Retainers, retainers and retainers. Oh, and also retainers.

A clear dental retainer being lifted from its case

This is categorically not the kind of retainer I meant. Photo by Katarzyna Zygnerska on Unsplash.

Hello and welcome to the second issue of The Business of Analytics newsletter.

This time, I want to talk about retainers and how important they are to your ability to predictably scale a business.

Whether you’re a solo, a small-team, or established agency, retainers are the “thing” that turns lumpy, jagged revenue into a beautiful, predictable forecast you can use to hire new talent, invest in R&D, or even (gasp) pay yourself a little bit more than you currently do.

If the ratio of projects to retainers is too skewed to the left, you’re doomed to a life of famine and feast; which is fine if you structure your working life around that (I’m thinking of digital nomads that might only need to work seven months out of twelve), but for most of us normal folk it’s neither a sustainable nor stress-free way of doing things.

As is sunlight to a tree, and the smartphone to the public transit passenger, so is the retainer to the agency.

Or to put it differently: an analytics practice without retainers is like a dog without a bone, an actor out on loan, riders on the storm. Forgive me.

Anyway, that’s what’s in store this issue. I welcome feedback, suggestions and requests, and I read and reply to everyone, because I’m a supremely groovy human being. As are you.

To business!

There’s no business like retained business like no business I know

Like all of us, I’ve done some crazy things in my life. Many of them worked out well, many others did not.

I’ve done some less-than-good things, as have we all, but I’m pretty sure that at the end of my time on this spinning rock, I’ll look back and consider my life a well-lived one.

And a virtuous one, because I never ever, not even once, made a post anywhere on the internet that started out “every person I talk to raises the same problem” or “I have the same conversation with everyone lately…”

These are simply awful sentences with which to start any kind of argument. They make me want to not believe anything that comes afterward, regardless of context.

It’s preposterous to think that everyone the author talks to -- including their postman, their children, and their poor unfortunate dog -- all struggle with trying to figure out whether to hire a full time or fractional business development manager, or whatever.

(Oh and don’t get me started on the use of the words “most teams”, in daft assertions like “most teams struggle with the same problem,” because there’s no way whatever you’re about to say next applies to Liverpool FC’s 1986 double-winning team, and that’s all I can think about when my poor, desolate, begging brain is forced to read those words.)

And yet.

My job now is to have conversations with people running agencies and consultancies, and regardless of company size, location, specialisation, leadership, basically everyone struggles with the same thing: we need more retainers.

Sometimes it’ll get said verbatim, and sometimes it’ll only be the symptoms of not having enough retainers that have started to emerge.

By “symptoms”, I mean things like this:

“We get months of amazing revenue, and then months of tiny revenue. The former makes me anxious about whether we can deliver, the latter makes me anxious about whether the business is going to survive.”
“I want to hire an extra person, but I don’t want to do so without being sure I can afford to actually pay them every month.”
“We have happy clients that engaged us for one project, and we expect we could have probably done more work for them, but it feels too late now to go back and ask them if we can help on anything else.”

Perhaps some of this sounds familiar?

I will assume that the reader doesn’t need to think too hard about the importance of Retainers. (To show how important I think them to be, I just gave the word a capital ‘R’.)

Retainers are the very lifeblood of an expanding consultancy, bringing predictability to chaos, standardisation to disarray.

For larger analytics-forward agencies that are GA360 Resellers, retainers can get bundled with access to enterprise-tier software (which is probably a big reason why GA360 Resellers, including mine, tend to get acquired.)

Not everyone gets to do that (though, I think it’s a blanket rule that any technical partnership that will increase your exposure to potential retainers is one worth hunting down).

And meanwhile, not every successful analytics agency’s retainers will be linked to a tech platform of any kind -- plenty are 100% service-based.

If this is what you want too, you’ll need to get creative. Here are some ideas that might help get you there.

1. Be the first to mention a retainer

It’s tempting to think that if the client asks for a retainer first, it’s going to be an easier sale to close. That might very well be true, but I think it’s analogous to waiting for someone to ask you out on a date and saying yes, because you don’t want to be the one doing the asking. Lower-risk, possibly lower-reward too. (I know nothing about dating, don’t listen to anything I say about that topic. But you see what I mean.)

Positioning your retainer in the right way (see below), and doing it nice and early, is the way to make it stick, and make it profitable.

2. The bucket of hours as a compromise

I wrote recently about the importance of offering a Bucket Of Hours to clients that aren’t ready, or simply don’t want, to engage in a retainer.

This gives them access to you without needing to open up new projects all the time, and gives you more of a predictable view of revenue than pure ad-hoc, single-scope project work.

How I’d suggest positioning it in this context… present the retainer as the “gold standard” way of engaging with you; and if they don’t want that, then the next-best option is the Bucket of Hours.

Giving a client a “choice of yesses” is one of the most powerful ways I’ve found to conceptualise your offering as something a client firmly needs. I’ll yabber more about this area in future newsletters (yes, that’s a threat and one I promise to make good on)…

3. Work on your retainer offering

Agency: “We need more retainers”
Me: “What’s your retainer offering at the moment?”
Agency: ”…I see your point”

If you don’t have a compelling offering for a retainer, what reason does a client have for taking you up on it?

Reporting and dashboards are not a retainer offering; doing any and every single thing they ask you to is not a retainer offering; and access to you and your team via a shared Slack channel isn’t really a retainer offering either.

Your retainer offering needs to start out with a bedrock of things that the client needs. Maybe it’s data quality monitoring to ensure the checkout’s always being tracked, maybe it’s pipework connecting disparate and distant data sources, maybe it’s fractional day-a-week membership of their team. Whatever it is, the bedrock is the thing they would absolutely agree that they need, and need you to perform it regularly for the medium term at least.

Then you need to stack higher layers: what are the amazing things you could do for them to move them to a future state? You know their business well enough to be able to show them what their dreams could look like! Maybe it’s having a source of truth data warehouse onto which you build a semantic layer giving them a custom GPT they can use to run reports and query data? Maybe it’s running a fancy-schmancy customer lifetime value analysis and delivering it to their C-Suite?

A retainer offering that starts with a bedrock, points skyward to a utopian future state, and includes a middle-layer that will help them get there, is what clients will pay for. Package that with multiple regular touchpoints between your team and theirs (not just WIPs and QBRs but regular training, reports from conferences you’ve been to, and competitive analysis) and you’re moving the conversation in a direction that will only end with the signing of a retainer contract.

An anatomical model of an eye, cut away to show the retina

No, that’s a retina. That’s not what I said at all. Photo by Harpreet Singh on Unsplash.

So who designs this retainer offering?

You can probably tell that the thing I think is most important in all of this is architecting the retainer offering.

Who’s going to design it?

Well, let me take a step back. Broadly speaking, you can pick out the “good” analytics agencies in any kind of lineup because they have an awesome individual that leads the tech knowledge.

Not necessarily a one-person-tech team, but there’s usually a super-smart technical engineer at the heart of it all, who designs solutions, understands how this stuff all works, and that person might very well be one of the main reasons that clients love working with you and your team so much.

This person is NOT who should be designing the retainer offering.

Who should?

In order…

The Strategist(s) and Client Manager(s) who talk to the clients daily
You, as founder or operator, with the supreme commercial instinct
The awesome individual mentioned above

In short: canvass opinion from the engine room, but let strategic minds build it.

They are, after all, the ones that will be delivering this to clients… so why not give them ownership of the evolution of the offering?

Chips and Gravy

Let me leave you with what I hope is an illuminating and memorable analogy.

Your monthly outgoings are usually relatively fixed and predictable: wages, rent, equipment, platform costs, etc.

You need to cover these costs to survive. That’s your “chips”.

Any other income you make on top of that is “gravy”.

(This is as true of a twenty-four-hour gym, dog-walking business, hair salon… no reason why agencies and consultancies should think of themselves any differently…)

The question to ask yourself: what percentage of your “chips” is covered by retained business, and what percentage must you fight for each month?

If you could get 100% of “chips” taken care of by retainers, and all project income on top of that was pure “gravy”, how would that make you feel?

The gap between (a) your current state and (b) the future “gravy” state is the importance of getting this right.

A pile of chips on a wooden board, with a small bowl of gravy beside them

Left: retainers. Right: projects. Any questions? Photo by Nils B on Unsplash.

So there you have it

This was my attempt to answer the question that falls out of that tricky “what current retainer offering are you taking to clients” conversation I referenced above.

It’s a real conversation, and it can be a soul-destroying and scary place at times.

Lamenting a lack of retainers is justifiable as they really do mark the difference between erratic revenue and predictable revenue. I believe that every solo consultant who gave up and went back to the workforce after giving it a red hot go would still be growing their own practice if they’d nailed the retainer thing properly.

But enough of my yakkin’.

Thanks for reading. No AI was used in the creation of the words you just read.

I do this for a living. I work with agencies and consultancies around the world, providing the support I wish I’d had throughout my journey of starting, scaling, and selling an agency.

If you think you could benefit from what I know how to do, I welcome conversation: hit reply or wander over to damionbrown.com.

On that site, you’ll find the newsletter archive, and also information about the Analytics Consultants Circle, a free monthly peer-group call that I moderate, where solo and small-team consultants share battle stories from the field, and we talk about the challenges you face when you grow and scale a business.

The last movie I watched: Free Party (2023).