Why Focusing on Retainer Is detrimental For Your Business
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I almost committed the worst of Consulting sins today.
I needed to have a long critical look at myself and demand an explanation …
“What were you doing? What were you thinking? Are you currently MAD?” Gurus myself.
The thing is, I was planning to offer my services over a RETAINER!
OMG! Can you imagine? What lunacy? What sabotage? What bad business!
Reason #1 Not To Work with Retainer
In the first instance, a retainer caps your revenue.
Let’s be honest, we all work hard and attempt to deliver our best. Are you currently really likely to “stop” when you’ve delivered the monthly dollar value?
If you’re charging $5,000 a month, you’ll probably deliver $6,000 - $7,000 or more price of value because you just can’t leaves things hanging. We’re all prone to under charge and over deliver.
Reason #2 Never to Work with Retainer
Which leads me to my second point, think about those couple of months where the hours are less and also the deliverables small?
Your customers will feel ripped off - believe that they’re investing in something they they’re not receiving, particularly if you’ve been over-delivering in past months.
You’ve just made yourself susceptible to debate on the hours you’ve worked and also the impact you’ve made. And again, forget every one of the months you worked over time; they don’t count.
Reason #3 To not Work On Retainer
Third, focusing on a retainer always results in scope creep. You consistently end up doing a lot more than agreed and invariably, there’s a disagreement about what’s included and what’s not.
Someone always ends up disgruntled and feeling short-changed.
Reason #4 To not Work with Retainer
And lastly, my fourth bitch about retainers is that like a Consultant, Coach or Adviser focusing on retainer, you lose your magic powers and fairy dust.
Familiarity breeds contempt. With that you lose what you can do to charge a premium.
So, what’s the content here? Don’t work with retainer!
Simple.
get more clients
PS. Ok, OK … so there can be a few special exceptions. Leave a comment below if you want to know when it’s OK to operate on retainer.