How to price a retainer

A retainer sells reserved availability. Pricing it as a bulk discount on hours misunderstands what the client is buying.

Retainers are attractive on both sides — predictable income for you, guaranteed access for the client. They go wrong when priced as a discounted block of hours.

Step-by-step

1. Enter the hours you will reserve.
2. Enter your rate and any retainer discount.
3. Set the rollover terms.
4. Read the monthly fee and the effective rate.

You are selling availability

Reserved hours are hours you cannot sell to anybody else. If a client uses only half their retainer, you did not gain — you held that capacity and turned other work away.

That is why the fee should reflect the reservation rather than the usage, and why unused hours generally should not roll over indefinitely. Unlimited rollover converts a retainer into a bank of cheap hours the client can spend all at once, at the worst possible moment for your schedule.

Rollover terms that work

• No rollover — simplest, and hardest to sell.
• One month's rollover — a fair compromise, and the usual answer.
• Rollover with a cap, so the accumulated balance cannot become unmanageable.

The discount

A modest discount against your standard rate is reasonable, in exchange for predictability. A deep one is not: you are guaranteeing availability, which has a real cost, and the client is guaranteeing a minimum, which has real value to you. The trade is roughly even, so the discount should be modest.

Frequently asked questions

Should unused retainer hours roll over?

Limited rollover — one month, or with a cap — is the usual compromise. Unlimited rollover turns the retainer into a bank of discounted hours that can be spent all at once.

How much discount is reasonable?

A modest one. You are selling reserved availability that you cannot resell, which has real cost, so a deep discount gives away the value of the arrangement.

What if the client uses more than the retainer covers?

Bill the excess at your standard rate, agreed in advance. Absorbing overflow silently is how a retainer becomes unprofitable.