Re: [prbytes] Re: Hourly Vs. Retainer? Isn't it the same?
- 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. . .
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
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.
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,
I also provide my clients with monthly statements detailing services
that were performed. You mean this isn't normal procedure?
> If there's anyone on this listserv who meets that description -Whoa, hold on dar just one dang blam minute. I guess I'm like one of
> 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.
livestock-stealing monsters you describe, but you've got it wrong, in
there is nothing unethical about this practise, which if I am reading
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
to him, but he pays either way, and fully understands this going in.
mind this is time we would otherwise have booked to do other billable
so why shouldn't we.
This doesn't happen often, but it happens. I'll give you one example
couple of months ago. An organization was concerned that an expected
government decision may go against their interests, and if it did,
wanted to be able to counter this and try to get it reversed. There
a minimal amount of work that could be done in advance, but if it
they were going to need a considerable amount of our time. They knew
they waited until they knew for sure that they needed us, we might
available, so they booked us. Knowing we would be available if needed
important to them, and to their mind, a worthwhile expense. As it
out, we weren't needed, and they gladly paid the bill. So for this,
would have us chased out of the village?
>Maybe not, but I have to disagree with you on this too. The majority
> 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.
retainer clients we have ever had didn't start out as retainer
first hired us for projects, then switched over to retainer. This is
they became comfortable with us. I think for many clients, expecting
make a commitment to a retainer arrangement when they don't know you
work very well may be asking too much.
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- strategic marketing communications -
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[Non-text portions of this message have been removed]
- 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
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
- 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:
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
--- In email@example.com, "Jimmy Vo" <jimmy@n...> wrote:
> I know this is an old thread, started back in December 2004, but
> 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
> bill and keep fees for unperformed work, but if addtional work
> surpass the retainer is needed, the client has the option of
> more the additional fees, or wait until next month.
> 1) You mean some of you keep the retainer regardless, even for
> 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, coming up with new ideas, refining, give value to the
> client and go beyond what's expected, draft edit draft more
> I also provide my clients with monthly statements detailing
> that were performed. You mean this isn't normal procedure?
- 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
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