PR Agency – Retainer Becoming More Popular?


Hour GlassOver the past few weeks, I’ve been hearing that more agencies are working on projects on a retainer basis vs hourly. My understanding is that the retainer enables an agency to focus on the work versus the administration. 

This is intriguing, because I previously wrote that charging by the hour contributed to part of the bad image that PR folks have. It raises several questions for me:

- Are smaller/boutique agencies the only ones doing this?
– Does this result in better quality work?
– Does this mean there is less “nickel and diming” since it’s a set retainer?
 

Heck, being in-house, I like this. I know what my budget is on a month-to-month basis. No ugly surprises. No explanations to my boss and finance department. What is there not to love.

I posed this question to my twitter folks, “do you think a retainer basis is better than hourly? If so, why?” Here;s the conversation:

Twitter Conversation

I would love to hear from PR agencies and other folks – in-house or agency. Which is better – montly retainer or monthly projections billed against hours?

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2 responses to “PR Agency – Retainer Becoming More Popular?

  1. Thanks for tweeting the link to the post…I can expand a bit on what I was getting at in the tweets. Your point about knowing what the bill is from month to month is both a blessing and a curse–I think it would operate like rollover minutes. Some months would be underserviced, some over–but as with many things, the months that are underserviced would get questioned (“hey, what did we pay $K to them for this month?”) and the overserviced wouldn’t be recognized as much. With billables, you are paying for what the firm is putting into the effort, which will likely ebb and flow from one month to the next.

    Billables though, as I said in my first tweet, can be difficult too. I think there’s less of an incentive to look for efficiencies when a firm is getting paid by the hour. Just my .02!

    Jen

  2. As the co-owner of a PR and Media Agency BLUE is the WORD, I would like to comment on your post.

    It really depends which stage of growth your business is at. You need to approach business differently depending on your revenue requirements. We could all earn more than we are at any stage, but the point I would like to make is that you cant answer this question without taking into account your development and specific circumstance or credibility in your industry.

    As a new business, I have experienced that a retainer is far safer (with a discount as an incentive for x hours every month as per a previous post) so that you can at least to a degree gauge how much you will get in a month. In addition, over-servicing should simply be part of your process until you have enough clients who trust and make use of you exclusively.

    What we do is clearly stipulate exactly what they will get for a set fee, but in reality, you work that figure out based on the amount of hours you will spend doing the work, not against the value of each task / project. Any additional hard products need to be budgeted for separately as this wont happen every month.

    In essence – a structured service needs to offered at a monthly fee and hard products at a separate budget but with the guarantee of industry networks and contacts and the experience to manage the processes with someone they are comfortable working with.

    In conclusion, the challenge of generating large projects from scratch every month is stressful and does not always lead to a relationship that will bring return business. In Communications, this relationship is your bread and butter, not the guys with lump sums of cash once off.