Replace Hourly Rates and Start Charging Monthly Retainers
I am a huge fan of setting up monthly retainer packages in your consulting business – or any other type of service-based company, for that matter.
On of the biggest challenges that consultants face is creating a stable income in your business. Too many consultants get stuck in a “feast-or-famine” roller coaster. One month you’re booked, the next, scrambling for clients.
It can be exhausting to bounce from project to project, charging an hourly rate without any guarantee of where your next client is coming from.
In contrast, monthly retainers are just as easy to sell as hourly services and create predictable, recurring monthly revenue.
Monthly retainer contracts are a common practice across various industries, including consulting. And they are actually a win for your clients too.
When you provide monthly retainer services, you ensure that your expertise is readily available to clients during a specific period.
You get to dive deep into understanding their problems and to proving better solutions for them.
What is a Monthly Consulting Retainer Fee?
A retainer model delivers high-quality services to your clients on the regular.
You charge a fixed sum of money at the beginning of each month and this retains your time to work for a specific client. You agree to be on retainer for a specific number of months, or on an ongoing basis.
The structure of consulting retainer contracts can vary, but generally fall into two categories: pay for work and pay for access.
While both retainer packages have their benefits, I personally prefer the pay for access model, and here’s why:
Pay for access retainers involve a client paying a consulting firm a set fee for ongoing access to their expertise and guidance. This model allows for greater flexibility and agility in addressing client needs, as consultants can be available to provide support whenever necessary.
In contrast, pay for work retainers involve a client paying a consulting firm for specific deliverables or projects. While this can provide clear expectations and a defined scope of work, it can also limit flexibility and make it challenging to pivot when client needs change.
With pay for access retainers, consultants are incentivized to build long-term relationships with their clients, as the ongoing nature of the retainer contract provides a stable source of income. This can lead to deeper understanding and knowledge of the client’s business, which can ultimately lead to more effective and efficient consulting services.
This package reflects the value of your services, the outcomes you provide, and the level of your expertise. It does not reflect the time you spend or methods you use in getting to the Big Results you promise.
It’s value based, not time based.
Packaging your services this way automatically differentiates you from your competitors, and attracts the type of client who is looking to make an investment that she/he can get a return on.
Want to learn more about the psychology behind Premium Pricing? Bonus reading: Why You Should Charge Higher Prices for Your Services
How To Make The Switch To Monthly Retainer Fees as a Consultant
As a consultant, transitioning to monthly retainer fees can be a smart business move that provides a steady stream of income while also offering more value to your clients.
Here are some steps to help make the switch:
1) Identify areas where you can simplify a solution or take something off your clients’ plates. This could be anything from ongoing support and guidance to project management or regular strategy sessions.
2) Take your consulting offers that you provide now and mold them into a service that your clients would benefit from on an ongoing basis. Think about how you can package your services into a monthly retainer that aligns with your clients’ needs and provides consistent value. Structure it so that it follows a series of steps.
3) Determine your pricing strategy. Consider the value you are providing, the amount of time and resources you will need to invest, and the competitive landscape in your industry.
4) Communicate the benefits of monthly retainers to your clients. Explain how this model can simplify their lives or businesses, provide ongoing support and guidance, and ultimately lead to better outcomes.
5) Be clear about what is included in the retainer package and set expectations around deliverables, timelines, and communication. This will help ensure that both you and your clients are on the same page and can work together effectively.
By taking these steps, you can successfully transition to a monthly retainer fee structure and provide ongoing value to your clients while also building a more sustainable business model for yourself.
Monthly retainers help keep your clients from having to worry about their Big Problems, and help them to budget for the long-term. No surprises, no arguments over how long this project took versus how long that project took.
Plus, you’ll be able to learn, morph, and deliver better results if you work with them on an ongoing retainer.
When you deepen long-term relationships with your clients via monthly packages, you stay at the top of their minds for additional services, and they’re more likely to think of you immediately for referrals, too.
More on creating your own referral program here >> Word of Mouth Marketing: How to Get More Clients With a Referral Strategy
How to Create Structure for Your Consulting Retainers
Think about the products/services you currently offer. Then ask yourself some of these questions to get started:
– Are there services my audience has been asking for?
– What problems do they have that I can help solve consistently?
– What is the minimum amount of time I need to deliver my Big Results? Is it a three months commitment? Six months? A year?
– How can I transform my current offerings into monthly retainer packages?
– How can I price them so that I’m meeting my income goals and delivering jaw-dropping value?
As you become more efficient at delivering your services, you can save time and focus on growing your business and adding more team and clients.
By carefully structuring your consulting retainers to meet your clients’ needs and provide consistent value, you can build a sustainable and profitable business model that benefits everyone involved.
Additionally, when you with your clients on an ongoing basis, you can deepen your relationships with them and gain a better understanding of their needs over time. This leads to better results, more effective communication, and a greater likelihood of referral business.
Ultimately, offering monthly retainer packages is a great way to provide value to your clients while building a sustainable business model for yourself. Just make sure that the packages you offer align with your clients’ needs and provide real value on an ongoing basis.
How to Price Monthly Retainer Packages for Consulting Services
When it comes to setting a retainer fee, the amount will vary based on the type of consulting service being offered.
For high-income or complex skills that are being offered by an experienced consultant or consulting agency, you could charge a monthly retainer fee of $10,000 or more. However, if you’re not an expert in your field yet or you are targeting smaller businesses, it’s best to start at a lower fee, like $2,000 per month for retained clients.
Charging at least $2,000 per month ensures that you can earn a six-figure income by signing on just three clients with retainer agreements as a consultant.
To provide options for clients, you could also offer different pricing tiers that start at $2,000 per month but can go up to $10,000 (or more) per month depending on the client’s needs.
Pricing tiers give clients the ability to add on services that they find valuable.
As you build your expertise and you become in more demand, you can increase your retainer fee to $10,000. And – because you have predictable income – you can hire virtual team members to help you provide the services as you grow.
How Much Should I Charge For a Monthly Retainer Fee
This is the big question every consultant wants to know.
It’s important to recognize the value of your experience, skills, and unique know-how as a consultant. Your work is not cheap, and moving from charging hourly rates to monthly retainer packages can dramatically improve your income and quality of life.
Pricing your new packages at $3K, $4K, $5K, or more can deliver a win-win for both you and your clients. If you’re providing ongoing, transformational results, clients will feel like it’s a steal because the cost of not hiring you is too great.
Creating structured monthly retainer packages can help you build the business and lifestyle you’ve been dreaming about. With your expertise and a pricing strategy that aligns with your value, you can secure a steady monthly income that supports your goals and ambitions.
If you’re ready to take your consulting business to the next level, there’s no better time to start packaging your services and building the life you deserve.
Schedule a breakthrough call and let’s talk. We’ll get you on track to adding recurring monthly revenue to your business and kissing the days of hour-by-hour hustling goodbye.