Digital Agency Pricing Models: Retainers vs Projects
As 83% of businesses rely on a tailored digital marketing strategy, it may be time for your team to partner with a digital agency. To start, you may be wondering what an agency could offer and how it can benefit your business. Typically a digital agency will be able to offer you two pricing models— retainer or a project estimate —depending on your various business needs.
Today, we will outline the differences between a monthly retainer and per project estimates and review the pros and cons of each strategy approach so you can decide which option is best for you, taking you one step closer to perfecting your digital marketing strategy.
Here’s what you need to know:
The first digital agency pricing model we’ll discuss is called a marketing retainer. Here at Pyxl, a marketing retainer is a recurring monthly or quarterly agreement that reserves a set amount of our team’s time and services for a fee. This arrangement allows you, the client, to work together with the agency of your choice on more than one project or goal over an extended period of time. This concept typically handles an overarching marketing strategy.
Generally, we have found that the continuity a retainer provides often better serves our client’s overall marketing efforts rather than parceling out over a number of individual projects.
Securing a Marketing Retainer
After an initial meeting to discuss your marketing needs and future goals, your agency will typically prepare a proposal for your team to review. This proposal should include an overall marketing strategy, along with a breakdown of the monthly services needed for implementation, and reporting methods used to update you on the strategy’s progress. It should also list the proposed retainer fee and other terms of service.
If your team is happy with the proposal, the next step is to sign and return it so that your retainer can begin! Each month your agency partner will provide the agreed-upon services, moving your business closer to your marketing goals.
Retainer Services Often Included:
- Web Design
- Website Conversion Optimization
- Search Engine Optimization
- Pay Per Click Advertising
- Print Advertising
- Video Marketing
- Email Marketing
- Social Media Marketing
- Direct Mail Marketing
- Content Marketing
Pros of a Marketing Retainer
- Consistent billing for both parties
- Clients can accurately forecast an annual marketing budget
- By paying an hourly rate for a retainer structure, your team saves money as you are generally receiving a blended rate for pre-purchasing hours
- Your agency partner is able to start your work right away without additional estimates or paperwork needed- saving you time
Cons of a Marketing Retainer
- You may have to choose what is most important to your goals for the month since retainer hours are based on a timeframe and are not unlimited
- Depending upon your retainer contract, as certain tasks may go over the budgeted hours, you may have to account for extra payments or leave certain projects behind
- Within this structure, there are no limits on changes to any project, which can sometimes lead to extra hours each month
Per Project Estimates
The second digital agency pricing model is called a per-project estimate. When it comes to a per-project estimate, a digital agency partnership is handled a bit differently. A project estimate is an agreement to a preset amount of hours or costs to complete one specific project rather than implementing a whole marketing strategy. This type of partnership often works best when you know exactly what you are looking for and it is a one-and-done sort of situation.
Per Project Estimates are typically generated based on the agency. Here at Pyxl, we offer the same services for your specific projects as we do for our retainer clients. This can cover anything from website design to a singular social media marketing campaign. Typically during this process, the client and agency stay in contact throughout the duration of the project to discuss the status of the hours used on the project and make sure everyone is aware of the scope as the work progresses.
Pros of Per Project Estimates
- There is no ongoing payment for your team to keep up with
- If you need reactionary solutions to a challenge, this is a quick and easy option
- The review process is often more centralized, as the project estimate provides for a specific allocated amount of time for project revisions
Cons of Per Project Estimates
- No work can start on your project until a formal estimate is signed by your team
- Project Estimates usually take anywhere from 1-3 days to create depending on the complexity of the project you have requested your agency partner to work on. This could mean if you have a time-sensitive project, it is going to take a bit longer to get started
- This project process focuses simply on the exact task that has been estimated and does not allow time for big-picture thinking about your brand
- Sometimes this type of work may take a bit longer to complete as your agency partner will have to allocate time getting to know your business, brand, and goals for one specific project
Overall, it is important for you to communicate your needs to your digital agency partner. This way, you can engage in conversations that will help define the best decisions for you and your brand. Figuring out which path best suits you is important and can be tricky to decide on your own.
If you have questions about any of the digital agency pricing models we have walked through, feel free to contact us here at Pyxl! We’ll work with you to decide if a retainer is in your best interest or if you need a per-project estimate! Contact us today to see how we can help you get the most out of your digital strategy.
Updated: May 23, 2022