“The demand for certainty is one which is natural to man, but is nevertheless an intellectual vice.” — Bertrand Russell
Two weeks ago one of my clients (a motion design agency owner) was sharing her top goals with me and she let slip this zinger:
“Oh, and I want us to generate more consistent revenue… through, you know… retainers.”
(Warning: rant ahead)
It’s time for us to stop all this fanciful talk about “retainers.”
Retainers are not the promised land.
I’m ranting because there is a pervasive myth in our industry that retainers are some sort of holy grail: you generate steady revenue from your client in exchange for steady creative work for your firm.
After all, retainers are what all those big AOR agencies out there do, right? It’s part of what makes them so successful, right?
Did you miss the earthquake – going back at least a decade or more – about the broken advertising agency model?
Charging hourly rates for a fixed number of hours – a.k.a. retainers – sucks.
Why? Because over time, retainers always disintegrate. The work suffers. The relationship decays. The value proposition evaporates.
Sure, at first, everything is grand. But then gradually, behind the scenes, you and your team secretly grow to hate your retainer client. And behind their closed doors, your client grows to despise your firm, too.
So why do you dream about “AOR-style” retainers?
Because risk-taking is hard. So instead of stepping up your positioning, marketing, sales, and production systems to consistently produce value and generate bulletproof profits, you entertain notions of some elusive mythical creature called “the retainer.”
But what you crave is something wholly unattainable: certainty.
Then as you grasp for certainty, you discover the cure is worse than the disease. Because certainty comes at a very high price.
Think about it: as your client, a retainer is my big fat promise to pay you a lot of money… over a long period of time… for a dubious return.
Well, in order for me to agree to that deal – risky, expensive, inflexible – guess what? I will shrewdly clobber your rates. I will own everything. I will pay you slowly. And when push comes to shove (which eventually it always does) on revisions, scope creep, overages, etc., I will always win… and you will always lose.
In other words, hourly-based retainers – although very efficient – turn your firm into an indentured servant cranking out commodity services.
“Everyone knows the more you are packaging your creativity in units of doing – e.g., hours – the less creative you are being.” – Blair Enns
If that’s the price of certainty, you don’t want it.