Estimating retainer fee
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- gramme
Anyone have experience with figuring what to charge a client for ongoing design of a digital (iPad) magazine? I have no idea where/how to start. Never done one before. I know how complex it needs to be, but have no idea how much time it will take to create.
- Mr_Right0
I would think it would be like figuring out any other project, web, print or other. Start by coming up with what you charge per hour. Then, how many hours per week you think you'll spend on it. From there you can calculate a per month figure. Take that per month figure and double it. That is how much per month to charge.
Remember: Whatever figure you give to your client they are most likely to say that it is too high. So if you start off high you can knock a little off to make everyone happy.
Also, I have found that all projects take twice as long as I think they will take. That's why when I estimate I will double the final time I come up with. It seems to work for me.
Cheers
Mr.
- JSK0
Few things to consider.
Duration
Lose of business due to retainer (competitive or hours)
Actual cost
Retainer cost (at discounted from actual cost)
Over flow or lack of work
Overage and under spend per periodIt depends on how you structure the retainer.
Example
Retainer for 6 months with payment of $4800 per month.
Your actual cost with out retainer could be $6000 per month
Paying 20% less for guaranteed work for next 6 months.
Total guaranteed income of $28,800 for 6 months
Overage will come out of next month's retainer.
Underage will apply to next month's retainer.
If in case where underage equates to less than $28,800 in 6 months, the clients have the right to either sign another retainer for 6 months or try to spend the left over with in that time.
But the underage transfer to next retainer contract can not be more than 10% of the total retainer.
You can either get paid monthly or paid up from or 50% of the retainer or 25% per quarter.
In contract that if the client terminates the work or ceases to do anymore work, minus the work already done, they are responsible for the whole retainer.
- JSK0
Another method is to do flat rate retainer.
You get paid $5500 per month (actual work estimated is $6000) but there is no effort / time spent tracking.
You may not do a lot of work one month but other month you may do a lot more.
- bjladams0
we sell blocks of time in advance, if they buy 20 hours but we complete it in 15, we let them know that they still have 5 hours of work in the bank- this usually leads to another good sized job as they already feel they have a headstart.
- JSK0
For iPad, it would depend on how the app is created (template or refresh design every month).
You would have higher up front cost for dev and reduced cost for maintenance. Make sure that the client understands that you are doing content update. And additional cost for app update.
- vaxorcist0
I've worked at agencies who had retainer clients... some were great, becoming like a cool relative, some were crazy, becoming like a bad marriage.... and yes, after a while you may know each other waaaay too well.....
So, early interactions, including estimates and how exactly they respond to bids and negotiation can tell you how they will be later....
Also, clearly spelling out relationship rules can be important to control the expected availability of our time.... for example, do NOT call all the phone extensions in an office one after another if the first one doesn't answer because we are in a meeting.... you could hear that in the meeting and everyone knew who was calling, quite funny but a bit desperate sounding too....
The Blocks of time idea may be a really good one, also I've heard of some shops who say will give you a discount on the last x hours of time if client has met deadlines for materials to be delivered up to that point...gives them an incentive to finish that goddamn about us text...
- vaxorcist0
First, are the bidding out to multiple agencies? Or do they looooove you?
Second, try to focus NOT on price, but on what they get.... not just your amazing talent, but your outlook, your ability to really get them, and the fact you care, no amount of retainer can make somebody care when they just don't....
Their risk is paying a retainer to an agency who just does enough to keep them happy and uses the hours to pitch lots of other clients....
- It's just me. We've already been working together for a while. They aren't talking to anyone else.gramme
- gramme0
The design will be basically a bi-weekly refresh. It won't be any more or less templated than any other magazine that publishes twice a month. The print magazine is apx. 80 pages, give or take. I'm fully aware that the iPad app page count will be totally different (more pages).
I'm already doing everything for this company, except the design of the print magazine (although I did consult on the redesign). I redesigned their identity in the spring; been doing all ads, collateral, web work, etc. for the past 18 months or so as well.
I'm working on a brand standards book right now that will allow me to hand off most of the hands-on marketing stuff to an in-house person. At that point, I'll basically be the gatekeeper of their brand, from a managerial standpoint. This will allow me to spend more of my hands-on time on the iPad app and other big projects (their website is also due for an overhaul). What I'm trying to figure out is if I'd have to hire an employee in order to meet the demand. Right now, I have my hands full doing all the brand/marketing design work for these people and working with a handful of other clients as well. I don't mind giving a big chunk of my time to this client, because I enjoy the work. But I don't want to spend 100% of my weekly time working for any one client, especially with baby #2 on the way. I'd be working every weekend just to find time to do work for other people.
- gramme0
In other words, it's not just a retainer for iPad app work. It involves managing the entirely of their brand presence. I already have a pseudo-retainer with them. I'm trying to figure out how it all shakes out if I stop designing every little web ad or postcard, but still managing that like an off-site creative director after handing off the brand standards. The actual hands-on design work would be iPad, website, and significant print projects like their fundraising literature, media guide, etc.
- JSK0
List out the needs with the client so you are covered.
- vaxorcist0
You may have great trust with them, so the not below may not matter, but beware change of staff at client can change expectations....
Try to make sure that if, say one month they use up only 70% of your time allotted, they know this more like a "time bank" for when they need you to crank on a deadline and use up 130% of allotted time....
Otherwise, bean counters may have you doing random shit just to fill up hours.... and when really busy, expect you to do it all to "save the relationship"
- gramme0
Yeah, that's a good thing to consider, vax. But so far, no one is asking to see the tally of hours spent. All they really care about is if the work gets done. I merely keep track for my own sake, so I can get a clear grasp of how I spend my time.
Last fall, the publisher said to me "We'll buy 30 hrs/wk of your time. And if you figure out how to do the work in less time, great. That just means more time for you to look for new clients. We see it as being in our best interest for Metagramme to grow and thrive."
- JSK0
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