To overcome this, consider switching to a retainer fee model. There are many ways to calculate and collect a retainer fee. The easiest way is to divide the price of the work you need to do for a client by the number of months you will do it. For example, if your total project is $4,500 and you will be working on it for three months, you could charge the client $1,500 each month. However, a more advanced way also takes into account your costs, employees, taxes, and many other factors. But no matter which option you choose, the benefits of a retainer model are clear:
You are paid a fixed amount Svalbard and Jan Mayen Islands email list each month for the duration of the project. This helps you predict cash flow and manage agency growth. You get guaranteed payments. That’s because this fee model practically forces customers to pay on time. In most cases, companies require payment of each advance in advance or immediately at the end of the month. And they won’t do any work until payment is cleared. #two. Productize your services I admit, I’m a big fan of this strategy. And I run my agency as a produced service. Because you know: Productizing a service takes the retention model to a whole new level.
Stand Out From the Rest?
Instead of simply turning the project-based fee into more predictable and regular revenue, you can package your service into an offering similar to a systemized monthly product. In a product model, you offer a prepackaged packaged service for a fixed monthly fee, similar to how many SaaS companies operate. And just like SaaS companies, you get paid upfront for every month you work with a client. In fact, many product companies use Stripe or any other similar service to charge customers’ credit cards automatically each month. There are no 30 net payment terms.
No problem. No delays. Kudu.io is an excellent example of a product service. The company offers monthly Adwords management packages, with prices depending on the advertising investment budget. Here is another example. DesignPickle offers a product design service for a monthly fee. Probably one of the most successful product service agencies, WPCurve provides WordPress support for a monthly fee. #3. Collect BIG deposits Collection deposits act as collateral for a future payment. A deposit confirms a client’s commitment to the project and signals that they can pay. After all, as my friend,
Here’s How to Stand Out, Attract New
Calin Yablonski says: “Without investing money in a project, clients can change or cancel any project at any time. After all, what do they have to lose?” But here’s the problem, I think agencies often charge deposits that are not high enough to justify a timely payment. Look: A client who paid you only 25% up front really has no incentive to part with the rest of the cash. After all, it’s still a pretty significant amount of money. But if you charge a higher deposit, say, 50% or even 70%, they only have a small part left to pay. And from your perspective, it’s not substantial enough to withhold payment or defer the money elsewhere.
So, if you don’t feel comfortable charging a monthly retainer fee or producing your agency services, consider significantly increasing your deposit requirements. Collect at least half of the money in advance. This way you will also secure your business in case of late payment. A sizable deposit can provide you with a flow of money that could help you complete the project. The Creative Clinic, for example, charges a minimum of
