In this week’s issue, I’m going to show you a surefire strategy for selling retainer agreements.
This approach works so well I’ve only ever shared it with my coaching clients until now.
And trust me when I say this: retainers can make a huge difference in your business. Since I moved all of my clients to retainers, my freelance revenue has almost tripled! In fact, every dollar of my $32,000 per month in freelance earnings in 2022 was from a retainer.
And that’s not just my experience:
What kind of a difference would a 46% increase in earnings make in your life?
Unfortunately, most freelancers will never achieve this, because even the most experienced struggle to actually sell retainers to their clients:
And they struggle for all sorts of reasons:
- They try to sell a retainer before getting to know the client
- They view retainers as “selling blocks of my time”
- They don’t offer a compelling reason why the client should want a retainer
Let’s discuss a better approach.
Make them an offer too good to pass up.
Think about retainers from the client’s perspective for a second. As Jarrod Drysdale notes:
When most clients hear the word retainer, they picture freelancers counting their money while doing dramatically less work than they actually promised.
To overcome this concern, you have to demonstrate to the client that a retainer is in their best interest.
Step 1: Identify an Ongoing Need
Before you try to sell a retainer, it’s important to pinpoint exactly which problem the retainer will help the client solve.
If the client as an ongoing need, a retainer actually makes their life easier!
This is way easier to do if you’re already working with the client, but it’s possible even with a brand new client.
I didn’t do a single “one off” project in 2022. But of my 5 clients, only one started with a retainer; the rest started as single projects and grew from there.
Start by identifying the typical ongoing needs for your clients; for example:
- Most ecommerce clients are always working to increase revenue (through better conversion rates, faster site speeds, ads, email marketing, SEO, etc)
- Most B2B companies are constantly looking to improve their sales process (with better prospecting, improved case studies, etc)
Then, for the client you want to pitch, think about how you can align what you do with one of those ongoing needs. Some examples:
- Web Developers: dev work focused on conversion optimization or site speed improvements
- Designers: ongoing UX tests to improve user retention
- B2B Writers: a new case study each week for the sales and marketing team
Finally, get data to quantify the client’s current performance. How you do this will vary a bit based on your niche, but you could:
- Ask for access to their analytics and check their conversion rates.
- Run a page speed test or audit their site using an SEO tool.
- Conduct a quick usability audit.
Step 2: Quantify the Upside
I’ve written about this at length, but one of the keys to selling any high-ticket freelance work is to quantify the financial upside of the work.
When the project is finished, how much more could they be making?
- If their current conversion rate is 1% and the industry average is 2%, they could literally double their revenue
Or how much will they have saved?
- If you can decrease the amount of time they need to spend to update their website, how many hours does that free up for them? How much are those hours worth?
Do some back-of-the-napkin math here and come up with an estimate.
Note: this isn’t a guarantee that you’ll hit that number. You’re just connecting the dots for them by highlighting what’s in it for them.
Step 3: Make it easy to say yes.
Armed with the info you gathered in steps 1 and 2, the final step is to pitch your retainer in a way that makes saying ‘yes’ a no-brainer.
Focus on Value
As Invoice Ninja suggests, start by focusing the conversation on value rather than hours.
Here’s a word-for-word email one of my coaching clients sent to a client:
I was reviewing your analytics this afternoon and I noticed that your average conversion rate has dropped this quarter from (1.4% in Q3 and 1.2% in Q4) to 0.8% year-to-date.
The average conversion rate for ecommerce sporting goods brands is 2.35%, and brands in the top 10th percentile have conversion rates above 10%.
Just hitting the average would represent $247,000 in incremental revenue for [client name]!
I’ve got some ideas about how to improve conversions. Are you interested in discussing?
This email led to a conversation that resulted in a $7,500/month retainer!
Avoid the Word ‘Retainer’
Once you’ve given the client an overview of the value they could get, it’s time to make the ask.
But rather than use the word ‘retainer’, talk about “ongoing work.”
Make It Easy to Cancel
Finally, give your client confidence by making it easy to cancel if they need to. There’s been a ton of research demonstrating that long return policies increase sales and the same applies to providing short cancellation periods for ongoing service contracts like retainers.
I typically start with a 30-day notice period for both parties, that way the client feels confident they can make a change if things don’t work out.
In my experience, this almost never happens, but giving them that confidence provides a huge boost in the sales process.
Occasionally, clients may ask why they can’t just pay you for the same work on an hourly basis.
My recommendation here is to note that you don’t work hourly because:
- Billing hourly doesn’t align the client’s incentives with yours (they’re incentivized to decrease hours, you’re incentivized to increase them), and…
- You can’t reserve time on your schedule for them unless they agree to pay up front for it
Wrapping Up: Cover Your Assets
If you’ve already worked with the client before and they’ve paid on time, the risk of them failing to pay is probably low, but it’s always worthwhile to cover yourself.
Just like Morgan, I recommend asking for payment up front or mid-month:
I also agree with Kat’s advice to include a clause that makes it clear that the client is responsible for paying even if they don’t fully utilize you during the period:
By setting clear expectations with the client, you’ll ensure that there are no misconceptions about how you’ll be working together and set yourself up for a successful ongoing relationship.
How about you? Questions, thoughts, or ideas on selling retainers?
Leave a comment below!