2 Types of Consulting Retainers and How to Use Them Effectively

hi it's michael zaperski from consultingsuccess.com and welcome to the consulting corner where consultants learn to consistently attract their ideal clients and earn higher fees and today i want to talk to you about the two types of consulting retainers but before we actually get into the retainers and what they mean and how to use them let's actually explore what consulting retainers are so a lot of people have this idea that when you get into consulting that the business is unstable right that when you work a nine-to-five job and you're in the kind of the general employment that that is stability but as we've all seen that is not stability right you can lose your job at any time uh really the control of of your destiny in terms of your job is left up to others and not as is not in your own hands but when you start and run your own business you really have control and consulting retainers are one of the most effective ways to create stability in terms of your income because you get paid monthly month in month out on an ongoing recurring basis uh and that can often be for for months if not years when you're creating great value for your clients and really building those trusting and powerful relationships so consulting retainers can really help you to achieve consistent income and that is great because as you're landing additional projects you know you're always having that base of recurring revenue uh through the consulting retainer model now in terms of the two types of consulting retainers there the first one is called pay for work and this is what a lot of people think about when they think about retainers and when they kind of considerable the concept of receiving ongoing payment on a monthly basis from their clients but the pay for work model is really where you provide ongoing work for your clients and you get paid for it so whether you're receiving a thousand dollars a month or three thousand dollars a month or ten thousand dollars a month the work that you're doing on that monthly basis uh is what you're getting paid for and that's why that model and that approach is called paid for work really it's almost exactly the same as a contract or a project the only difference is that you're you're providing and delivering that work on an ongoing basis and if you're using this model you want to set up at the start with your client and show them what it looks like so from start to finish month and month out what are you going to be working on what will you be covering how will you be helping them what value will you be creating as you work with them on that ongoing basis the second approach to consulting retainers is called pay for access and pay for access is the model that i prefer it's the model that the most advanced and seasoned consultants use because it doesn't rely on you actually providing work with the pay for work model really you're still trading hours for dollars right when you put when you spend half a day or you spend a few hours on that monthly basis for that client you're getting paid for that so the time that you put in is directly connected to the money that you're making but the pay for access model works in that you are getting paid on a monthly basis or maybe the client is paying upfront or for a chunk a period of time but they're really paying you not for specific deliverables and work that you're going to be providing them with but rather they're paying to be able to access you and this is why the pay for access model really only works but works best when you already have an existing relationship with that client meaning that you've already worked on at least one project with them so that they really feel the trust is there you both know that you enjoy working together and that's the basis for the pay for access very uncommon and really i wouldn't recommend to get right into a pay for access type of model or situation with someone that you've never worked with before it's really hard to sell that to a client but it's a beautiful and natural transition after you've done some initial work for that client they've seen the results that you can generate for them and the value that you can bring and they want to be able to access you so why would they do that right why would they pay you on an ongoing basis where you're not necessarily providing them with specific work and deliverables well they're doing that because they know that accessing you accessing your knowledge your expertise maybe even your network is of value to them and it provides them with peace of mind and they do it because they know that and this is the way that you position it is that if they don't lock you down right if they don't have that retainer set up with you then your schedule could get very busy working with other clients and when an issue comes up where they need or really want your assistance and help they don't want to have to get in line right they want to be able to access you right away and so by having you on retainer they have that peace of mind that any time that something comes up they can give you a quick call send you an email and you will respond to them uh you know as quickly as possible within a couple of hours or whatever you set out as as being a reasonable amount of time but they know that you are their advisor that you're on their side that you're there to consistently and constantly be there to support the growth of their business or to help them with any of the challenges that might come up and so for the pay for access model is beautiful because you're not trading time for dollars anymore you might have one month or two months or sometimes even several months will go by where the client doesn't call you up or doesn't that need your help but then in month four or month five whenever it happens they give you a call and they know that you will be there to support them that you will help them to find a solution to the problem or challenge that they're having and that is worthwhile to them and so in terms of pricing your retainers or especially if we're talking about the pay for access that is based on the value that you're providing right if you're charging five thousand dollars a month sixty thousand dollars a year as an example then it needs to be clear to the buyer to your client that they access you and when they access you that you're going to provide answers or solutions or recommendations to them that will be worth far more than 60 000 to them so you always want to make sure that the value level in terms of what you're providing and the value that your client will will receive and that the roi is going to be there for them but those are the two different types of retainer models the pay for work and the pay for access [Music] you

Channel: Consulting Success

Views: 50,911

Keywords: Consultant (Industry), Price (Quotation Subject), Marketing (Interest)

Id: eku4SsZfNh4

Length: 6min 43sec (403 seconds)

Published: Thu Jul 16 2015