August 1, 2020

Projects vs Retainers

It’s pretty common for people to assume that I advocate value pricing for everything.

In fact, I only advocate value pricing for one thing:

Custom projects.

So what exactly do I mean by a custom project?

Here’s the definition from my student glossary:

A collaborative enterprise that is designed to achieve a particular aim.

A project has a beginning a middle and end. It has a goal. It is not open-ended.

But what if a client comes along who doesn’t have a specific goal in mind but still wants your assistance?

Well, that might be a good fit for an advisory retainer.

What’s an advisory retainer?

Again, from my student glossary:

A productized service that gives your clients unlimited access to your advice on a subscription basis.

Like all productized services, advisory retainers offer a fixed scope of involvement at a published price. Advisory retainers are typically paid monthly in advance but could be quarterly or annually.

They’re open-ended and are not aimed at achieving a particular outcome. They’re more like an insurance policy.

Unlike custom projects, advisory retainers are NOT value priced. You just pick a number that you’re comfortable with and buyers will either take it or leave it.

Here’s the thing...

Value pricing is just one way to stop trading time for money. I’m a fan of VP, but it’s not for everyone.

If it’s not for you, there are plenty of other ways to escape the trap of hourly billing.

Pick whichever one you want... as long as you pick one.