So you’ve decided you need some external help with your marketing and you’re going to engage a marketing agency. But should you be looking to work on a retainer or project basis?
For those that haven’t worked with an agency before, a retainer is a regular payment, normally over a 12 month period. A project relationship sees you work with an agency for a much smaller period of time.
There are benefits to both ways of working and which one is right for you will depend on what you want to achieve.
Most agencies and consultancies prefer retainers as they guarantee regular, repeated income, which is good for cashflow. How much the retainer is set at will normally be based on a simple calculation: The value of the time needed to meet the brief divided by the campaign period.
The benefits of a retainer are that you are giving the agency a much longer time frame to work with you. This will mean that they get to know you, your audiences, target markets and target media (in the case of PR) a lot better as they have more time to invest.
Another benefit is that you are securing the agency’s loyalty. This is particularly important for PR, social media and marketing campaigns. You don’t want your agency working with one of your competitors. You need to ensure there is no conflict of interest.
Another benefit of a retainer relationship is that your marketing activity will have a consistent tone of voice and style.
The vast majority of agencies want to have long-term relationships – years not months. A retainer agreement shows that you think the same. Because you want a long-term relationship, the agency will be keener to please. They will be constantly thinking about you. This isn’t to say agencies aren’t focused during project work, they are. However, they are only focused on you for the duration of the project and tend to stick to the confines of the brief rather than looking around the brief.
Project agreements work best when there is a set start and end date or a specific target you want to achieve.
Festivals, event support, exploiting specific trends and product or service launches lend themselves perfectly to project-based relationships. Design work – whether it be a piece of print or a website – are also projects.
Project agreements allow organisations to work with a wide range of agencies and not commit to a long-term agreement. They give you a chance to work with agencies with specific skill sets. So, if you have a niche product or market (young people, for example) you can work with an agency that specialises in that sector.
Project work is also a good way for companies to ease themselves into a longer-term relationship. If your chosen agency makes a good job of a project, you can then give them another and another.
A word of warning though – because of the short-term nature of projects, agencies sometimes charge a premium hourly rate for them compared to retainer relationships.
Whichever way of working you decide on, it is vital that you prepare a detailed brief, set a budget and, most importantly, have SMART objectives – things that you want to achieve that are Specific, Measurable, Achievable, Realistic and Time-bound.
So, which way do you prefer to work? Project or retainer? We’re happy with both!