Full Transcript for How to price a client-friendly retainer

someone was always there. Carlos: 00:04:52 We asked for a retainer. Carlos: 00:04:53 So that we could allocate our time each week, some, a certain number of hours a month to help out that person. Carlos: 00:04:59 And then there's the other one, which is more about coaching or consultancy. Carlos: 00:05:04 Particularly if you are helping maybe someone launch a new aspect of their business, maybe even launch a new business, maybe restructure whatever it is, there's some kind of complex process that's going on. Carlos: 00:05:17 May be harder to define exactly where you're gonna get to for some of them. Carlos: 00:05:20 Maybe it's easier for others, but it's less process driven and more, I would say results or, or more emergent as a, requires more interaction. Carlos: 00:05:31 And I just wanted to illustrate those as ways of thinking about, all right, well, you know, how does it work as a, being a supplier on the supplier end of a retainer. Ben: 00:05:40 Mm-Hmm. Carlos: 00:05:40 And what is it that, you know, customers might be buying in that particular situation? Carlos: 00:05:45 But I think the thing I wanted to point out is like, if you go into it purely from the perspective, oh, it's a great way to make regular income without thinking about what are you doing? Carlos: 00:05:55 Why are you doing it? Carlos: 00:05:56 Who are you doing it for? Carlos: 00:05:56 And what does it mean for you? Carlos: 00:05:58 Because some, you know, I know many entrepreneurs and people in our community who get bored by process, who get bored by repetition. Carlos: 00:06:06 And so some aspects of that work might not be the best fit for you as an entrepreneur. Carlos: 00:06:11 But like you said, fundamentally, it's like to be able to plan, to know for the next six months that you don't have to go and pitch again, and you can focus on the work, and you can focus on the client and you can do the stuff rather than Carlos: 00:06:26 stuff, there's a comfort in there. Carlos: 00:06:28 There's a, I think, yeah, there's a peace of mind. Carlos: 00:06:31 Maybe that's a false piece of mind, but there's a, there is a peace of mind that people can get from that. Ben: 00:06:35 Yes. Ben: 00:06:36 And I think it is interesting. Ben: 00:06:37 So I was thinking about when I was running an agency, I remember, so we did a lot of projects and there was a point at which we flipped to having some retainers. Ben: 00:06:45 And so a few different things kinda happened the same, my kind of mem my reflection of it is the point at which we flipped to having some retainers in addition to some of the projects, was also a time when there were kind of more projects happening. Ben: 00:06:57 So there's kind of generally sort of more kind of confidence around anyway. Ben: 00:07:00 So the two first retainers that we had were sort of, were pretty lucrative actually, and so I do remember the feeling that actually just every month these two clients were paying quite a lot of money into your bank account. Ben: 00:07:14 And so for me, like to Tom's point around the kind of money stories, so for me, money is a security thing. Ben: 00:07:21 And so when the bank balance is going up, I would feel more secure. Ben: 00:07:26 And so in that sense it definitely appealed to me because when a client is consistently putting money into the account, especially if it's quite a lot, uh, which it was for by my company, your bank balance goes up pretty fucking quickly actually. Ben: 00:07:39 And so when there's a money story around sort of, kind of money as safety, money as security, that's ticking a hugely big box basically, because it's sort of, it's making you feel. Ben: 00:07:49 But, but equally as you are sort of, it's also a slight distraction because the thing which can then very easily become the kind of reference point in one's kind of sort of heart mind as the kind of managing director is all that's good, the bank balance is going up, security, security, and you might lose sight of, hold on a second. Ben: 00:08:07 What actually is the client buying here? Ben: 00:08:09 What are we doing? Ben: 00:08:09 What is it that they're changing? Ben: 00:08:11 Because, you know, sort of marinating in the security of an increasing bank balance makes the kind of warm fuzziness of all of that other kind of focus kind of go away or, or can. Ben: 00:08:21 And so like, I think to your point is a kind of good one. Ben: 00:08:23 It can feel like sort of safety, it can feel like security and the predictability is good. Ben: 00:08:29 Is it keeping you focused on the most important thing? Ben: 00:08:32 And or even knowing what the most important thing is? Ben: 00:08:35 And I think we found ourselves in those situations of kind of clients buying retainers equally though, which is kind of part of the kind of mix here because it was easy for the client to buy that. Ben: 00:08:45 So both of our clients were marketing people in big businesses, big organizations. Ben: 00:08:50 And so those marketing ments are essentially set up around buying ongoing agency support. Ben: 00:08:55 So they had a model in their mind that I just buy agency support. Ben: 00:09:00 And actually in the negotiation of it, what was a lot for us as a monthly sort of amount was very small compared to the global advertising agency that they were also paying kind of monthly amounts. Ben: 00:09:12 So it was as much, it was, there was some ease and convenience and safety and predictability for the client because they were used to buying things in that in that same way. Ben: 00:09:21 There's a whole separate question over whether that's good value for everybody. Ben: 00:09:24 You know, like, because part of what happened inadvertently in the company paying us, the agency in that way is I just felt better about my own money stories, you know, whether that's kind of good business for

them, you know, right? Ben: 00:09:36 But in a way, the thing that was important for them was our client, the marketing director has his meeting whatever, once, twice a year with the global CEO. Ben: 00:09:45 He just needs to be able to show some predictability of spend, really, that he is managing his budget in an appropriate way. Ben: 00:09:51 And so, in a sense, you know, it just kind of points to a conversation we were sort of having at the very beginning of this, what actually are clients buying? Ben: 00:09:57 Uh, and you know, kind of re needing to kind of know all of those things, points to whether a retainer is a good idea, whether a retainer is a good, is a bad idea, irrespective of any of the kind of warm and fuzziness that might go with it. Carlos: 00:10:09 and I'm hearing there when you're talking about, you know, this is how these companies are used to spending money on retainers and compared to some of the other retainers, this is quite a small retainer. Carlos: 00:10:18 What, and if for you, it's like, okay, money coming in the bank, so that's good. Carlos: 00:10:22 There's a kind of an unconscious, behavior happening. Carlos: 00:10:25 It is like, it's like, okay, I, that's what we do. Carlos: 00:10:28 We do retainers. Carlos: 00:10:28 We pay for retainers and that's what we do. Carlos: 00:10:30 We get retainers in because it means, it's the balance. Carlos: 00:10:32 And then what does that mean for people who wanna be more conscious about their work, wanna be more intentional about what's going on? Carlos: 00:10:39 So we've got this idea of retainers. Carlos: 00:10:40 It, on a very unconscious level, it can meet a need for safety and security. Carlos: 00:10:44 For someone who may be a coach or a consultant, and let's say Tom Nixon for instance, he loves helping, you know, founders build these purposeful businesses and really just help these leaders lead well, I'm not sure how he sells that in terms of what he promises and what he says where you're gonna get to, but he did have this example Carlos: 00:11:03 of like, what's the value of uncovering an unconscious childhood bias, bias that is affecting your current leadership style and the way you interact with people? Carlos: 00:11:12 How do you put a number on that? Carlos: 00:11:13 So maybe talking to this idea of money and price. Carlos: 00:11:15 But then even how you engage with people who, how you sell to someone who wants to be coached in that way or wants a consultant to help them. Carlos: 00:11:25 And he touched on his post about kind of selling by consulting, by offering value as soon as possible. Carlos: 00:11:32 And I think that Connects to, you know, what we talk about when you talk about the course around conversations. Carlos: 00:11:38 On one hand there's understanding your customer, but then we talk about how we coach them into some clarity. Carlos: 00:11:44 I dunno if there's anything there that you

could just elaborate a little bit on in terms of selling, not to convince someone, but selling to help them understand the value of working with you. Ben: 00:11:53 So one of my clients, they were in a situation, I dunno if this is gonna sort of loosely sort of talk to this, what we're just talking about here. Ben: 00:12:01 They're in a situation where they are, they've done a discovery piece of work, which sort of talks to that a little bit, which, you know, so together we'll uncover what the kind of key issues are and broadly the work that needs to be done. Ben: 00:12:13 So a good way of putting a kind of containers, not so much on the retainer thing, although that may be something that kind of flows. Ben: 00:12:18 But they were having trouble getting the client to actually commit to the next piece of work. Ben: 00:12:24 For reasons which on some level you think are sort of legitimate. Ben: 00:12:27 But of course, on another level, the reason the client's having trouble committing is there's some ambiguity, there's some uncertainty. Ben: 00:12:33 There is something that they are kind of unsure about. Ben: 00:12:35 And so our job in providing services to understand what all those things are so that we can help the client kind of buy. Ben: 00:12:41 And I think, I was having a conversation with one of the directors and we, he was asking me what I thought that they should do. Ben: 00:12:47 And I was saying I think that you should, you know, you should basically kind of do what sort of Thomas told. Ben: 00:12:51 You should give them something. Ben: 00:12:53 Value essentially. Ben: 00:12:54 And you know, which actually, kind of, which helps solve the problem for him, the immediate problem that he's dealing with and moves them forward. Ben: 00:13:01 And so, you know, that might be called whatever it is, giving them advice or whatever it might be. Ben: 00:13:06 And if you kind of do that, you are essentially, you are kind of helping them take the next step because that is always the kind of goal you are helping them take the next step. Ben: 00:13:13 And you are doing it by being useful. Ben: 00:13:14 You are doing it by being value valuable, which in, you know, in many ways is reassuring the client. Ben: 00:13:19 It's kind of reaffirming your expertise, all of the things that need to happen for a client to, to buy. Ben: 00:13:25 But one of the things they said in the correspondence was, we could start now, and that would help you for these reasons. Ben: 00:13:32 But of course that just sounds like you are just trying to get the client to start now for your own benefit. Ben: 00:13:36 And of course that's never gonna persuade a client to do anything. Ben: 00:13:39 The thing that will persuade a client to do something is them getting clarity around the problem that they're trying to solve or them feeling kind of safe enough that this is the kind of route to moving them forward. Ben: 00:13:51 And so the pseudo, you can be doing that for somebody, the better. Ben: 00:13:54 And that was gonna link to another conversation, uh, was listening to with another client talking, in fact, this morning. Ben: 00:14:00 He was talking about there's a guy called David Baker who writes a lot of stuff for about agencies and pricing and positioning. Ben: 00:14:07 And in a recent newsletter, David Baker had written a post saying that he only, he starts caring about you, ie his prospective client, when you start paying him. Ben: 00:14:16 And my client was saying, but actually he feels the reverse. Ben: 00:14:19 He feels, he starts caring about the client at the first conversation. Ben: 00:14:23 And I would say, you know, that's a really good kind of point of difference. Ben: 00:14:26 You don't need to only care that maybe that's good for David Baker to only care at the point when you, there is a kind of financial exchange happening. Ben: 00:14:33 For my client, it's like, no. Ben: 00:14:35 If you care from the first conversation, then that's good. Ben: 00:14:37 That's an important part of your kind of positioning and how you work. Ben: 00:14:41 It then raises the question, how and when do you kind of introduce the money conversation? Ben: 00:14:46 How and when do you in, you know, introduce the money exchange part of it? Carlos: 00:14:50 that's interesting. Carlos: 00:14:51 So getting to the number, and that is through your conversation. Carlos: 00:14:55 There's you're saying providing value, but then also understanding both parties, trying to understand what is the outcome you're trying to create and how are they considering that a value by being with you? Carlos: 00:15:06 The thing that, a conversation I was having with Tom Nixon this morning is like people spend money and sometimes aren't committed. Carlos: 00:15:12 And some people are committed even though they haven't spent money yet. Ben: 00:15:15 Mm-Hmm. Carlos: 00:15:15 So one aspect is like where you spend you putting some focus, but it isn't a given that they're committed to doing all the work. Carlos: 00:15:24 It isn't a given that you are gonna get the outcome that you wanna do just because they just spent some money with you. Carlos: 00:15:28 And so it's much more important, through the conversations and the initial sharing of value, to unearth and uncover that commitment and how strong that commitment is. Carlos: 00:15:39 Because then if they're committed, then it's more likely they'll understand the value and then the value will be created and you can start. Carlos: 00:15:46 Talking, well start proposing prices that, that you can work with. Ben: 00:15:51 And I guess the flip Of that is understanding what they are committed to. Carlos: 00:15:54 Yes. Ben: 00:15:54 Because if they're not quite committed to the thing that you are talking about, but maybe they're engaged in some sort of money, they started to give you some money, but it's a bit unclear. Ben: 00:16:03 There will be something else which genuinely lights them up and or is where their kind of commitment and motivation goes. Ben: 00:16:10 And the more we can navigate to that, the richer the relationship we'll ultimately have. Carlos: 00:16:13 Yeah, exactly. Carlos: 00:16:15 And then part of that is like, through that journey you'll find out what they're committed to, what they think it's valuable, how much it's valuable to, how valuable it is to them. Carlos: 00:16:22 And there'll be a number that you'll get to. Carlos: 00:16:24 And there, isn't that you have to accept that number. Carlos: 00:16:27 Because at some point also, you have to be clear, to put it bluntly, how much are you willing to get outta bed for? Carlos: 00:16:33 You need to be able to not just, get paid whatever the client thinks gets paid. Carlos: 00:16:38 If you have for the sustainability of yourself and your business some clear ideas of what's important to you in terms of how much you need to get paid. Ben: 00:16:46 Indeed. Carlos: 00:16:47 And and yeah, and that's the whole process of what is all this money about for you? Carlos: 00:16:50 And we can maybe talk about that some other time. Carlos: 00:16:52 I think we, we will cover this again and I think we'll cover this again with Tom Nixon. Carlos: 00:16:57 'cause then I think we'll be able to dive deeper into his particular. Carlos: 00:17:01 Work and how he's tackled it, and he can share some stories about his experience. Carlos: 00:17:05 And maybe we can just have a bit more time to explore that. Ben: 00:17:08 I admire your commitment to ending on time. Carlos: 00:17:13 Well, I admire your commitment to admiring my commitment.