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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
      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.
      >
      >
      >
      >
      >
    • 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 2 of 21 , Dec 6, 2004
        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 3 of 21 , Dec 6, 2004
          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 4 of 21 , Dec 6, 2004
            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
            >
            >Why not visit the new-look Mediabuddies - media industry's worldwide
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            >
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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 5 of 21 , Dec 7, 2004
              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 6 of 21 , Dec 7, 2004
                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 7 of 21 , Dec 7, 2004
                  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 8 of 21 , Dec 7, 2004
                    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 9 of 21 , Jul 28, 2005
                      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 10 of 21 , Jul 29, 2005
                        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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                      • 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 11 of 21 , Jul 29, 2005
                          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 12 of 21 , Aug 1, 2005
                            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 13 of 21 , Aug 1, 2005
                              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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