a hornets nest but I have not noticed anyone denying that they don t enjoy the cash flow comfort of a retainer. Equally,
        Message 3 of 21 , Dec 6, 2004
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          My comment seems to have stirred up a hornets' nest but I have not noticed anyone denying that they don't enjoy the cash flow comfort of a retainer. Equally, by the very nature of the PR business, there will be periods when the level of client work is so low that the retainer is not justified, yet the agency still receives it. Such a situation is often not the fault of the agency but the client who has failed to deliver information or is stalling on making a decision.

          David Davis

          kezia_jauron <kezia@...> wrote:


          --- In prbytes@yahoogroups.com, david davis wrote:
          > the retainer is loaded in favour of the consultant/agency because
          > it gives them the comfort of a positive cash flow even if they do
          > not undertake any client work during the month.

          If there's anyone on this listserv who meets that description -
          charging a client for work that is not performed - we should chase
          them like illiterate villagers going after a livestock-stealing
          monster and stone them to death. Unsophisticated clients may think
          that's true, but they're very, very wrong.

          Having worked with startups and established companies, large and
          small, public and private, there doesn't seem to be any pattern to
          the type of client who might prefer a retainer versus project
          pricing. But if you determine _why_ a company might be leaning
          toward an hourly rate you should be able to address the objection
          better.

          Many large public companies have a policy that they will sign _no_
          contracts with outside consultants, period, and there's just no
          getting around it. If you want to work with them you'll play by
          their rules.

          If it's a brand-new company on a budget, the "no surprises" billing
          and reduced project fees may mean a retainer actually makes more
          sense for them - especially since there is always a large volume of
          up-front work to do for a new client and they may be very surprised
          indeed.

          If they're in a somewhat seasonal business and/or they don't think
          they need you equally every month, explain to them that PR is
          largely cumulative, and they will need you more in slow times than
          when they are active. They can't afford to slip under the radar,
          then have to re-build mindshare when they're busy, so you'll need to
          be very creative in the off times.

          If a company wants to kick the tires before committing to a retainer
          agreement, find out what they're going to expect beforehand - you
          may not want their business. (This has been universally our
          experience. You can't win, so don't play.) The same goes for clients
          willing to sign a retainer agreement, but at a discount for the
          first three or four months until they "see results." They will make
          you miserable, and they will never have a change of heart and start
          paying your full retainer no matter how well you do for them.

          Lastly, however, I wouldn't say that a retainer is always in the
          agency's favor - and a client who thinks they'll get better service
          with an hourly agreement (as David suggests above) should think
          again! Around here we are way more likely to allow our retainer
          clients to walk all over us and be generally abusive. When they call
          you have to talk to them. When they need a "favor" you have to do it
          for them. When they screw up you have to fix it. When they squalk
          you have to mollycoddle. (Heck, some of our project clients we don't
          even admit we're working with.)

          I don't make solo business decisions around here, but I've noticed
          that when we're hungry we make really bad ones, and I'm sure that's
          not unusual!







          Yahoo! Groups Links










          David Davis


          http://www.askdd.com the PR industry's " agony uncle"


































          [Non-text portions of this message have been removed]
        • Ned Barnett
          I think it s all a matter of how you do business, Dennis. I prefer hourly rates to retainers - retainers tend to have me doing more work for less money - with
          Message 4 of 21 , Dec 6, 2004
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            I think it's all a matter of how you do business, Dennis. I prefer hourly
            rates to retainers - retainers tend to have me doing more work for less
            money - with hourly, clients pay for what they get - no more, no
            less. That makes sense.

            When I have hourly clients, they commit to a minimum number of hours per
            month, and pay for that up front. If they don't use the hours budgeted, I
            roll them over. If they exceed the hours (by more than 10%) then they pay
            extra - but first, they decide to either keep going and pay more, or wait
            until the start of the next month.

            They have choices - and properly trained, clients prefer choices.

            At 06:02 PM 12/3/2004, you wrote:


            >I hate hourly rates. You just can't budget for them. To be honest, I
            >tell clients who want hourly rates that it's not a good deal. For one
            >thing, my hourly clients tend to get shoved to the bottom of the pile,
            >I'll do it when I can get to it. While my clients on retainer know
            >what's expected, and I know what's expected of me month to month.

            What if they want more services than you feel the retainer is worth? How
            do you deal with that without pissing them off?


            >Plus, I never want my client not to call me because he thinks I'll
            >charge him for the call. For a monthly retainer, where I can estimate
            >the hours involved and expect a certain rate, a client can call me
            >virtually any time and it's included in the retainer. If I agree to an
            >hourly rate, I'll charge the client for the time I spend in my car
            >thinking about their case and they'll probably end up paying more.

            Right now I have two retainer clients - for one of them, the work has
            already exceeded what I think is reasonable for the retainer. Fortunately,
            so does the client, so I'll have no big problem arranging for an equitable
            adjustment this month. The other, I've laid out very specific duties for
            the retainer (actually, three sets of different "deliverables") - and the
            client knows that anything beyond one of those three sets of deliverables
            becomes billable. They're new at this, so preferred the retainer. Over
            time, I expect them to want to convert to hourly - we'll see.


            >Another thing: I don't know about you, but I've been doing this long
            >enough that I have established good contacts in government, the media
            >and the business world. My client might want me to make a call to
            >someone in the governor's office, for example. I'm in a position where
            >they'll take my call, listen to me and even agree to a meeting if my
            >client requests it. The call itself might only take 10 minutes. But
            >let's face it, not everyone can get that kind of service, and it's just
            >not fair to me to charge an hourly rate for the call. What would it be?
            >Thirty-five bucks? When clients hire you, they hire your rolodex, your
            >experience, your contacts, and they should pay for that.

            That should be built into your hourly. Sometimes you'll take a lot of time
            to do something mundane (last night, I spent 7 hours constructing a media
            list for California business media). Sometimes a single call will do wonders.

            If all you do is make the high-end calls, then a retainer is worth it. I
            once paid an ex-Congressman $25,000 to solve a problem - he solved it in
            under 10 minutes, with one phone call (I was there, watching as he did it)
            - and I was damned glad to pay him that $25,000, as it gave me the chance
            to try to save a multi-million dollar project from ruin. (Meeting with a
            guy who was - at the time, though I didn't know it - hiding from a Federal
            indictment as I met with him was another story, one right out of the
            Godfather, but it's hardly germane to this story).


            >Not sure these arguments will convince a client to go to a retainer,
            >but it's my experience that clients generally make out better with a
            >retainer. They can budget for it, you can budget your time better, and
            >there are no surprises.

            I find that clients make out better (and so do agencies) when the client
            pays for exactly what s/he gets, no more and no less. But your size may vary.

            Ned


            >Hope this helps.
            >
            >Dennis
            >
            >On Dec 3, 2004, at 9:20 AM, detour3 wrote:
            >
            >
            > I have a new prospective client that wants to buy hourly rates
            > instead of a retainer. What reasons would you give a client why a
            > retainer is better for them and why hourly services are not a good
            > option for them?
            >
            >
            >
            >
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          • Ned Barnett
            ... David, I guess that depends on how you define a retainer. Mine are defined as up to X hours of professional services in exchange for Y dollars per
            Message 5 of 21 , Dec 6, 2004
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              At 09:47 PM 12/4/2004, you wrote:
              >This is somewhat of a self-righteous argument. The reality is that the
              >retainer is loaded in favour of the consultant/agency because it gives
              >them the comfort of a positive cash flow even if they do not undertake any
              >client work during the month. The retainer is also a bad deal for clients
              >because it removes the need for the consultant/agency to be creative and
              >proactive on their behalf.
              >
              >David Davis
              >www.askdd.com


              David, I guess that depends on how you define a retainer.

              Mine are "defined" as "up to X hours of professional services in exchange
              for Y dollars per month" - if they go more than 10% under, I roll over the
              hours; if they go more than 10% over, they pay for the extra service.

              I get the advantage of up-front monthly money I can count on, yet my client
              loses nothing. It's up to me to make sure the work is at least within 10%
              of the promised amount - and if they need more (often they do, and they
              drive the demand), they're glad to pay more. But they can wait till next
              month if they want.

              Ned


              >callawebdesign@... wrote:
              >
              >
              >I totally agree. I have all my clients on retainer and none of them have a
              >problem with it. It helps you and the client budget each month, and very
              >true...they don't have to worry about everything being a charge. Plus,
              >they can never
              >second guess you on the bill if you charge for 50 hours and they believe you
              >should only be charging for around 20-30. No surprises... very true. The only
              >thing additional I charge for is supplies. They pay for printing, postage,
              >etc. And even that is quoted to them before the project ever gets started.
              >Anyone
              >serious about hiring you, shouldn't have a problem understanding the benefits
              >to them as well as you.
              >
              >~
              >
              >
              >Laura Alber
              >12505 W. Jefferson Blvd.
              >Unit 301
              >Los Angeles, CA. 90066
              >phone/voice 310-822-1627
              >press@...
              >callawebdesign@...
              >Laura@...
              >
              ><http://www.ez-entertainment.net>http://www.ez-entertainment.net
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              >David Davis
              >Founder
              >
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            • Shediac Communications Ltd
              Dear All, As many on this list know, I recently went into retirement, but keep up with industry opinion. It has been our experience, in Hong Kong and China,
              Message 6 of 21 , Dec 7, 2004
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                Dear All,

                As many on this list know, I recently went into retirement, but
                keep up with industry opinion.

                It has been our experience, in Hong Kong and China, that hourly
                rates do not work unless you submit a time sheet and invoice
                weekly. This is to avoid someone in the principle's office
                stating that he/she could have found a less expensive supplier
                after the task has reached fruition and a lump sum invoice
                presented.

                Additionally, hourly principles (we refer to clients as
                principles) tend to wait until the very last minute before
                assigning a task, which often leads to a PR consultancy
                producing less than its best (the "garbage-in, garbage-out"
                syndrome). Hourly principals also upset internal scheduling for
                retainer principles.

                We have found that most Asian organizations welcome a monthly
                retainer, in that it ensures the PR effort is ongoing. It
                embeds the PR consultancy to the principle in a side-by-side
                relationship, so that both are prepared and in sync when it
                comes to certain critical PR tasks, such as crises
                communication.

                My consultancy offers principles 36 hours a month of our time,
                and we bill extra for hours exceeding 36. Obviously, we do not
                sit by a clock for all tasks. For example, most of our
                principles have very few tasks in the months of December and
                February (Lunar New Year holiday), so in November and January we
                do not levy overtime as we appreciate principles will not have
                much for us to do in Dec/Feb.

                Please remember the above is written from the Asian perspective.

                Frank Mark Shediac
                (Hong Kong Goodwill Ambassador 1999-2004)
                Managing Director
                Shediac Communications Limited<>Founded in Hong Kong, June 1976
                Cell Phone: (852) 6056 6271
                mailto:fshediac@...


                ======REPLY SEPARATOR=======

                On Sun, 5 Dec 2004 05:47:43 +0000 (GMT), albiondd@...,
                wrote:

                This is somewhat of a self-righteous argument. The reality is
                that the retainer is loaded in favour of the consultant/agency
                because it gives them the comfort of a positive cash flow even
                if they do not undertake any client work during the month. The
                retainer is also a bad deal for clients because it removes the
                need for the consultant/agency to be creative and proactive on
                their behalf.

                David Davis
                www.askdd.com

                callawebdesign@... wrote:


                I totally agree. I have all my clients on retainer and none of
                them have a
                problem with it. It helps you and the client budget each month,
                and very
                true...they don't have to worry about everything being a charge.
                Plus, they can never
                second guess you on the bill if you charge for 50 hours and they
                believe you
                should only be charging for around 20-30. No surprises... very
                true. The only
                thing additional I charge for is supplies. They pay for
                printing, postage,
                etc. And even that is quoted to them before the project ever
                gets started. Anyone
                serious about hiring you, shouldn't have a problem understanding
                the benefits
                to them as well as you.

                ~


                Laura Alber
                12505 W. Jefferson Blvd.
                Unit 301
                Los Angeles, CA. 90066
                phone/voice 310-822-1627
                press@...
                callawebdesign@...
                Laura@...

                http://www.ez-entertainment.net


                [Non-text portions of this message have been removed]








                Yahoo! Groups Links










                David Davis
                Founder

                Why not visit the new-look Mediabuddies - media industry's
                worldwide reunion club?


                http://www.mediabuddies.com/

























                [Non-text portions of this message have been removed]



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              • Shediac Communications Ltd
                MY APOLOGIES--THERE WERE MISSPELLINGS IN MY FIRST MAIL Dear All As many on this list know, I recently went into retirement, but keep up with industry opinion.
                Message 7 of 21 , Dec 7, 2004
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                  MY APOLOGIES--THERE WERE MISSPELLINGS IN MY FIRST MAIL

                  Dear All

                  As many on this list know, I recently went into retirement, but
                  keep up with industry opinion.

                  It has been our experience, in Hong Kong and China, that hourly
                  rates do not work unless you submit a time sheet and invoice
                  weekly. This is to avoid someone in the principal's office
                  stating that he/she could have found a less expensive supplier
                  after the task has reached fruition and a lump sum invoice
                  presented.

                  Additionally, hourly principals (we refer to clients as
                  principals) tend to wait until the very last minute before
                  assigning a task, which often leads to a PR consultancy
                  producing less than its best (the "garbage-in, garbage-out"
                  syndrome). Hourly principals also upset internal scheduling for
                  retainer principles.

                  We have found that most Asian organizations welcome a monthly
                  retainer, in that it ensures the PR effort is ongoing. It
                  embeds the PR consultancy to the principle in a side-by-side
                  relationship, so that both are prepared and in sync when it
                  comes to certain critical PR tasks, such as crises
                  communication.

                  My consultancy offers principles 36 hours a month of our time,
                  and we bill extra for hours exceeding 36. Obviously, we do not
                  sit by a clock for all tasks. For example, most of our
                  principles have very few tasks in the months of December and
                  February (Lunar New Year holiday), so in November and January we
                  do not levy overtime as we appreciate principles will not have
                  much for us to do in Dec/Feb.

                  Please remember the above is written from the Asian perspective.

                  Frank Mark Shediac
                  (Hong Kong Goodwill Ambassador 1999-2004)
                  Managing Director
                  Shediac Communications Limited<>Founded in Hong Kong, June 1976
                  Cell Phone: (852) 6056 6271
                  mailto:fshediac@...
                • Duncan Matheson
                  Kezia wrote ... Whoa, hold on dar just one dang blam minute. I guess I m like one of those livestock-stealing monsters you describe, but you ve got it wrong,
                  Message 8 of 21 , Dec 7, 2004
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                    Kezia wrote
                    > If there's anyone on this listserv who meets that description -
                    > charging a client for work that is not performed - we should chase
                    > them like illiterate villagers going after a livestock-stealing
                    > monster and stone them to death. Unsophisticated clients may think
                    > that's true, but they're very, very wrong.

                    Whoa, hold on dar just one dang blam minute. I guess I'm like one of those
                    livestock-stealing monsters you describe, but you've got it wrong, in that
                    there is nothing unethical about this practise, which if I am reading you
                    right, is what you are trying to suggest. When a client hires us on
                    retainer, he's buying our availability. Whether he decides to use it is up
                    to him, but he pays either way, and fully understands this going in. Keep in
                    mind this is time we would otherwise have booked to do other billable work,
                    so why shouldn't we.

                    This doesn't happen often, but it happens. I'll give you one example from a
                    couple of months ago. An organization was concerned that an expected
                    government decision may go against their interests, and if it did, they
                    wanted to be able to counter this and try to get it reversed. There was only
                    a minimal amount of work that could be done in advance, but if it occurred
                    they were going to need a considerable amount of our time. They knew they if
                    they waited until they knew for sure that they needed us, we might not be
                    available, so they booked us. Knowing we would be available if needed was
                    important to them, and to their mind, a worthwhile expense. As it turned
                    out, we weren't needed, and they gladly paid the bill. So for this, you
                    would have us chased out of the village?
                    >
                    > If a company wants to kick the tires before committing to a retainer
                    > agreement, find out what they're going to expect beforehand - you
                    > may not want their business.

                    Maybe not, but I have to disagree with you on this too. The majority of
                    retainer clients we have ever had didn't start out as retainer clients. They
                    first hired us for projects, then switched over to retainer. This is because
                    they became comfortable with us. I think for many clients, expecting them to
                    make a commitment to a retainer arrangement when they don't know you or your
                    work very well may be asking too much.

                    Duncan
                  • kezia_jauron
                    Duncan - thanks for the examples you mention. I got the impression from David s post that a retainer should allow us to live a cushy lifestyle on a client s
                    Message 9 of 21 , Dec 7, 2004
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                      Duncan - thanks for the examples you mention. I got the impression from
                      David's post that a retainer should allow us to live a cushy lifestyle on a
                      client's dime without doing any work. Sorry if that was not the implication.
                      Everyone undertakes research projects and writes drafts of news releases - or
                      otherwise lays a firm groundwork - for projects that never come to fruition.
                      Yeah. What a waste. What can ya do?

                      For us - we're a big player, but in a niche industry - new clients are well aware
                      of our capabilities and/or reputation coming in. Many client marketing people
                      have already worked with us at an earlier job, or have been referred to us by
                      analysts, editors, or VC firms. They don't have the excuse of not knowing
                      enough about us to make a committment. (Don't your prospects check
                      references? Shouldn't they KNOW walking in what a superstar you are??)

                      If you've had client relationships that began from a place of doubt but turned
                      out to be successful, you've been fortunate enough to work for great clients. In
                      my life so far, these situations have meant real whiners who want something
                      for nothing and are never satisfied. Just beware of non-hatching chicks.

                      Kezia
                      Who can't seem to shake the barnyard metaphors
                    • Jimmy Vo
                      I know this is an old thread, started back in December 2004, but I m confused. When I use monthly retainers, I bill my hourly rate against the retainer. What I
                      Message 10 of 21 , Jul 28, 2005
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                        I know this is an old thread, started back in December 2004, but I'm
                        confused.

                        When I use monthly retainers, I bill my hourly rate against the
                        retainer. What I don't use of the retainer gets carried over. I never
                        bill and keep fees for unperformed work, but if addtional work that
                        surpass the retainer is needed, the client has the option of paying
                        more the additional fees, or wait until next month.

                        QUESTIONS:
                        1) You mean some of you keep the retainer regardless, even for work
                        that's not performed? IS THIS NORMAL FOR THE INDUSTRY?

                        2) If you DO keep the extra money from the retainer -- How do you
                        manage to not do enough work? There's always work. Research research
                        research, coming up with new ideas, refining, give value to the
                        client and go beyond what's expected, draft edit draft more editing,
                        etc.

                        I also provide my clients with monthly statements detailing services
                        that were performed. You mean this isn't normal procedure?

                        -Jimmy Vo-





                        Kezia wrote
                        > If there's anyone on this listserv who meets that description -
                        > charging a client for work that is not performed - we should chase
                        > them like illiterate villagers going after a livestock-stealing
                        > monster and stone them to death. Unsophisticated clients may think
                        > that's true, but they're very, very wrong.

                        Whoa, hold on dar just one dang blam minute. I guess I'm like one of
                        those
                        livestock-stealing monsters you describe, but you've got it wrong, in
                        that
                        there is nothing unethical about this practise, which if I am reading
                        you
                        right, is what you are trying to suggest. When a client hires us on
                        retainer, he's buying our availability. Whether he decides to use it
                        is up
                        to him, but he pays either way, and fully understands this going in.
                        Keep in
                        mind this is time we would otherwise have booked to do other billable
                        work,
                        so why shouldn't we.

                        This doesn't happen often, but it happens. I'll give you one example
                        from a
                        couple of months ago. An organization was concerned that an expected
                        government decision may go against their interests, and if it did,
                        they
                        wanted to be able to counter this and try to get it reversed. There
                        was only
                        a minimal amount of work that could be done in advance, but if it
                        occurred
                        they were going to need a considerable amount of our time. They knew
                        they if
                        they waited until they knew for sure that they needed us, we might
                        not be
                        available, so they booked us. Knowing we would be available if needed
                        was
                        important to them, and to their mind, a worthwhile expense. As it
                        turned
                        out, we weren't needed, and they gladly paid the bill. So for this,
                        you
                        would have us chased out of the village?
                        >
                        > If a company wants to kick the tires before committing to a retainer
                        > agreement, find out what they're going to expect beforehand - you
                        > may not want their business.

                        Maybe not, but I have to disagree with you on this too. The majority
                        of
                        retainer clients we have ever had didn't start out as retainer
                        clients. They
                        first hired us for projects, then switched over to retainer. This is
                        because
                        they became comfortable with us. I think for many clients, expecting
                        them to
                        make a commitment to a retainer arrangement when they don't know you
                        or your
                        work very well may be asking too much.

                        Duncan
                      • Geri Wilson
                        hi jimmy - i don t know what s normal in the industry, but i can tell you what i do. as a boutique marketing communications firm, which means i m a
                        Message 11 of 21 , Jul 29, 2005
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                          hi jimmy -
                          i don't know what's "normal" in the industry, but i can tell you what i do. as a "boutique marketing communications firm," which means i'm a one-person shop (sometimes hiring extra help as needed), i provide personal service that the bigger shops don't provide.

                          in all honesty, my clients would die if they ever saw an hourly bill of what i do for them, and, to be honest, i hate keeping track of my time like that. so they pay me an hourly rate and i become their "in-house" marketing communication professional. every year we write a marketing communications plan, which is modified as we go as the market and their needs require, and i am basically available to fulfill their needs.

                          i'm sure i'd make more money hourly, but this way they feel secure with me, there are never surprises for me or them about the bill, and they don't resent their bill when it goes high, even though they require it. it also keeps the paperwork down, which is, after all, one of the reasons i went into this form of the business -- i hate the business end.

                          just one old pro's way. . .
                          best -
                          geri wilson
                          the jonathan group
                          - strategic marketing communications -

                          Jimmy Vo <jimmy@...> wrote:
                          I know this is an old thread, started back in December 2004, but I'm
                          confused.

                          When I use monthly retainers, I bill my hourly rate against the
                          retainer. What I don't use of the retainer gets carried over. I never
                          bill and keep fees for unperformed work, but if addtional work that
                          surpass the retainer is needed, the client has the option of paying
                          more the additional fees, or wait until next month.

                          QUESTIONS:
                          1) You mean some of you keep the retainer regardless, even for work
                          that's not performed? IS THIS NORMAL FOR THE INDUSTRY?

                          2) If you DO keep the extra money from the retainer -- How do you
                          manage to not do enough work? There's always work. Research research
                          research, coming up with new ideas, refining, give value to the
                          client and go beyond what's expected, draft edit draft more editing,
                          etc.

                          I also provide my clients with monthly statements detailing services
                          that were performed. You mean this isn't normal procedure?

                          -Jimmy Vo-





                          Kezia wrote
                          > If there's anyone on this listserv who meets that description -
                          > charging a client for work that is not performed - we should chase
                          > them like illiterate villagers going after a livestock-stealing
                          > monster and stone them to death. Unsophisticated clients may think
                          > that's true, but they're very, very wrong.

                          Whoa, hold on dar just one dang blam minute. I guess I'm like one of
                          those
                          livestock-stealing monsters you describe, but you've got it wrong, in
                          that
                          there is nothing unethical about this practise, which if I am reading
                          you
                          right, is what you are trying to suggest. When a client hires us on
                          retainer, he's buying our availability. Whether he decides to use it
                          is up
                          to him, but he pays either way, and fully understands this going in.
                          Keep in
                          mind this is time we would otherwise have booked to do other billable
                          work,
                          so why shouldn't we.

                          This doesn't happen often, but it happens. I'll give you one example
                          from a
                          couple of months ago. An organization was concerned that an expected
                          government decision may go against their interests, and if it did,
                          they
                          wanted to be able to counter this and try to get it reversed. There
                          was only
                          a minimal amount of work that could be done in advance, but if it
                          occurred
                          they were going to need a considerable amount of our time. They knew
                          they if
                          they waited until they knew for sure that they needed us, we might
                          not be
                          available, so they booked us. Knowing we would be available if needed
                          was
                          important to them, and to their mind, a worthwhile expense. As it
                          turned
                          out, we weren't needed, and they gladly paid the bill. So for this,
                          you
                          would have us chased out of the village?
                          >
                          > If a company wants to kick the tires before committing to a retainer
                          > agreement, find out what they're going to expect beforehand - you
                          > may not want their business.

                          Maybe not, but I have to disagree with you on this too. The majority
                          of
                          retainer clients we have ever had didn't start out as retainer
                          clients. They
                          first hired us for projects, then switched over to retainer. This is
                          because
                          they became comfortable with us. I think for many clients, expecting
                          them to
                          make a commitment to a retainer arrangement when they don't know you
                          or your
                          work very well may be asking too much.

                          Duncan





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                          Geri Wilson
                          The Jonathan Group
                          - strategic marketing communications -
                          626.403.6741
                          gerij9@...








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                          [Non-text portions of this message have been removed]
                        • Bob Reed
                          Jimmy, From my perspective, you re use of retainers is correct. It s the average of what the client will pay over the course of a yearly program, with peaks
                          Message 12 of 21 , Jul 29, 2005
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                            Jimmy,

                            From my perspective, you're use of retainers is correct. It's the average
                            of what the client will pay over the course of a yearly program, with peaks
                            and valleys in activity.

                            On the other hand, some agencies view the retainer as a placeholder, which
                            give the client the right to instant availability and use of the agency's
                            time and talent.

                            What's normal is what the client will accept and tolerate in relation to
                            perceived value.

                            Bob Reed

                            -----Original Message-----
                            From: prbytes@yahoogroups.com [mailto:prbytes@yahoogroups.com] On Behalf Of
                            Jimmy Vo
                            Sent: Thursday, July 28, 2005 4:32 PM
                            To: prbytes@yahoogroups.com
                            Subject: [prbytes] Re: Hourly Vs. Retainer? Isn't it the same?

                            I know this is an old thread, started back in December 2004, but I'm
                            confused.

                            When I use monthly retainers, I bill my hourly rate against the
                            retainer. What I don't use of the retainer gets carried over. I never
                            bill and keep fees for unperformed work, but if addtional work that
                            surpass the retainer is needed, the client has the option of paying
                            more the additional fees, or wait until next month.

                            QUESTIONS:
                            1) You mean some of you keep the retainer regardless, even for work
                            that's not performed? IS THIS NORMAL FOR THE INDUSTRY?

                            2) If you DO keep the extra money from the retainer -- How do you
                            manage to not do enough work? There's always work. Research research
                            research, coming up with new ideas, refining, give value to the
                            client and go beyond what's expected, draft edit draft more editing,
                            etc.

                            I also provide my clients with monthly statements detailing services
                            that were performed. You mean this isn't normal procedure?

                            -Jimmy Vo-





                            Kezia wrote
                            > If there's anyone on this listserv who meets that description -
                            > charging a client for work that is not performed - we should chase
                            > them like illiterate villagers going after a livestock-stealing
                            > monster and stone them to death. Unsophisticated clients may think
                            > that's true, but they're very, very wrong.

                            Whoa, hold on dar just one dang blam minute. I guess I'm like one of
                            those
                            livestock-stealing monsters you describe, but you've got it wrong, in
                            that
                            there is nothing unethical about this practise, which if I am reading
                            you
                            right, is what you are trying to suggest. When a client hires us on
                            retainer, he's buying our availability. Whether he decides to use it
                            is up
                            to him, but he pays either way, and fully understands this going in.
                            Keep in
                            mind this is time we would otherwise have booked to do other billable
                            work,
                            so why shouldn't we.

                            This doesn't happen often, but it happens. I'll give you one example
                            from a
                            couple of months ago. An organization was concerned that an expected
                            government decision may go against their interests, and if it did,
                            they
                            wanted to be able to counter this and try to get it reversed. There
                            was only
                            a minimal amount of work that could be done in advance, but if it
                            occurred
                            they were going to need a considerable amount of our time. They knew
                            they if
                            they waited until they knew for sure that they needed us, we might
                            not be
                            available, so they booked us. Knowing we would be available if needed
                            was
                            important to them, and to their mind, a worthwhile expense. As it
                            turned
                            out, we weren't needed, and they gladly paid the bill. So for this,
                            you
                            would have us chased out of the village?
                            >
                            > If a company wants to kick the tires before committing to a retainer
                            > agreement, find out what they're going to expect beforehand - you
                            > may not want their business.

                            Maybe not, but I have to disagree with you on this too. The majority
                            of
                            retainer clients we have ever had didn't start out as retainer
                            clients. They
                            first hired us for projects, then switched over to retainer. This is
                            because
                            they became comfortable with us. I think for many clients, expecting
                            them to
                            make a commitment to a retainer arrangement when they don't know you
                            or your
                            work very well may be asking too much.

                            Duncan







                            Yahoo! Groups Links
                          • kezia_jauron
                            The point I was making was in response to David s statement here: The reality is that the retainer is loaded in favour of the consultant/agency because it
                            Message 13 of 21 , Aug 1, 2005
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                              The point I was making was in response to David's statement here:

                              "The reality is that the retainer is loaded in favour of the
                              consultant/agency because it gives them the comfort of a positive
                              cash flow even if they do not undertake any client work during the
                              month. The retainer is also a bad deal for clients because it
                              removes the need for the consultant/agency to be creative and
                              proactive on their behalf."

                              Which I disagreed with, but apparently only the "chase them like
                              illiterate villagers" portion of my comments had any legs. I can't
                              imagine there would be practitioners in our business who would do NO
                              work for a MONTH for a retainer client. Those are the bad guys,
                              folks - not anyone in present company.

                              I admire anyone who has the time and stamina to maintain hourly
                              against retainer billing records. My agency does not do this for
                              retainer clients. (My boss would probably be a lot richer if we
                              did.)

                              Again, I can only speak personally, but in a month where a client
                              may think "no work is being performed," I agree with you, Jimmy. How
                              is this possible?

                              For example, our retainer agreement allows for the writing and
                              distribution of two news releases a month. Some companies just don't
                              have two newsworthy developments in a month, so they might think
                              they'll get a break on the bill. Wrong. It takes much more effort
                              and time to get press for a company that isn't doing anything
                              noteworthy, doesn't it?

                              And aren't you also:

                              - Updating your editorial database
                              - Maintaining the relationships you trade on
                              - Monitoring editorial coverage, competitive coverage, and industry
                              happenings
                              - Checking editorial calendars for future opps and creating new ones
                              - Laying groundwork for future projects (i.e. racking your brain for
                              ways to keep an inactive or sporadically active client in the news)

                              As Duncan mentioned at one point, your client's failure to take
                              advantage of all the PR services/resources available to them isn't
                              your fault, and you shouldn't be financially penalized for it. But
                              it sounds like you know how to make the distinction between hours
                              YOU didn't devote to their account and opportunities THEY failed to
                              leverage, and I'll bet your clients value your fairness and accuracy
                              when they're writing your checks. Normal or not, whatever you're
                              doing, keep doing it.

                              For the reasons I disagreed that a retainer agreement is always more
                              financially advantageous to the agency than the client, read the
                              rest of the original message here:
                              http://finance.groups.yahoo.com/group/prbytes/message/2895

                              In fact, I'm going through an 'abuse period' now with a retainer
                              client that moved around some staff, and I have a new day-to-day
                              contact who needs incredibly intense handholding as well as
                              massively detailed reports. They're getting their money's worth and
                              then some.




                              --- In prbytes@yahoogroups.com, "Jimmy Vo" <jimmy@n...> wrote:
                              > I know this is an old thread, started back in December 2004, but
                              I'm
                              > confused.
                              >
                              > When I use monthly retainers, I bill my hourly rate against the
                              > retainer. What I don't use of the retainer gets carried over. I
                              never
                              > bill and keep fees for unperformed work, but if addtional work
                              that
                              > surpass the retainer is needed, the client has the option of
                              paying
                              > more the additional fees, or wait until next month.
                              >
                              > QUESTIONS:
                              > 1) You mean some of you keep the retainer regardless, even for
                              work
                              > that's not performed? IS THIS NORMAL FOR THE INDUSTRY?
                              >
                              > 2) If you DO keep the extra money from the retainer -- How do you
                              > manage to not do enough work? There's always work. Research
                              research
                              > research, coming up with new ideas, refining, give value to the
                              > client and go beyond what's expected, draft edit draft more
                              editing,
                              > etc.
                              >
                              > I also provide my clients with monthly statements detailing
                              services
                              > that were performed. You mean this isn't normal procedure?
                            • kezia_jauron
                              Say you ve set up an opportunity for a client - got them included in a newspaper review of the city s best dog groomers or something. Because you re so
                              Message 14 of 21 , Aug 1, 2005
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                                Say you've set up an opportunity for a client - got them included in
                                a newspaper review of 'the city's best dog groomers' or something.

                                Because you're so chummy with the editor and so familiar with the
                                dog grooming biz - in other words, because you are so good at what
                                you do - it only took a 4-minute phone call to set up that
                                opportunity.

                                How would you bill this? And doesn't this kind of thing happen to
                                you all the time?

                                If you weren't as good at this stuff, and didn't have the contacts
                                you have, that task may have taken you hours. And I assume you don't
                                bill them for the months or years it took to cultivate the
                                relationships and build the knowledge of the industry that led you
                                to be able to pull it off in 4 minutes.

                                (When clients ask for "their" "mail list," I'm always tempted to
                                tell them they can have it at our cost: $260,000. This is a rough
                                estimate of what we've spent building it over the last 13 years
                                based on a low-level, full-time staff person's annual salary, times
                                13 years.)
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