{"id":2158,"date":"2025-09-24T13:12:56","date_gmt":"2025-09-24T20:12:56","guid":{"rendered":"https:\/\/functionfox.com\/?p=2158"},"modified":"2025-09-24T13:15:30","modified_gmt":"2025-09-24T20:15:30","slug":"6-mistakes-creative-agencies-make-when-managing-retainers","status":"publish","type":"post","link":"https:\/\/functionfox.com\/6-mistakes-creative-agencies-make-when-managing-retainers\/","title":{"rendered":"6 Mistakes Creative Agencies Make When Managing Retainers"},"content":{"rendered":"
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Retainers tend to be an attractive option for both creative agencies and clients. With a retainer, the client knows their monthly expense will be consistent, and the agency knows they will have a steady stream of revenue coming in. However, retainers can be dangerous to the creative agency if they aren\u2019t managed correctly.<\/p>\n\n\n\n

For those of you who don\u2019t know how a creative agency retainer truly works, it\u2019s an arrangement between a client and an agency to collaborate over a long period of time at a fixed rate on multiple projects. If a customer has specific objectives in mind or is willing to discuss them with their agency, a retainer gives them access to the agency resources at consistently lower prices than usual. With retainers, you can scope out the work together with the client, develop an execution plan, decide what work is included (and what isn\u2019t), and discuss how the work will be controlled.<\/p>\n\n\n\n

Where there is a regular need for a variety of support services from an agency, retainers work best because they enable both parties to cut down on administrative work and increase productive time. They enable customers to work with a passionate team of professionals who are committed to delivering excellent work at a competitive price.<\/p>\n\n\n\n

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Retainers are a great method for agencies to enhance their offerings, grant their clients more creative flexibility, and enhance client relations. While marketing agency retainers can be advantageous for both parties, managing retainers can also be challenging. <\/p>\n\n\n\n

Here are a few common mistakes that so many creative and advertising agencies make with retainers.<\/p>\n\n\n\n

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1. Not Really a Creative Agency Retainer<\/h2>\n\n\n\n

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Here\u2019s something that I come across surprisingly often. A creative agency has a monthly \u201cretainer\u201d with a client, say for $10,000. This retainer includes 100 hours of work per month.<\/p>\n\n\n\n

However, if the agency spends less than 100 hours at the end of the month, the client demands that they adjust the bill based on the number of hours actually worked. If they only worked 80 hours, they would only charge $8000. However, if they go well, that\u2019s just part of the deal. This may sound crazy, but it\u2019s pretty common. This is a prime illustration of a client intimidating an agency.<\/p>\n\n\n\n

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Here\u2019s How to Avoid Being Bullied By Your Client<\/h2>\n\n\n\n

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When establishing a creative agency retainer, set a trial period of 6 months. In your retainer agreement, state that during that period, if the client overuses the retainer by 15% or less, you will let it slide. If they overuse the retainer by over 15%, you will charge them based on your blended rate for each hour above the 15% overuse. If they underuse the retainer during the trial period, offer to repay them via hours credit of 20% of the unused hours per month for 5 months.<\/p>\n\n\n\n

This trial period will allow you to better understand your client\u2019s needs while making it much easier to avoid being caught in a pattern of an overused retainer. The key to this tactic being successful is accurate tracking, reporting, and transparency. That brings me to the next mistake.<\/p>\n\n\n\n

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2. You\u2019re Not Tracking Very Accurately, Are You?<\/h2>\n\n\n\n

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Every single hour needs to be meticulously tracked when it comes to a marketing agency retainer. Writing it down and entering it into your project management software later will not cut it. You must track your time in your agency management software as you work. This is an absolute must!<\/p>\n\n\n\n

As you probably already know, the client will absolutely want to see a detailed monthly report of precisely what they got for their digital marketing monthly retainer with your advertising agency. You can\u2019t be scrambling at the end of the month to enter all of your time. It doesn\u2019t matter how well you\u2019ve organized those cocktail napkins; your time tracking won\u2019t be accurate. Track everything in your agency project management software daily and send a detailed report to your client of all time spent during the month, along with the creative retainer invoice.<\/p>\n\n\n\n

Remember that agency retainers are billed in advance. The time report is for all work done in the previous month, while the invoice is for the next month.<\/p>\n\n\n\n

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Project Management Software Time Tracking<\/h3>\n\n\n\n

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Look into tools like FunctionFox (hey, that\u2019s us!) to track your time while also managing your projects and retainers.<\/a> Then you don\u2019t have to look at 3 different spots (or sometimes more) to find the reporting and information you need! <\/p>\n\n\n\n

You can\u2019t be afraid of the truth here. If you\u2019ve gone way over but intend to ignore the above advice and eat that cost, you better ensure the client is aware of it. On the other hand, if you\u2019ve gone way under, you want the client to be made aware of that as well.<\/p>\n\n\n\n

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Want to Improve Retainer Management?<\/h3>\n\n\n\n

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It all starts with improving efficiency and productivity through accurate measurement of time and resources. Master that \u2013 and it will translate into your retainers. Download our retainer eBook here.<\/a><\/p>\n\n\n\n

Why? Having a client not taking full advantage of their retainer with you can be more dangerous than a client who demands more than what they pay. If you\u2019re consistently coming in under budget, it\u2019s only a matter of time before your client decides their retainer with your creative agency isn\u2019t worth it.<\/p>\n\n\n\n

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3. Poor Work Management for Retainers<\/h2>\n\n\n\n

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How are the tasks of creative agency retainers managed by your team? Most agencies would go for a cumbersome combination of spreadsheets, collaboration, and job management tools. This method usually has the same outcome: poor communication, haphazard planning, and continuous project derailment.<\/p>\n\n\n\n

Managing the retainers\u2019 scope and timeline is essential to your agency. Your ability to complete tasks on schedule and within budget will impact your profit margin, your capacity to attract new business, and your reputation.<\/p>\n\n\n\n

The following are some of the most typical marketing agency retainer management errors:<\/p>\n\n\n\n