How to sell consulting retainers

One of the most common questions I get emailed from consultants trying to build a sustainable consulting practice is around retainers, and how to sell ongoing projects where you keep working with the client long term.

The question is usually something like “How do I sell a retainer? I mean, what will I do after the first month or two and audits are done?”

This is a completely valid question that I think is way deeper than it appears on the surface.

Many agencies that you look at play to the concept of “services”. In the SEO world, after you do all the auditing then your team starts creating content and doing outreach for links to move the needle forward on rankings, traffic, and ultimately revenue. This is, after all, the most searched type of SEO work:

This model can work very well for ongoing work, and we’re going to talk about it in this article.

But what about the solo consultant? What if you’re employed full time at an agency (or in-house) and taking on side work? Realistically, you have 15-20 hours a week at most to spend working on side clients unless you don’t want to have weekends off at all. The reality is that you’ll burn out, so that’s not really a possibility.

I’m here to tell you that it is absolutely possible to not have too much of a grind in your side hustle, so much so that it is possible to leave your job and go out on your own if you want to.

So hang with me. This is a long post, but I firmly believe that if you stick through to the end you will come out the other side with a much better understanding about the options available to you as a consultant (or agency) as well as practical steps to putting together these projects and retainers that will let you be more successful and less stressed.

Language and caveats

I will also say that throughout this article I use terms like “services business” and “consulting business”. I have tried to be as specific as possible in my language in this post, so let’s define the terms quickly before we start. “Services business” is how I refer to any business that is doing work for clients. This is meant to separate it from a “product” or “software” business, where customers (see the difference there from clients?) pay you for your product or your software to do something.

A “consulting business” in my way of using it has a large part of each project where you are working on strategy and working with a team at a client (or the client themselves if they have the skills and the time to do the needed to get the result for which they hired you) to get the things done. This is usually how solo people work if they last long term.

Also note that I am mostly speaking from the perspective of how digital marketing companies and solo consultants tend to structure their work and deliver projects. I do mention a few times web development and other types of services companies, but digital marketing is what I know best and the majority of my audience, so it is where I am drawing from. If you are the owner of/working in a services company that is not digital marketing then you can absolutely extrapolate out the lessons, though some of the specifics may have to change.

Services vs Consulting

Before we get into the typical agency model and also how I think they can be more profitable (!!) and how consultants can sell ongoing work, I want to dig into a dichotomy first.

There are four (at least) main models you can follow in working with clients. Each has their own plusses and minuses, but they’re all viable ways to build a services business.

One-off audits and no implementation. I know many solo marketers/providers who only do technical SEO audits or similar, and they are very good at them. There are multiple challenges with this approach, namely that you have to also have a stable and consistent set of leads coming in and the ability to close them. This business can be very stable and repeatable, especially if you are the go-to person for what you offer. This is also the easiest type of business to turn into a retainer-style business!
Only services. To have a successful business where you drive results for clients reliably and repeatedly, you set your processes and offering and operate within that. The challenge here is that your process and offering may not be a perfect fit for everyone, so realistically results will vary based on the client. The other main challenge is that many clients who need services done do not see the value in paying for top-quality work, and thus if you have to put your price point to a place that they’ll pay you may have to sacrifice on quality. Whether or not to do that is completely up to you.
Services + consulting. This is the riff on the first model. Within this model, you are (or have in your agency) a senior consultant/person who is working with the client to get things done internally, build business cases, and generally drive the client’s strategy forward. This senior consultant may also have different teams internally (or if you’re a solo consultant, freelancers you work with and mark up their rates) who are doing ongoing work such as content creation or bug squashing/maintenance in the case of a web development agency. The challenge here is usually around getting the right kind of client in the door with the budget and who recognizes the value of strategy.
Consulting only. This in my opinion is the holy grail of a services business because you can charge crazy dollars for it, and for the right client you can drive incredible value and work with them long term. The McKenzies and major management consultancies of the world operate on this model by and large.

As you can see, there is no one way to build a successful services business. That is the main crux of the challenge and why it is so hard to know what direction to go.

The typical agency model

In my career I’ve seen each side of the agency world:

Worked with 250+ agencies/consultants through Credo;
Worked at 2 agencies before going in-house and then starting my own company;
Multiple friends who have started and grown well respected agencies;
Hiring agencies when I worked in-house;
Working as a solo consultant off and on for the last few years.

Of course there are many ways to build an agency and different industries require different models, but most agencies that I see in the digital marketing world work in either the second or third model listed above. If I had to pick on that is more common in this world, it would be the second.

Most agencies in the SEO/digital marketing world tend to work just on services. When a client hires an agency, they are usually not doing it for their strategic expertise. While the founders may be out doing “thought leadership” things like speaking or being a contributor to a platform (think Forbes), it is generally known that the founder will not be working on individual clients.

Clients hire agencies because they need to tap into an economy of scale quickly. This is the same reason they may also hire a bunch of freelancers who can do specific things for them. Usually if you need multiple things done (think research, then creating content, then building links to that content) you will not be able to find one person who is great at all of these. They may be able to do them or may be smart enough to learn how to do it, but then you are often not getting great work.

If an agency is run well, then they have set processes that they put a client through. One example way that agencies structure an engagement is:

Start with an audit/discovery project where the agency does a deep dive into the client’s individual analytics and metrics to determine the strategy that should be executed upon;
Get buy-in and budget from the client to execute on that strategy;
Set about executing on that strategy.

Speaking of SEO/inbound or paid acquisition projects in particular, this is how an agency works. Usually there is some sort of review in place at a specific time, somewhere from every 3-6 months, and ongoing reporting occurring as well, but generally this is how the engagement works.

At the end of the day, a project then ends up being retained if results are being seen or if the client believes that results are right around the corner (though they won’t keep thinking this forever).

Agencies can sell this sort of work, make it profitable without burning themselves out, and deliver a good quality of work because they can tap into an economy of scale and have different levels of employees working on a project. Some of these people are more expensive and others less, but an agency can make this sort of model work.

Why retainers for consultants?

Before I give you the proverbial keys to the highly-paid consulting kingdom, I want to explain quickly why I believe consultants should try to get at least a few retained consulting clients in addition to whatever audits you may also be doing.

While I know a few consultants who have a fantastic business built off of doing one-off audits for clients, the reality is that the most successful (and happy and not stressed) solo consultants I know have a more consistent income because of consulting retainers.

Consulting retainers give you the following advantages:

More consistent income than just doing audits, which lets you focus on doing great work for clients;
Less time spent doing sales to close new work and generate new leads;
Better ability to manage cash flow, save money, and charge what you are worth by being able to say no and thus charging more for the clients you do choose to take on simply because of exclusivity;
A longer time horizon over which your clients can see the fruits of your labor and strategy, which results in happier clients and more referrals.

More money, more time, charging better prices, and happier clients. Those are the reasons you should sign clients to retainers when it makes sense for them.

How consultants can sell ongoing work

But what about you solo consultants out there? You probably love doing the work yourself, which is why you started doing it either on the side of your day job or for yourself.

Your problem is that you can’t tap into those economies of scale as easily as an agency can. You can build out trusted freelancers and processes that work for your business and your clients, but it’s going to come with increased overhead and less time doing the work yourself.

What I usually here from solo consultants asking me the “how do I sell retained work?” is that they’re trying to compete against agencies for the same projects by offering “services”. You and I both know (or can imagine) that this is a fool’s errand.

Sign clients who can execute with internal teams

The best retainer clients are the ones who have the ability to get things done internally, but lack the senior leadership or strategy to know what to do. I call this having a team of runners, but needing someone to tell them in which direction to run.

If a client does not have a team internally that can execute on the strategy and no desire or plans to hire that team, then they are probably better off working with an agency because they can quickly tap into the agency’s scale.

But if a client has a team internally to execute, then they are a great candidate for ongoing work as long as they are already planning on (or open to you getting them to) investing in the area of your expertise for an extended amount of time.

Clients won’t take a risk

If you’re trying to pitch a client on your ability as a solo person to do the same type of work as an agency with 20+ people, you’re not going to win it because they will be taking more of a risk on you by signing with you instead of the agency. We are all incentivized to keep our jobs/incomes and unfortunately that often means making the “safer” choice.

But now that you know that, you can use it to your advantage.

Becoming the less-risky option

Since you now know that clients are risk-adverse almost all the time, you can use this. You have to become the less risky option.

This means a few things:

If you want to command premium prices, you have to be an authority and demonstrate that you can do the work;
You must show your credentials to have a chance of winning great clients;
Show your work and teach others how to do what you do;
Define the niche that you serve well and target those clients specifically.

You may have heard the saying “No one ever got fired for hiring IBM”, which is a way of saying that when you are the established leader in your space and are hired and things still don’t go right, what clients tend to do in that case is say that the problem is just not solvable (even if that is not true). IBM is a trusted name.

Similarly, if you want to be the go-to in your space you need to establish yourself as the leader through showing the knowledge and experience you have and who you have worked with. In the conversion world this is known as “social proof” because it is literally others vouching for you. I even know some consultants/agencies who have done pro-bono or super cheap work for a known name in exchange for being able to use their testimonial and logo wherever they desire (as long as the client was happy with the work).

Pitch different work

To close a retainer as a solo consultant, you have to think outside the realm of “services”.

Clients hire solo consultants for their expertise. They hire an agency because they are the “safe” choice (see the above section on risk) or because they need multiple types of work done and the agency can offer all of them in one place. A solo consultant is rarely great a more than one or two things, whereas an agency can legitimately be good at and able to execute on multiple things at once and at scale.

As a consultant, you should be pitching clients on strategy work and retained consulting, not “services” where you are producing deliverables for them consistently such as content production.

Though, this isn’t to say that you will never do deliverables or audits again. In fact, they can be very useful when selling ongoing work!

How to structure an ongoing retainer as a solo consultant

There are many ways to structure an ongoing arrangement as a solo consultant, but the one that I (and many of my friends) have found to work well is:

A series of audits which lead to a consistent strategy and a retainer to advise during implementation and adjusting strategy as needed.

The best clients realize that strategy needs to come before you start executing on anything. Call it the “ready, aim fire” approach instead of “ready, fire, aim” or whatever smart quip you want to come up with, but at the end of the day strategy coupled with execution wins.

When I work on ongoing consulting projects for clients, the most common way I’ve done them that has resulted in long term success is:

Months 1-2 are full of audits and working through those discoveries with their internal team to prioritize work;
At least one visit to the client’s office in this time period;
Month 3 is finalizing the strategy and beginning to get changes or campaigns set live;
Months 4-6 are strategic consulting which usually means weekly scheduled calls with my POC and their team (if possible) and reviewing work being done before it is set live.

From here, I will usually go in one of two ways:

Conduct another audit to reinform the backlog’s prioritization for work that has not yet been done;
Move on to another campaign, such as a content campaign, to help the first campaigns be even more successful.

Pricing

When it comes to pricing, I have historically done a flat fee for a specific number of months. The key to this is setting the milestones at which you will deliver specific deliverables and then how the months where you are not creating deliverables will be structured. This does two things.

First, it enables the client to “hang their hat” so to speak on what they will get for the money that they are paying. Whether we like it or not, clients love to have something concrete in their hands like a deliverable or strategy so that they can show their boss when they are inevitably asked. Why do you think some agencies (or consultants) who are getting lackluster results send metrics reports every month even when things aren’t getting done?

Second, you are structuring that the project is both deliverables and consulting and some months deliverables are more important and other months consulting/strategy are more important. You are literally outlining it in your proposal, which is sent after you agree on the project scope with the client.

Reducing prices for the consulting section?

One of the more common questions I get about pricing retainer work like this is whether I lower my prices during the pure consulting months.

The answer is that I usually do not, and that is for three reasons.

First, consulting months are never just “pure consulting” because additional questions come up and inevitably research and writing are required during these months. They’re not “deliverables” per se, but you are spending hours doing work that you should be compensated for.

Second, I believe that strategy work should cost more than deliverables/research because you are leaning on your experience to move the needle during these consulting months. I wish we could actually charge more during the consulting months because of this, but clients don’t agree 🙂

Third, I do not believe in charging hourly. While I do usually build initial pricing off of a combination of how many hours I think something will take times my desired hourly rate (hours required*hourly rate), I also believe in charging for value which is why I will often add another 20% to the price that the (hours required*hourly rate) spits out for me. It is true that some day you may hit a pricing ceiling, but I have yet to do it and most consultants need to charge a lot more.

Conclusion and additional reading

Retainer work is amazing when you can get it, when you have a client that:

Needs discovery work and a strategy built;
Needs help getting things done;
Realizes that results take time and the value of having someone senior like you around.

Retainer contracts are not right for every client, so don’t try to squeeze a client for whom it is not the right fit into a retainer.

Also, when doing retained consulting like this make sure that you require 30 days notice of ending the contract and that you do not pro-rate months. You do not want to end up in a scenario (like I did) where you have to reduce the monthly amount by half because the client used your two-week out. Protect yourself.

Finally, if you want to do a bit more reading about retained work and providing value throughout I highly recommend reading High Fidelity Consulting by my friend Tom Critchlow.