Make Money Online

Every single month they just give you money.

A lot of money, ideally.

No, no. And honestly, like, when it comes to retainers, I oftentimes see consultants at varying levels say, I want to add retainers to my business because it seems like, you know, like the holy grail, I’m going to make money every month. I’m going to launch a $15 a month hosting option. And I’m like, perhaps you should charge 10 times as much. And they’re like, no, I’m going for volume. And I’m like, I don’t agree with that structurally or philosophically. Like, when it comes to a retainer, I think there are two types of retainers you could offer. Maybe there’s more that we’ll discover on this episode, but You could have sort of like lower value, more hands-off retainers. And I see these as being three-figure, and when we say retainer, we should definitely circle back to better define retainer, but like A three-figure recurring monthly service engagement that’s pretty hands-off. And then you have higher tier four-figure and five-figure Monthly recurring, they pay you on a schedule, service engagements where you are doing more strategy or you are doing more implementation, you are handling more of the project. Really, I see retainer-based offerings falling into those two separate and distinct categories. How about yourself?

And oftentimes I see retainers, both in my business and other people’s businesses, they might start out very well defined, but it could quickly become sort of the Catch-all hodgepodge service offering. Like, I’ve got this thing defined, you’re paying me four to five figures a month, and I will do things as they come up, which is fine. Like, if you’re going into that intentionally with like an, let’s call it an agile Freelancing focus where you meet weekly with the client or monthly with the client, figure out your priorities, move forward with it. And like that could be a very good thing, but I think it’s better if you approach that intentionally, saying, I’m launching this agile service where it’s retainer-based, and each week or each month we figure out what to focus on. What I dislike is when you have a well-defined service offering. And over time, as your engagement with the client continues into month three, month six, month 12, well, the original scope has drifted a bit, but you’re both okay with that because we figured out better problems to solve. Now it’s become this weird like hodgepodge. It doesn’t quite fit in with your other service offerings. It’s not solving the same expensive problems, but it’s valuable to the client. You enjoy working with them. And you end up in this like retainer no man’s land where You’re providing value, you’re getting paid for it, but it’s not really one of your service offerings, and it doesn’t quite align with the direction you want to take your business in. I’ve ended up Starting podcast outreach engagements that ended with me writing drip campaign sequences for the client. And at the end of it, I was like, somewhere along the lines here, we took a left turn that I wasn’t expecting. I think that’s something that’s valuable to be on the lookout for when it comes to retainers. If you have a retainer offering, I think there’s a lot of value in clearly specifying the scope of what’s included. And if and when you drift outside of that, saying, okay, how do we bring this back to the baseline? And if they need something that’s custom and outside of the scope, let’s quote that as something new. So we both understand that it’s not, oh, what we started with, but we just bolted on a couple new things. But instead, it’s resetting from ground zero. These are the outcomes you’re looking for. These are the actions we’ll take to get you to those outcomes. This is how much it will cost. Here’s how we move forward.

No, I completely agree. And Thinking about what an optimal high-tech retainer looks like. This comes from a listener question where they had written in saying retainers had looked like a holy grail a year or so ago, but now they look like a trap where They can constrain your time. They can keep you from doing more interesting product work. And they feel a little client-side luxurious where You’re essentially handing over the keys to your brain and access to the client. So, one important thing to talk about, I think, would be what an optimal high-touch retainer looks like. And for me and my business, what I’ve discovered is the more narrowly I define what that retainer includes, the better it will be. So just to flash back to your example. Hey, one of your retainer offerings is: I will take ownership of your Google Analytics because nobody else is doing that, and somebody desperately needs to. Okay, great. So, you’ve cleanly and clearly defined what that includes. If they come along and say, Well, hey, we really need somebody to focus on. A, B, or C other analytics tool, you could say, hey, we could discuss that as a separate retainer, but what’s on the table, what’s in the can of soup, is just what’s listed on the tin. This is all you’re getting with this retainer. So I think An optimal high-touch retainer clearly defines what you’re going to be doing in terms of work and ideally positions you for strategic access. You, I think, want to Be promoting yourself as a strategic advisor to your clients. And so part of that is not making yourself available to do whatever they need, but Do make, but actually making yourself available to answer questions as they come up through a channel that you designate. This might be a shared Slack room, this might be email, this might be Basecamp, this might be something else that I haven’t heard of yet. But whatever it is, saying, hey, you know what? I’m available to help with strategic questions around this as they come up. And the best way to communicate with me is through this channel. And the turnaround time is this much time. And that’s how we move forward. So I think. The ideal high-touch retainer is a combination of: I’m going to do these very specific things for this amount of money, and you also gain access to me to ask questions in this shape and form with this type of turnaround. Time.

No, I completely agree with that. And I think I want to emphasize something you said there, where it’s one-sixth of your income. It’s not one-sixth of your client income. So, if you have a SaaS, you’re selling a product, you do coaching, you do trainings, you have other income streams, you might have a whale client, a singular client you work with, but They’re only a fraction of your total income. So it’s important to think of it as your total income pie rather than just consulting work. If you’re able to say, like, hey, I have six clients and each one’s equal, and buy yourself out of working with one of those clients by getting another income stream up. Awesome. You’ve still diversified your risk of working with these different income streams and different clients and different people who are paying you money. You just aren’t at risk of the whale client being your entire income. So I think there’s a good distinction that a listener should catch there in between income source and total number of clients when it comes to a whale client shouldn’t take up more than one-sixth of your income or contributions.

When it comes to retainers for your business, do you go into them assuming that they have an expiration date? Or do you approach them as being evergreen that they’ll last until they don’t?

It’s very similar for my business. The way I frame my retainer offerings is we’re going to work together for X months at the start, and then it’s either a month-to-month renewal period after that, cancel at any time. or a quarterly renewal period. We’re going to renew for three months and then have another decision point. And like you referenced earlier, there’s a ramp up in getting to know you period. When I first started selling retainer offerings, I sold them on a month-to-month basis. And there’s a decent amount of churn because the client would say, Hey, we’re three weeks into the engagement. Where are the results? And I’d explain, well, hey, you know, SEO and outreach, these take time. What we’ve done is do a lot of the setup here, da, da, da. And I realized that I was doing a very poor job of framing it as being a three-month Sort of journey to get the results we’re looking for. And I switched over to selling my services a quarter at a time with that quarterly renewal. When it comes to coaching, there’s a bit of a difference where I have both a three-month and then a month-to-month recurring coaching program. And a quarterly at a time coaching program. And the reason I put those two in place is since, for some people, getting three months of targeted tactical advice on what to do to grow their business works perfectly. And then they’re like, I want to just hop in and out month to month. For some people, they want more of a commitment, more direction. And so the larger retainer-based offering there makes more sense. But in a sense, I’ve structured each to the needs of that ideal client or that type of client. and the outcomes that they’re searching for. Some people are saying, what are the 10 things I need to do to make my business better? Some people are saying, I need week to week accountability to help grow my business. Are you that person for me? And so, by structuring an offering for each type of client, I think I’m able to better meet client demand and client need.

There’s been a lot of times similarly for me on retainer offerings where I have, let’s say I have the best of intentions for what the engagement will look like, but I’ll come in and we’ll start asking questions like: hey, we’re doing podcast outreach here. What’s a landing page we’re pointing people to? We don’t have one. We’re going to use the home page. Well, we probably shouldn’t, so we need to set up a home page. Or a landing page. What sort of lead magnet or offer or incentive are we offering? We don’t have one. Okay, so we probably need to pull together a couple articles and like just ship an e-book, something that’s resonant with the messaging and the problem your app solves. And so We’ve identified these necessary prerequisites that haven’t been put in place yet that we need to put in place before we could even really get started or see success with the outreach campaign. And so there can be this ramp-up period where We’re doing valuable work that’s necessary, but it isn’t quite in the full scope of the engagement. In cases like that, I basically try to communicate across to the client as well as I can that. Well, hey, there, you know, we opened up the hood of the car, we discovered there were raccoons in the engine. We’re going to need to get the raccoons out before we figure out why there’s oil leaking. So, it’s going to take a little longer than we estimated, and this is how that’s going to impact the project timeline. Overall. And I found that communicating that across works well. Either the client is displeased, in which case, well, maybe this isn’t the right project for us to be working on together. Or the client says, Oh, okay, good to know that we need to do these things. What do you need from me? What are you going to handle? And you’re able to move forward with the engagement that way. But even there, there’s a bit of scope drift.

Yeah. Yeah, and I think that causes sort of that double-edged sword of retainers where you don’t want to wake up and find yourself six months later doing something completely different. But You also want the relationship with the client to naturally grow and evolve. As the client says, oh, wow, we trust you. Or you, as the consultant, say, oh, wow, I’ve discovered some opportunities for you to increase revenue, decrease costs, eliminate this problem, achieve this outcome. Here’s my plan for doing it for you. You might wake up, you might unintentionally find yourself doing a completely different line of service for that client. But to jump back to your point, it might be a good sign. So there definitely is this. Push and pull where you don’t want to be sort of pushed into something you don’t want to be doing, but there could be a natural growth to the retainer engagement that just sort of makes sense.

In terms of like danger signs, I’d say pushing from the client towards things that are not in scope or you don’t necessarily want to do. I’ve definitely had client engagements or retainer-based engagements where the client says, Hey, can you also do this other thing? And Typically, it’s something that’s not included or not involved or that I wouldn’t necessarily include, but I could see why it makes sense and I could see why it would make for a great testimonial or case study. And so I’ll occasionally lump in something else, like, oh, can you, you know, do a teardown of this part of our website for us? Yeah, sure, that’ll take me an hour to do, but it will turn into a wonderful testimonial or a wonderful case study or something valuable there. I really think the danger signs are if you’re being pushed into things that you don’t want to do. If you feel like, oh, wow, I’ve been conscripted to do a role or do parts of a role that aren’t what I want. Referencing your earlier comment about. People hiring consultants feeling like they’re going to get a full-time employee at a discounted cost, you don’t want to end up in that scenario.

No, I agree on that. Before we wrap up this episode, there’s sort of like an aside or sort of a different direction I wanted to take it in briefly. When we talk about retainers, one of the outcomes we’re aiming for as consultants is consistent month-to-month income. If you have a client-on retainer, it means you don’t have to worry about finding somebody new to fill that slot. Come next month, but there are a bunch of potential downsides to retainers as we’ve talked about in this episode. You could have scope creep, you could have mission creep, you could have it go in a weird direction. You don’t know what the life cycle is going to be. So let’s zoom out for a second. If the outcome we’re searching for is make more money consistently as a freelancer or a consultant, you don’t necessarily need a standard retainer offering to do that. I’d argue that by Implementing a strong client follow-up campaign. You know, three months after the project, send them an email. Two months after the project, send them a little letter in the mail. Three months after the project, send them another email. And each time, just politely and persistently reminding them: hey, it was great working on Project X and helping you get that outcome. Do you need more help with stuff like that? If so, I’m available. Or do you know other people who need help solving a similar problem? If so, I’m available. I know multiple consultants who bill five figures a week, or not five figures a week, four figures a week. Who repeatedly close new clients off of the back of a simple email that’s basically, hey, it was great working on that project. Do you want to book another week? And the client responds back, yes, we would love to. And they sell another four-figure week. So If the goal is more stability in the income for your freelancing business, it doesn’t necessarily have to be a retainer. It could instead be getting repeat projects with existing clients. And they could be one-off projects, you know, build weekly, custom price, proposal-based, product-ized, whatever. But it doesn’t need to be a retainer. It could instead be: let’s quote a new scope of work and figure out what makes the most sense for us to work together.

And oftentimes, you might be able to back yourself into discovering what a retainer might look like. If you do effective follow-up, if you start closing multiple projects with the same clients, you might discover, like, oh, wow, I. Consistently close them into this type of offering, and they stay around for like two to four months with that exact offering doing the same thing each month. Congratulations, you just discovered a retainer that you could add to your service offering. So, this experimenting with different offerings, this following up with past clients, can be a wonderful way to discover new problems to turn into service offerings to make available at large to any client or any prospect that comes into your universe.