Is a retainer agreement part of your pricing strategy?

Back in episode 11 of Resourceful Designer I talked about pricing strategies for your graphic design business. In it I talked about how value based pricing is the Holy Grail of all the pricing methods. In that episode I didn't cover the retainer agreement because I don't really view it as a pricing strategy. It's more of a payment method. But if I was to include it in all the ways you can be paid I think it comes in a close second.

What is a retainer agreement?

Simply put, a retainer agreement is a way to be paid in advance for work you'll do in the future. It's an agreement between you and your client stating that for a fixed amount of money paid up front on a regular basis, you agree to provide a predetermined amount of work for that client.

Why should you use a retainer agreement?

There are several reasons why a retainer agreement will benefit your home based graphic design business. First and foremost it creates a steady stream of income. Anyone running a graphic design business knows that it's not a profession of absolutes. There are no steady paycheques to be collected every other week. Instead we live off the whim of our clients and their schedule for paying their bills. Having a client on retainer creates a small piece of dependability where you know for a fact that money is coming in. It's like receiving a paycheque on a regular basis.

Another benefit of using a retainer agreement is it allows you to plan your work in advance. Knowing that you have to work on a certain job every week, or that you have to devote a certain amount of time to a client each week allows you to set a schedule and be more productive with the remainder of your time.

Don't forget, when you have a client sign a retainer agreement with you, it's a guarantee that they will come to you for their work and not look elsewhere for a graphic designer.

What are the Pros and Cons of a retainer agreement?

Pros

Steady Pay: As long as your client pays according to the agreement, you know when and how much income you can expect.

Better Clients: Entering into a retainer agreement is a big commitment. It takes a client with whom you have a good relationship with to agree to it. Since the relationship is already there, entering into a retainer agreement with them solidifies their loyalty to you.

Retainer Agreements Benefit the Client: There are many benefits to the client to sign with you. The client solidifies their relationship with a graphic designer and wont have to shop around each time they have a project to do. And the client knows in advance how much they are spending, allowing them to create more focused budgets.

Cons

Scheduling Conflicts: Although it's nice to know how much work you will be doing for the client each week. It may be hard to schedule other clients around this, especially if they have tight deadlines for their projects as well.

Dependence Issues: Relying solely on clients with retainer agreements may seem great as far as your income goes, but it can be dangerous if you don't diversify your work with non retainer clients. If a client with a retainer agreement decides to end the contract and leave you, there goes a good chunk of your income.

Potentially Less Pay: One of the things clients like about retainer agreements is the chance to acquire your services at a discounted rate. This, along with the scheduling conflicts I just mentioned could mean putting aside higher paid work in order to complete the work for the client under contract. You could potentially loose out on better paying jobs because your time is tied up due to the retainer agreement.

What type of work do you do under a retainer agreement?

The best type of work for a retainer agreement is anything that is done on a regular basis. Reoccurring work is perfectly suited for this scenario. Work such as website maintenance, newsletters, advertising, consulting, strategic planning.

Don't forget emergency issues. Some clients may want to pay you a small amount on a monthly basis just in case they need you for something.

Type of retainer agreements.

There are may ways you can set up your retainer agreement. This is something you and your client will need to work out. But here are some of the more popular options.

• Paid to work a fixed amount of hours in a given time frame
• Paid to work a fixed number of jobs in a given time frame
• Paid a fixed amount of money you need to "work off". Usually within a given time frame.
• Paid to be on call or to give the client preferential treatment.

Discussing a retainer agreement with your client.

When approaching a client about a potential retainer agreement you should keep the following in mind:

• Remind the client how dependable you are.
• Remind the client how much money they are regularly spending on you.
• Discuss the benefits to BOTH of you if you enter a retainer agreement.
• Discuss possible bonuses to the client.

What to include in a retainer agreement.

• The amount of money you'll receive and the amount of work expected of you.
• The date you are to be paid and how often
• What type of work is expected of you.
• How much notice will you be given for the work.
• How much time will you have to complete the work.
• What happens if you go beyond the agreed upon terms (do not offer discounts for additional work)
• Who pays for expenses incurred while doing the work.
• Specify that there is no carryover of unused time money at the end of the specified period.
• What is required and how much time is required to end the retainer agreement.
• Include an end date or a renegotiation date so you have a scheduled point when you can raise your rates if need be.

I want to include a special note about working beyond the specified time/amount of you retainer agreement. You may be inclined to offer a discount to your client should you go over the time/amount specified. I strongly advise against this. Consistently exceeding the agreement shows that the specifications were not realistic and gives you the opportunity to renegotiate the agreement. If you offer a discount for time spent beyond what is in the agreement the client will be less inclined to negotiate a new agreement.

Don't get complacent

It's nice to have a steady income you can rely on and that's exactly what a retainer agreement can offer you. But don't get complacent while working on retainer. You need to continue to grow your business and look for more work because you never know when or why a client will decide to end the agreement and leave you with a smaller income stream.

What do you think?

What do you do when you take some time off from your graphic design business? Let me know by leaving a comment for this episode.

Questions of the Week

If you would like me to answer your question in a future episode please visit my feedback page.

This week’s question comes from Caitlin,

I've been lucky enough to gain my first handful of web design clients, which is extremely exciting. But as each contract comes to a close, I'm always flooded with a variety of other services I know I could offer the client, such as content marketing designs or eBook designs. How would you recommend turning web design clients into retainer clients? Even if the retainer is simply website maintenance. I'd love to hear your thoughts on the subject, how you've handled this issue in the past and what services you tend to offer your clients on a long standing basis after the website design is complete.

To find out what I told Caitlin you’ll have to listen to the podcast.

Resource of the week is WhatTheFont

Whatthefont.com is a website I've been using for many years to help me identify fonts used on designed pieces by simply uploading an image of the font. The site uses OCR to identify the characters, allowing you the option to fix the selected character if it chose wrong. Then the site uses it's vast library of fonts to try to identify or provide you with fonts that closely match the one you provided.

This site has saved me countless hours over the years I would have spent scrolling through my font library looking for that elusive font.

Subscribe to the podcast

Subscribe on iTunes
Subscribe on Stitcher
Subscribe on Android

Contact me

Send me feedback

Follow me on Twitter and Facebook

I want to help you.

Running a graphic design or web design business all by yourself isn't easy. If there are any struggles you face running your design business please reach out to me. I'll do my best to help you by addressing your issues in a future blog post or podcast episode here at Resourceful Designer. You can reach me at feedback@resourcefuldesigner.com

Nominate Resourceful Designer for The People's Choice Podcast Awards!

Become a partner to your clients, not just a graphic designer.

Over the past 25 years I've seen many graphic designers start their own business and fail. In most cases it wasn't because they weren't good a graphic designer. It was because that's all they were. They were JUST a graphic designer.

If you want to succeed at running your own graphic design business you need to think bigger than being just a graphic designer. You need to establish yourself as a go-to person for all creative, marketing, promotional and branding ideas. You need to establish yourself as a business partner, a sounding board, a problem solver to your clients and not just a supplier of design.

If you fail to establish this sort of relationship with your design clients you are dooming yourself to an on call status. Becoming someone your clients call only once they have an established idea and need someone to execute it.

How do become more than just a graphic designer?

The answer is quite simple. Talk to your clients about their projects. Don't become yes men (or women), who simply do what the client asks of them. That's the easiest way to become just a graphic designer and doom your business. Instead, try to bounce ideas off you clients. Suggest alternatives to what they're asking. Think outside the box. Learn more about their business so that you can suggest things they may not think about.

In episode 20 of Resourceful Designer I talked about the importance of building relationships with your design clients and how doing so can propel you into becoming a strategic partner for them. Someone they come to when they need advice or want a second opinion on. That is exactly what I'm talking about when I say don't be just a graphic designer to them. Become someone important to them. If you do establish that kind of relationship, you can count on good quality projects from them for years to come.

Tell your clients what you can offer them.

One of the biggest problems when dealing with clients is their lack of knowledge of what exactly it is that we do. I discuss this in length in episode 2 of Resourceful Designer. The gist of it is, unless you tell your clients what you can do for them they may look for those services elsewhere.

My own brother-in-law took the logo I designed for him and had business cards designed elsewhere because he "didn't know I also designed business cards".

Have conversations with your clients about their business. These conversations are the perfect opportunity to suggest things or offer services to help them that they don't know you offer.

Your ultimate goal is to become a strategic partner.

You will know when you've succeeded with a client when you become a partner of theirs. When I say partner I don't mean in a sense that you own part of their business. What I mean it you become someone they rely on for more than just design.

You become a strategic partner when your client counts on you for ideas and advice in running and marketing their business. You become a strategic partner when your client stops giving you direction on the designs you create, and gives you free range to create as you see fit. You become a strategic partner when your name is the fist thing off their lips when your client meets someone else with a business problem.

Once you reach that level in the relationship you will be way more than just a graphic designer and your business will have nowhere to go but up.

What do you think?

Do you agree that building these relationships is vital to the success of your own business? Let me know by leaving a comment for this episode.

Questions of the Week

If you would like me to answer your question in a future episode please visit my feedback page.

This week’s question comes from Teri,

I have some vacation time coming up and I was wondering, how do you handle things while you are out? Inevitably it seems like a client will always have an unexpected revision they ask me to do or need a file from me out of the blue. Do you have any experience in this at all and if so, how do you handle such situations?

To find out what I told Teri you’ll have to listen to the podcast.

Resource of the week is Photos For Life

Wordmark.it is a wonderful new site I just discovered. It's used to sample all the fonts you have installed on your computer and makes it extremely easy to choose the perfect font for the project you are working on. Simply visit the site, type in a word or phrase of your choosing and click "load fonts". In no time flat you will see your word/phrase displayed in every font you have installed. You can use various filters to adjust the size, case, and readability of the fonts. Simply click the fonts you are interested in and then view only the ones you selected.

I only just discovered this site but I've already used it for a couple of projects and I expect it to become a regular part of my design resources.

Subscribe to the podcast

Subscribe on iTunes
Subscribe on Stitcher
Subscribe on Android

Contact me

Send me feedback

Follow me on Twitter and Facebook

I want to help you.

Running a graphic design or web design business all by yourself isn't easy. If there are any struggles you face running your design business please reach out to me. I'll do my best to help you by addressing your issues in a future blog post or podcast episode here at Resourceful Designer. You can reach me at feedback@resourcefuldesigner.com

Whose fault is it when YOU mess up?

Sounds like a silly question doesn't it? If YOU are the one to mess up, then shouldn't it be your fault? That's what I thought. However, after reading through the heated discussion in a Facebook group about graphic design, I realize that some people aren't so sure about what constitutes a mess up. I was so perturbed about what I read that I decided to devote this podcast episode to this one topic.

Here's a bit of context: In a graphic design Facebook group I came across a question posted by a designer seeking advice. The gist of his story when something like this. He designed a flyer for a client who then took the artwork to a printer to have the flyer printed. Towards the end of the design stage the designer had sent a proof for the client to sign off on. Instead of signing off on the job, the client told the designer that everything looked good, however they decided to change one word in a heading and would sign off on the job once the designer supplied them with a new proof with the requested change. The designer made the change, sent a new proof to the client for verification and promptly received their signed approval. The designer then produced the final PDF files for the client to supply to the printer. End of job. Or so the designer thought.

A couple of weeks later the client contacted the designer saying there was a mess up on the flyer and they couldn't use what they had. They needed the error fixed and they wanted the designer to pay for the reprint.

Now I know what you're thinking. The client signed off on the proof so it's their problem, not the designer's. The designer even had a clause in his contract stating that he wasn't responsible for any errors in the artwork once the client signs off on the job. So why the issue?

Here's where things get interesting. It turns out the proof the client did not sign off on when they asked for the word change in the heading was 100% ok everywhere else. They had had it proofread and verified by several people. Somehow, when the designer changed the word in the heading, something else must have happened to mess up a completely different section of the flyer and nobody noticed. When he sent the client the final proof they did not verify the entire flyer again, they only verified the word change and then signed off on the job.

So after this long explanation (which was even longer in the Facebook group) The designer asked the group whether or not he was at fault.

Who is responsible for the mess up?

Maybe it's my old fashion ways, but I was surprised at how divided the discussion was. Half the people said it was the designer's responsibility because he had messed up something unrelated to the one change the client requested. The client had no reason to look over the rest of the flyer again after determining that it was OK. The other half said it was the client's responsibility because they signed off on the proof with the mess up on it. They should have verified everything again before signing off on it. The discussion got pretty heated. Much more so than I thought the topic merited but everyone involved wanted to hold their ground.

I decided not to get involved in the discussion, and I don't know what the designer ultimately decided. I do know that he mentioned arguing with his client over the matter, which is why he was asking for advice.

When you mess up, you should man up to it (or woman up to it).

My stand on the topic is that the designer is ultimately responsible. Not only for the mess up, but for his integrity and his reputation. Should the client have rechecked the entire flyer? Perhaps, and they probably will on the next project. But ultimately they had no reason to. What would have happened if instead of asking for a new proof, the client had instead signed the first proof and told the designer the project was approved with one simple word change. I know this has happened to me many times. "Mark, here's the signed approval, just add a period to the end of the second paragraph and everything is good." If the client had done something like that instead, the mess up would clearly be on the designer. But because he showed them that he had changed that one word, the question of responsibility is now up in the air.

It's not worth it.

I don't know how many flyers were printed with the mess up. I have no idea if it was a $200 job or a $20,000 job. Regardless I hope the designer makes the right decision and takes responsibility for it. Not just because I believe he's at fault. But because of the possible repercussions for his business.

The designer mentioned that was was arguing with his client over the matter which is never a good thing. It's ok to have disagreements with clients, or difference of opinions. But arguments should never enter into the equation. I can almost guarantee that even if the designer takes responsibility for the mess up, the damage has been done and the client will be looking for another designer for any future projects. And what of the designer's reputation? When word gets out in the business community of how he handled the situation it wont look favourably for him and could make it harder for him to find future work.

Do you disagree?

Who do you think was ultimately responsible for the mess up? Let me know by leaving a comment for this episode.

Questions of the Week

I have another Question Of The Week to answer. If you would like me to answer your question in a future episode please visit my feedback page.

This week’s question comes from Toby,

Hey there Mark I have a question for you that hopefully you may be able to shine some light on. I check up on my clients sites fairly often just to make sure everything is up and running and in working order, and just recently I noticed that a particular plugin that I have used for multiple clients pages is no longer functioning as the provider has changed their API, essentially breaking the plugin. I have said all that to get to my question which is how do I handle explaining to my client's (some of whom may not be understanding) that it is broken and is not my fault? I have not informed any of them yet as they are past clients I have not worked with in a few months, but seeing as when I handed the site over to them everything was working as it should and now it is not due to something out of my control, if they notice and then come to me for a fix would I be in the wrong to charge them to fix this? Thank you so much for the knowledge and help!

To find out what I told Toby you’ll have to listen to the podcast.

Resource of the week is Sync by iThemes

It's important to keep WordPress sites updated, both for the security and to take advantage of the latest features and improvements of themes and plugins.

Updates to WordPress core and any plugins or themes installed on sites can happen pretty frequently. And if you're managing multiple WordPress sites, keeping them all updated can take up a lot of your valuable time.

iThemes Sync is an easy way to manage updates for all your WordPress sites from one place. Instead of logging in to each site individually, you have one place to view and install available updates, making WordPress maintenance easy.

You can set up and manage up to 10 sites for free by visiting http://resourcefuldesigner.com/sync

Subscribe to the podcast

Subscribe on iTunes
Subscribe on Stitcher
Subscribe on Android

Contact me

Send me feedback

Follow me on Twitter and Facebook

I want to help you.

Running a graphic design or web design business all by yourself isn't easy. If there are any struggles you face running your design business please reach out to me. I'll do my best to help you by addressing your issues in a future blog post or podcast episode here at Resourceful Designer. You can reach me at feedback@resourcefuldesigner.com