The word "retainer" might scare you, but it holds some key benefits to your business.
As a digital agency, we manage marketing & ad campaigns for a significant number of our clients (or partners, as we like to call them). Our services don't stop there, we love teaming up with our partners on a variety of projects from complete rebrands to custom web application development.
During the Research & Strategy phase of our phased approach to projects, there is often the question of whether a project should be executed under a fixed estimate or retainer agreement. And while there are many articles online that cover the pros and cons of either, I want to write a compelling argument for why you should engage in a retainer for your next project.
Why Retainers Work
Like most business people, I also used to cringe at the thought of a retainer for services. I don't know if it was the feeling of uncertainty that they seem to evoke or if business accounting has gotten too far away from double-entry bookkeeping to effectively track asset appreciation, but in either case, retainers are mistakenly avoided in many companies and projects where they could shine.
Outside of the general as-needed nature of retainers, they are great for a number of reasons which are:
Effective scope and features management
Let’s all be honest here; often things change over time. The design & development processes can be very similar to the telephone game you may have played as a kid. The premise of the game is simple. A message is whispered into an ear of one of the players so that no one else can hear. Then, each player whispers the message as they heard it into the next player's ear, which continues player to player down the line. At the end, the last player states aloud what they were told to see how it has changed. I will wait a minute while you play a round or two with your office coworkers…yes, I know it's fun!
This effect is a combination of principles found in Epistemology (philosophy conceded with nature and scope of knowledge) which have cost most companies both time and money. From the planning phase of a project-driven approach where you plan all the things, draw up an estimate, and then agree to a statement of work; at which point you ostensibly start a telephone game which would be within the project scope. As a project progresses, it is very likely that a number of change orders will be required to fix and adjust valuable feature implementations that were lost in translation. Getting a budget re-worked and approved to continue the project has brought many to fiery ends. Sacrificing time, money and client-vendor relationships. Many fingers are often pointed or thrown.
In contrast, retainers allow a budget to be applied over the course of the project such that the end produces a result ready for a production launch or in the least can be measured against the bottom line and added to the next budgetary period. While a hard date is always ideal to managers and executives working inside the constraints of resource allocation, I don't know many development teams or project managers that could implement a pre-planned project with no new discoveries that were overlooked or unclear during the initial planning phase.
More fluid use of partner resources
I have a secret to tell - I can't tell the future.
I know it’s shocking but nothing I have bought off the internet has been able to solve this problem for me. My guess is that you can't either (if you can, please see the contact us page and apply to work here, we could use a person with your unique skill set). When you are engaged in a retainer with an agency partner such as Inovāt, occasionally you may get ambushed by the marketing team on a Monday morning about an ad design needed ASAP. It is as simple as a phone call to allocate some design hours toward getting it done and continuing on with your day. Or you could start a email and paper chain that will require more approvals and signatures than the original Declaration of Independence. I know which one I would pick.
Meet needs not deadlines
Retainers allow for something that is extremely important to understand when investing into technical debt. Technology that meets a business need creates long-term, tangible value for a business and its customers. Planning the ideal version of a solution and iterating towards it ensures that you know what you will end up with and at any given point you will have a small piece of the best version of the best possible outcome. Taking the approach that technology should be built around timing and positioning only ensures that you will have a precise version of what you want that will not be at all accurate to the ideal solution. It isn't coincidence that repeatability and reproducibility are synonymous to precision as you will have to repeat and redo aspects of a project when it evolves on a timeline and not a target.
A fantastic real-life example of these two positions in practice is found in Jim Collins' Great By Choice as he discusses the effectiveness of the “20-Mile March”.
Simply put, it cites the divergence in strategy between the explorers Roald Amundsen and Robert Falcon Scott, in their efforts to lede their teams to be the first to reach the South Pole in October 1911. Amundsen marched his team 20 miles a day, everyday, regardless of adverse or favorable weather conditions and obstacles in their path. Scott was late in getting started and was on a deadline. Amundsen made it there and back; Scott and his entire team died along the way.
More than a mere philosophy, the “20-Mile March” is about having concrete, clear, intelligent, and rigorously pursued performance mechanisms that keep you on track…not on time. It is more important and valuable that you arrive at the right place rather than arriving somewhere you don't want to be at the right time.
It is my hope that in reading this post you will sincerely consider looking into retainers as a way to leverage technical debt in a way that will be a multiplier for your business and not a mile marker. Over the years and countless projects, I have seen deadlines leave projects and companies that make them reaching the finish line with a dead project without having completely solved the problems they set out to address.
If you have any questions or what to know more about building software for your business success, don't hesitate to reach out to us.