Retainer packages are one of those Best Idea Ever/Worst Idea Ever deals.
When they work, they provide predictable, recurring income (Hallelujah!) and a strengthening relationship with someone you adore and respect.
When they don’t work, they fail to deliver on the confidently predicted income (But I was counting on that! Noooooo…) and a deteriorating relationship full of stress and mistrust and hurt feelings.
There are two vital factors that most affect which way it’ll go. One is client selection – a story for another time – and the other is how you structure your retainer packages.
I have Thoughts about this.
1. Make all retainer packages equally attractive.
When you’re creating other offerings with multiple price points, it’s encouraged to have the Most Attractive Option – usually the middle one. Some people go so far as to make the most expensive option entirely vestigial, one that no-one would choose.
You really don’t want to do this with retainer packages. This is a buying decision your clients are going to have to live with for some time, and you want them to feel they made the right choice. If there is a clear “best option” and they don’t go for it, then they’re likely to feel they ended up with a consolation prize. That discomfort will sour their satisfaction with the retainer package they did choose, and make it less likely they’ll stay signed up for a long, happy time.
2. Differentiate the levels by need, not price.
There needs to be a clear reason why I would choose the lower-level retainer package, and it can’t be “because I can’t afford the other ones”. (Again, that is not going to make me feel good.)
For each level, ask yourself: If money wasn’t an issue, why would someone choose this level?
This always comes down to their needs. A client training for an ultra-marathon needs more time than one who is easing back into regular exercise after a torn ligament. This doesn’t make either of them wrong; they just have different needs, and hence would buy different retainer packages.
3. Structure retainer packages by outcome, not time.
We have no innate feeling for the difference between ten hours a month and fifteen hours a month. It’s completely abstract to us, and we don’t buy abstracts.
At each level, match the outcome to the needs. A business during the off-season may only require regular newsletter writing and the occasional tweaking of their website copy. A business in a period of mad growth might need sales pages, brochures, newsletters, speeches and press releases.
For your own sanity – more on that in a smidgen – you need to know how much time these tasks would take so you can price the offering accordingly. But you are not obliged to make this part of the offering. It’s fine to say, “You’ll receive a monthly newsletter sent to your clients, and review and update of two pages of copy each month.” without mentioning time.
In fact, you need to be focused on the outcome even when you are quite explicitly selling your time, like with coaching. You’re not selling a weekly one-hour meeting; you’re selling a weekly one-hour meeting where your client will set goals, be held accountable for them, and work to dismantle the blocks that have stopped then from achieving their goals previously.
4. Don’t offer anything you wouldn’t want to deliver as promised.
It’s quite common, especially with higher-end packages, to offer much more than you expect your clients to actually use. It’s used to increase the perceived value while keeping the amount of work you have to deliver comparatively low.
But this can backfire. Spectacularly. Ask yourself:
If a client bought your retainer package and used it precisely the way it was advertised, would you resent them?
If the answer is yes, then you need to restructure.
It’s okay to expect that the average client won’t use all of an offering, and to price it according to the amount of work you expect to do. But that should never be low enough that you would feel cheated or taken advantage of if they actually DID use it.
Remember, the key to successful retainer packages is that they keep both of you happy over time.
Have you seen retainer packages done well, or badly? What makes a successful one? Tell us in the comments!