Reader Q&A: Let’s talk retainers
Plus, should you hire a coach?
Happy Friday, friends!
Today, I’m answering a few questions that have been coming up a TON lately around navigating retainer engagements and investing in coaching. Let’s dive in!
🕒 My client isn’t using all of their retainer hours - what should I do?
If you’re asking this, I’m guessing it’s for one (or more) of the following reasons:
→ You feel bad about billing your client for time they’re not using
→ Your client wants to roll over unused hours (or just not pay for them)
→ You’re worried your client will decide to discontinue the relationship
So let’s start with what a retainer is - it’s a way for a client to reserve your time to work on their business. That time is booked, whether they use it or not. You factor that booked time into your capacity planning, and you might turn down other opportunities based on that. (This is why I don’t roll over unused hours from one month to the next. That said, if rolling over works for your business, make sure your contract clearly outlines how many hours may roll over and at what point they “expire.”)
That said, it can feel not-great to bill for time that’s not being used. So when that’s the case, it’s time to look for ways you can use that time to add value for your client. Share them with your client to ensure you’re aligned - something like “Hey, I noticed XYZ and would love to help with that. I can plan to pick that up this month, unless you have something else you’d prefer that I prioritize” works well here.
Finally, if you’re feeling bad about billing for unused time, remember that you’re running a business. It’s not your gym’s problem if you don’t use it for a month, right? Think they feel bad about billing you? Nope. Same concept.
🤔 I’ve been working on an hourly basis with my client for months, and hours vary from one week to the next. How can I move them to a retainer?
Let’s go back to how we defined a retainer engagement - it’s a way for clients to lock in your time to work on their business. Without a retainer, there’s no guarantee you’ll be available when they need you. A retainer benefits them. Remember that - you’re not trying to push them into something they don’t need, you’re showing them a better way to support their business (at a predictable monthly rate).
Now, in terms of what that retainer looks like - I would start by looking at how many hours per week I’ve spent on the business in the past and averaging that. Then I’d think about additional opportunities I see for the business or other ways I can add value, and how those might build into a higher tier of support.
(Worth noting - as a fractional CMO, my deliverables aren’t always clear-cut, so I’ve found that my retainers work best when they’re based on time. But if you have a business with clearer deliverables, you can build your retainer around those - I always appreciate this when hiring creative or engineering resources on behalf of my clients.)
I like to offer at least two retainer options (different levels of support) to prospective clients so they can choose what makes most sense based on their budget and needs; you can do this using your historical average weekly hours as your base tier, and present a higher tier reflecting any other opportunities you identify.
And while I don’t ever discount my rates, I do price my retainers to reflect economies of scale on higher levels of support. Here’s why: a larger retainer (say, 15 hours a week) means I need to spend less time on business development and admin work than if I took on a few smaller retainers (say, 5 hours a week), so it’s worthwhile for me to reflect this in my pricing to incentivize higher levels of support.
🧢 Do I really need to hire a coach?
This is kind of a hot take, but I don’t love the idea of investing in a coach in the early stages of building your fractional leadership or independent consulting business - I didn’t until I was a few years in (I also feel like business coaching for solopreneurs wasn’t such a thing seven years ago as it is now).
Here’s the thing - coaching is a big investment. Before you go there, spend some time doing the work. Figure out if you even like it, as well as what type of coaching you might need (over the years, I’ve worked with a generalist coach, a public speaking coach, a business development coach, and more in both 1:1 and group settings - here’s what I learned).
If you need guidance, a thinking partner, or a bit of accountability but aren’t ready to invest in ongoing 1:1 coaching, my power hours and group mentoring program are designed for you - if you have questions about either, just reply to this email.
💬 Your Turn
Got a question about building a fractional leadership or independent consulting business? Drop it in the comments or reply to this email - I’d love to address it in a future newsletter!
💡 On A Related Note…
👀 On My Radar
This looks like an amazing session on finance for fractionals and independent consultants
A better way to handle follow-ups
👩💻 Ways to Work With Me
→ Grab my on-demand Build Your Pipeline Workshop
→ Join my group mentoring program
→ Reply to this email to learn about 1:1 mentoring
Fractional Fridays is written by Meghan Hardy, who quit corporate life in September 2017 and hasn’t looked back. As a Fractional CMO and marketing consultant, she helps female-forward direct-to-consumer brands stop throwing spaghetti at the wall and unlock sustainable ecommerce growth.
Reminder: I’m a marketer sharing my experience. Please talk to an attorney about legal things and an accountant about money things. ❤️