Retainers: More money. More consistency. Less hassle.
Oh the case for retainers...
Phil and I were back and forth on the retainer concept for quite a few years. Sure, it offered consistency and dependent income but it also reeked of stagnation. But before I jump into our thoughts on retainer payments, let's review what a retainer is:
A retainer is a flat rate amount that the client pays on a set date for an extended period of time. For example, your client might pay you $5,000 per month for 6 months. Sometimes this is referred to as "buying hours", as the client may consider this a method of purchasing a chunk of time from you.
An hourly rate, obviously, is a project charged by the hour. An hourly rate is negotiated, design time is carefully estimated, and then all actual hours are recorded by the designer. The client then pays for the amount of hours that are actually worked.
Here at Stone Table, we were hourly fanatics. This allowed us the freedom to take on as little or as much work as we desired. We felt almost completely in control of workload and loved the various projects we found ourselves involved in. When longterm clients started asking about retainers, we were hesitant, as this embedded us deeply into their product for the long haul.
Did we truly want to sacrifice our freelance "freedom" for a bit of financial stability? Was locking in set hours worth risking our love for variety?
I would pause and remind myself that I loved my job as a freelance designer and business owner for two main reasons: diversity and choice.
Most hourly projects lasted a few months. Others lasted a couple years but offered breaks during development and testing. If we grew tired of a project, it was onto the next. If the client no longer needed us, this opened the doors for new opportunities. We were not locked in with lengthy contracts, which allowed us to float from project to project as we pleased.
However, after nearly 5 years working ONLY hourly contracts, we tried our first retainer.
It was a bittersweet, as expected, with moments of tiresome monotony but also, as expected, with a nice, consistent paycheck. This piqued our interest. There's just something so magical about consistent income when you're freelancing.
It feels like free donuts. Or a box full of puppies. Just pure awesomeness.
So we tried it again. And again. And in the end we discovered some amazing things about retainers:
1) Consistent Pay
As mentioned above, this is a big ticket item. You can spend less time finding projects, negotiating projects, writing contracts, signing contracts. You can also spend less time fretting about when your next big gig is going to fall into your lap. Your income is more consistent which makes your business more consistent. Clients love this. Less surprise and more commitment. A big win-win for both sides.
That brings me to my next point:
2) Better Time Management
You will better know the client and you will better know the project. The more you know about your workload, the better you can plan your own freelance schedule. For example, if this project's Slack channel is generally quiet from 10am-12pm, you can plan accordingly and fill this time with other work. If Wednesdays are reserved for new feature roll out, you can prepare ahead for any last minute design demands. Light days on Friday? Schedule a ski day or spend time on your own business.
3) More Passion & Motivation
Hourly projects can be fleeting. You might not feel incredibly connected to them because of their quick turnover and out-the-door implementation. Hourly projects tend to come in waves, when updates are needed and when the project requires your time.
Retainer projects, however, can be quite the opposite. When time is more consistent, the workload is more consistent, and thus, your role within the project is usually more consistent. This "consistency" allows you to become more deeply engaged with the team, the project, and its users. You may feel increased motivation and passion for these retainer projects, as you've developed a more vigorous connection to them.
4) More Efficient UI/UX
As UI/UX designers, we can't do our job efficiently unless we can see the entire picture. Less involvement can produce, what I love to call, Frankenstein products - or products that have morphed into a hideous monster mess of inconsistent UI/UX.
Stop me if this sounds familiar:
"Hi, we need one or two sections of our app redesigned and we don't want to spend more than $2,000. Can you help us?"
How can I create an effective user flow when I am only involved in a tiny section of your product? How do I get to know your users? Where did they come from? What are they thinking as they enter this section of your app? What are they looking for when they land on these specific tools?
Generally, the more deeply you connect to a product, the more efficient your UI/UX should become. With retainers, we trade freelance freedom for commitment. When you're more committed, your work will express this and your users will thank you.
5) Passive Income
This one is a doozy folks. You might actually make more money from your retainers.
When you negotiate a retainer, do your best to estimate the number of hours you think you'll be working per week, month, etc. If you've estimated well, your hours worked should be somewhat close to your estimate.
You might find you have a bit of a buffer from week to week. Some weeks you might go over your estimated time, while others you're well within the range. When it's the day before the end of the Sprint you might be working late, but hey, don't forget that next week your client's office is taking the week off for a company retreat.
And you're still getting paid.
Generally, these incremental bits of buffer time equate to more income in the long run. And we all know less time, more money is everyone's goal.
6) More Awesome References
Consistent time, more efficient solutions, and better working relationships. What more could you ask for? Your clients will love your predictable availability. They'll love the lack of surprise invoice amounts. You're setting yourself up for a fantastic reference if/when the time comes to move on.
Retainers have captured our attention and are now at the forefront of our business strategy. They offer kick ass benefits for both designer and client, and can be incredibly flexible as well. Don't be scared to dip your toes into this pool (as we were) and see if you prefer this to hourly. You might find that your love for hourly is as fleeting as the work itself. More dedication, more motivation, more passion. Isn't that what work should be about?