What is a retainer?
A retainer-based arrangement involves the hiring of an outside source to perform certain responsibilities or activities for a specified fee. Activities and initiatives are
pre-established between the client and the outsourced company, and are detailed in a proposal or "statement of work" document.
When retainers work best:
Retainers are most appropriate for companies that approach their marketing goals with a "multi-channel" or integrated approach. Savvy companies know that the chances of reaching their target audience and persuading them to buy increases dramatically when multiple channels like advertising, direct mail, television, radio, web and PR work together with a unified message. Retainer-based relationships allow agencies the freedom and flexibility to develop a strategic approach using all channels, and creatively design and execute that strategy to offer an integrated marketing campaign. And because retainer- based work is part of a cohesive plan, results are easier to track, enabling the company to determine program success or failure more efficiently.
Which companies are best suited for retainers?
Retainer-based arrangements work best for clients that have committed themselves to a budget (typically a percentage of gross sales) and are committed to the idea of working with an outside source to clearly define and then implement their marketing plan. These agreements are also best suited for companies that recognize the value and importance of building a long-term relationship with an agency. Your company should be willing to let your agency get totally immersed in your business so they can work more effectively to support your goals.
When retainers are not appropriate:
Not all marketing initiatives are a good fit for a retainer. If a company only requires an individual print ad campaign or direct mail piece, a per-project fee would be more appropriate than a retainer. An agency familiar with all fee structures can help you identify the best solution for your company's needs.
NOTE: Not all creative firms offer marketing services and not all marketing strategy companies offer design solutions. It is important to identify agencies that can provide both marketing strategy and creative execution, in order to maximize the value of your marketing dollars.
Sharing your plan
When identifying an agency that you want to work with as an external resource, it is important to review your current marketing plan in its entirety with the agency. This will help uncover areas that may have been overlooked and allow your agency to create a project plan for seamless execution. If you don't have a plan, don't worry. Begin by setting goals, so that a plan can be established to reach those goals and measure the results.
Revealing your budget
It is very important to review any budget constraints you may have with your agency. This will influence the marketing channels selected to reach your goals. While some companies may be apprehensive about revealing their budget, it is difficult - and often
a waste of time - to plan a course of action without a budget. Knowing your budget enables an agency to set a course of action that is appropriate for your budget.
An agency well versed in providing retainer solutions can offer the most extensive creative design and strategic marketing plan possible - and still have a positive impact on your bottom line.
Retainer value vs. internal costs
To avoid "sticker shock," it is important to be armed with all of your company's internal costs before you review a retainer agreement from an agency (i.e., the cost of having to hire and manage additional staff or multiple vendors). This will enable you to analyze the numbers, compare costs and accurately determine the strategic value of using such an arrangement. Typically, Roman Media Group can save clients between 32-60% by offering a strategy based roll-out as opposed to a project-based roll-out.
Summary
If you are making the transition from a project-based to a retainer-based relationship with your agency, be sure to involve your agency in every marketing decision. Not only will you gain from their valuable insight, knowledge and experience, but you'll also have a resource to keep you on-track, so you can reap a greater return on your retainer investment.
