Let’s talk about the “R” word. Retainer. For decades, monthly retainers were the bread-and-butter of the advertising world. Back when agencies merely had creative departments to justify the 15% media buy up-charge, it made a lot of sense to keep the meter running every month. Then agencies started to specialize; video, content, creative, guerilla, etc. These shops were looked at as per-project specialists, brought in to knock out a single project for a fee. Accounts started being divided up between the AOR (agency of record) and the per-project specialists.
CMO’s and marketing directors started to question the large monthly fees billed by AOR’s and turned to the smaller per-project shops they had already been working with and wondered, “could we just use them instead?”
Claims of the agency model being broken have been tossed around for years by the agencies and CMO’s alike. Agencies hate the project fee and clients hate the retainer model.
So who’s right? Well, in our opinion: both. Let us explain.
The Problems with Retainers
Retainers are awful when they’re not proving value. As a-matter-of-fact everything is awful when it’s not proving value. But these can be worse, because you’re stuck with them for awhile. Without defined tasks that are required monthly — like ads, blogging, social media management, emails — a retainer doesn’t make much sense. Without a plan, a goal, some metrics to track, a retainer doesn’t make much sense.
Retainers get a bad rap because marketing directors think that agencies will just find an excuse to bill them every month. That may have been true at one point, but these days there are so many channels, and noise, and opportunities where an interesting conversation can happen. It works best when you can have that conversation multiple times a month.
The Benefits of Retainer
Just like the sales process that these marketing efforts are trying to ignite, marketing takes time. One video, one ad, one post, anything typically done on an individual basis will vary rarely move the needle in any discernible way. It takes multiple efforts, weeks, even months before the work really starts to pay off big. That doesn’t mean that clients won’t see a short-term benefit in some cases. But real meaningful growth happens over multiple touches, multiple contacts.
On average, it takes twelve contacts to make a sale. Twelve. From emails, to phone calls, to marketing and advertising. A monthly engagement allows that to happen.
It also allows different forms of the idea. For example, if you run a social media video ad featuring a concept or character, you can carry that over to your website, your collateral, your blog and emails. You can share that with your community. The campaign can take on a life of it’s own. More importantly a lead can go through five or six interesting touches or contacts before they even talk to a sales person — cutting the sales cycle in half.
The Advantages of Both
Sometimes a project just makes sense. Need a new website? Sounds like a project. Need a new website that generates leads? Sounds like a retainer. Need a commercial? Sounds like a project. Need a campaign that drives engagement? Sounds like a retainer.
Here’s a good rule of thumb: if you’re trying to use your marketing to grow sales and your business than having a marketing company working on something every month can be invaluable; if you’re simply trying to solve a problem — plug a leak — than a one-off project is just fine.
It’s like a marriage, feel free to date for a bit. You should feel comfortable with your marketing partner, like you could come to them with any problem and they’d be there for you. Each option has it advantages and like most things: you get what you pay for. Just like in a marriage it works best when both parties are cheering each other on, through profit and reviews.