Which is the best pricing option for you? Project-based vs Retainer model

The pricing model is often a major consideration for businesses when contracting with an agency. It’s important to find a pricing model that works for both the client and the service provider, and two popular options are the project-based and retainer models. We, as an agency, saw many decision-makers being confused with deciding either the...

Last updated: 4 Jan 2023 - 9 mins read

Dylan Laseur Digital marketing


The pricing model is often a major consideration for businesses when contracting with an agency.

It’s important to find a pricing model that works for both the client and the service provider, and two popular options are the project-based and retainer models.

We, as an agency, saw many decision-makers being confused with deciding either the project-based or retainer pricing models. Since there is a huge difference between them for both you and us, this blog is written.

In this blog post, we will compare the project-based and retainer pricing models and help you determine which is the best option for your business.

Project-based Pricing Model

The system of this model is easier to understand since it means exactly what it says in its name. So let’s start off understanding this pricing model first.

What is project-based?

The project-based pricing model involves paying the agency a fixed price for each individual project. For example, if you hire an agency to set up a Facebook ad campaign or write a content offer, they will provide you with a quote and timeline for the work. If you later decide you want additional work, such as a series of blog posts, you will be charged separately for that project.

How much the business needs to pay depends on the volume, complexity, and difficulty of the specific task you want an agency to complete.

What can you benefit from?

If you decide to choose a project-based model, what can you expect? These are the primary advantages you can expect from this model.

・The completion of the task you assign

・Having clear expectations about project costs

・A commitment to a timeline that meets your needs

・Access to the agency’s specialized skills and expertise that you don’t have

・”Test drive” the agency before committing to a long-term relationship

Who should choose this model?

The project-based pricing model may be a good fit for clients who have a specific project with defined scope and deliverables, and who do not require ongoing support or maintenance after the project is completed.

This model can be beneficial for clients who want to budget for the project upfront and have a clear understanding of the costs involved. It can also be a good option for clients who wish to work with a freelancer or agency on a short-term basis or who are unsure about the level of support they will need in the future.

What’s good for the agency?

It’s a good opportunity to show the agency’s capability and expertise in the short term. We understand you feel it risky to start a long-term contract without knowing the agency’s skills, so the project-based model is a good chance for us to prove we can help your business grow.

What’s good for the clients?

The project-based pricing model is a straightforward way to work with an agency, especially for businesses with a one-time need for a specific project.

While handling your marketing in-house, you can get external assistance for a particular project, such as a website launch or email marketing campaign.

It is a cost-effective and low-commitment option for getting a specific project completed. Also, it’s easy for you to compare the quality of agencies because they provide clear expectations of the project cost and timeline in advance.

Check-list before starting Project-based

You should check some points before starting a project-based model to know whether this option is for you.

Who will be working together?

Before starting, you should check who will be working on your project. Check if the agency is offering in-house designers and developers or freelancers. It’s important to make sure the person in charge has enough capability to achieve your goals.

How long will it take to complete the project?

The estimation of time they will spend on your task is essential information you should know. If the agency can provide a concrete schedule, you can assume they have enough experience and trustworthiness. On the other hand, if the agency’s time estimation is vague or takes an extremely long time for no reason, you should consider whether the agency is really an excellent place to work with.

Do they have enough experience?

Since project-based tends to be short-term, there is not enough time for the agency to fully understand your business or industry from zero. Therefore, having experience working for your industry is crucial to provide a good solution.

Usually, you can check what kind of work the agencies have done on their website. Before starting the contract, you should check whether their solution is high-quality and fits your business. And be careful if you ask an agency that shows few works on its website.

What is the agency good at?

The agency’s strengths are manifold: web development, e-commerce growth, visual design, software development, and so much more. You need to know what areas the agency you will hire is strong in. This is because asking an agency to do something they do not specialize in is often not beneficial to both parties.

Retainer Pricing Model

This retainer model is a pricing model that is becoming increasingly popular these days. Let’s dig into this pricing model to find out why more companies choose this model!

What is the retainer model?

A retainer model is a type of agreement between a business and an agency in which companies pay a set monthly fee in exchange for the agency’s time and resources over a predetermined period of time.

Under this arrangement, the business and the agency work together on multiple projects long term. The purpose of the retainer model is to allow companies to reserve the agency’s time and resources in advance.

What can you benefit from?

As a client, you can expect several advantages from the retainer model. These are tprimarysic advantages you can expect from this model.

・Priority access to the agency’s time and resources

・Better brand and industry understanding by the agency

・Saving money, compared to budgeting projects one at a time

・Optimization and experimentation because of a long-term relationship

・Comprehensive marketing initiatives

Who should choose this model?

The most suitable companies for partnering with an agency on a retainer basis are those that meet the following criteria:

・Growth for long-term

・The company has allocated a budget and is able to pay the retainer fee

・There’s a long-term marketing goal

・The company has the discipline to follow a consistent marketing plan

・The company desires to be a top-priority account for the agency

・The company needs a high level of accountability and performance metrics and reporting

In general, the retainer model seems to be the model of choice for companies that want to reach another level. Since it is a long-term contract, the objective is to grow the company as a business partner.

What’s good for the agency?

The retainer model is preferred because we better understand the client business and its industry to scale up its business. By working together for the long term, we can think about how we can best leverage our expertise and skills to help our client’s businesses grow.

The retainer model is also superior in that all resources can be systematically allocated to the growth of the client’s business. In addition, since a long-term relationship is established, work efficiency is also increased.

What’s good for the clients?

Firstly, from the financial perspective, it is an advantage that you need to pay fixed-rate costs for hiring an agency. Your financial team can forecast the monthly cost of marketing.

Moreover, in most cases, it’s more cost-efficient than hiring a full-time employee or a freelancer. Compared to the total amount of cost you need to make for hiring a person for your company, using an agency can be a more reasonable option. No need for education time & cost or no need for paying them pensions or benefits packages are making this option reasonable as a result.

Aside from the financial advantages, you can obtain top priority and top services from the agency in a retainer model. For agencies, the goal is to grow our client’s business over the long term, so it is imperative to consistently provide higher-quality services. As a result, clients are often enjoying a highly specialized and effective business strategy.

Check-list before starting the Retainer model

You should check some points before starting the retainer model to know whether this option is for you or not.

How does the agency define success?

You should know how the agency defines your own success before starting the retainer model. Defining success is important because you can track and understand how well the agency understands your business issues and how well they perform during the contract. This model is what the long-term goal is essential, whereas the project-based model was about one short-term goal.

What is the agency’s USP?

Since it will be a long-term contract, relying on an unknown agency is too risky. You must know the agency’s USP(Unique selling point) and the affinity with your company. For example, if you run an e-commerce store and try to ask an agency that they are good at developing games, it won’t be a good collaboration. You can research this by yourself by checking the case studies.

What do they need from you?

Even if the agency is fully responsible for their work, there will be something you also need to do for them to proceed with the project. You should make what the agency needs from you clear to avoid any possible troubles later on.

What services are included in a retainer?

Generally, the retainer model offers comprehensive marketing services, and many agencies remain vague about what they do. It is important to clarify what they will do for you before you begin the contract.

Want to know the best option for you?

The fastest way is actually to talk to an agency. Flatline Agency is always welcome to speak with you and help you find the best pricing model. You can quickly get in touch with us through our website. Let’s have a first 15 minutes meeting to step up your business to the next level!


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