Latest / Freelance Careers with Fexingo: Independent Work, Consulting, and Self-Employment / How a Freelance Consultant Raised Rates by Offering a Monthly Retainer
Transcript
- Lucas: So, we've talked a lot about raising rates through value-based pricing and dropping hourly billing, but there's another lever that a lot of freelancers overlook, and it's the retainer. Not just as a way to lock in income, but as a rate-raising tool in itself. Luna: You mean like a monthly subscription for your services? Lucas: Exactly. And today I want to look at a specific case: a freelance marketing consultant I'll call Dana. She was charging seventy-five dollars an hour, doing project work, and she was stuck at around sixty thousand a year. She switched to a monthly retainer model, and within eight months her annualized income jumped to eighty-one thousand, a thirty-five percent increase, while actually working fewer hours. Luna: That's a big jump. How did she convince clients to go from paying per project to paying a flat monthly fee? Lucas: Well, the key wasn't to frame it as a price increase, but as a change in the relationship. She went to her existing clients and said, 'Instead of you calling me whenever a fire breaks out, let's block off a set number of hours each month, and I'll be proactive about your marketing. You get priority access, and I get predictable cash flow.' Luna: So it's about selling the value of ongoing support, not just the hours. Lucas: Right. And she priced it not as hours times rate, but as a package. She looked at what her clients were spending per month on average, and then proposed a retainer that was about twenty percent above that average, but with a cap on hours. So she was effectively raising her effective hourly rate, but the client saw it as a predictable monthly cost. Luna: Did she have any clients who pushed back? Lucas: A couple did. One client said, 'What if I don't need you some months?' And Dana's response was, 'Then you might not need a marketer at all.' She was willing to lose that client, and she did. But the ones who stayed valued the certainty and the proactive attention more than the flexibility of hourly billing. Luna: That's a bold move, but it must have felt risky. Lucas: It did, but the math worked. She went from four active clients to three, but each retainer was thirty-five percent higher than what they were paying before. And she freed up almost ten hours a week that she used to spend on admin and onboarding for new projects. Luna: That's the thing about retainers: they reduce the overhead of constantly hunting for new work. Lucas: Exactly. And that's a win-win. But there's a trap. If you're not careful, you can end up with what some call 'subscription fatigue' — clients who keep paying but stop engaging, and eventually cancel because they feel like they're not getting value. Dana avoided that by building in a quarterly review where she'd show the client exactly what she'd done and what the impact was. Luna: So it's not set-and-forget. You have to keep proving your worth. Lucas: And that's where the rate-raising potential comes in. Because at each review, she could point to the results and say, 'Your retainer is still based on the original scope, but we've added this and that. Let's adjust.' One client moved from two thousand to twenty-five hundred a month after a particularly strong quarter. Luna: That's a solid twenty-five percent bump just by showing results. Lucas: And the structure makes it feel natural, not like a negotiation. With project work, every new quote is a fresh battle. With a retainer, you're in an ongoing conversation. Luna: Speaking of ongoing conversations, you know what keeps this podcast going? It's the listeners who support us, honestly. A couple of dollars a month is genuinely what keeps these episodes ad-free and coming out. If you've gotten something out of what we're talking about, you can support us at buy me a coffee dot com slash fexingo. Lucas: Yeah, it really does make a difference. Even the price of a coffee helps cover the hosting and the time we put into research. And we're not backed by any big network, so it's just you guys. Luna: Exactly. Anyway, back to Dana. She also had to think about what happens when a client wants to pause or cancel. Did she have a minimum term? Lucas: She started with a three-month minimum, which gave her some stability. But after a year, she moved to a month to month with a thirty-day notice, because she found that clients appreciated the flexibility, and it actually reduced cancellations. When people feel locked in, they look for a way out. When they feel in control, they stay longer. Luna: That's a counterintuitive insight. The more flexible you are, the more committed they are. Lucas: And that's the deeper psychology: retainers shift the focus from transactions to a partnership. You're no longer a vendor, you're their trusted advisor. And that's a position from which you can raise rates without pushback, because they're not buying hours, they're buying outcomes. Luna: So what's the first step for someone who wants to make this shift? Lucas: Look at your current clients. Find one or two who have recurring needs, who ping you every few weeks with something. Calculate what they spent with you over the last six months, divide by six, and that's your baseline. Then propose a retainer at that number, but with a scope that includes proactive work, not just reactive. Luna: And if they say no? Lucas: Then you learn something. Maybe they don't see the value, or maybe you haven't positioned it well. But don't be afraid to lose that client. The ones who say yes are the ones who will grow with you. Luna: It sounds like Dana's success wasn't just about the retainer itself, but about the mindset shift. Lucas: Absolutely. She stopped thinking of herself as selling hours and started thinking of herself as solving a specific problem for a specific business. And that's what allowed her to raise rates not just by twenty or thirty percent, but by forty percent on some accounts. Luna: Forty percent? That's impressive. Were there any pitfalls she had to watch out for? Lucas: One was scope creep. Clients would ask for 'just one more thing' because they thought it was all included. Dana handled that by defining the scope clearly in the agreement, and then having a conversation if the client wanted to expand. Sometimes she'd say yes if it was small, but she'd track it and bring it up at the review. Luna: So you have to be disciplined about boundaries, or the retainer becomes a burden. Lucas: Right. And another pitfall is underpricing the retainer out of fear. If you price it too low, you'll resent the client and the quality will drop. Dana's rule of thumb was to price the retainer at what she wanted to earn per month, not what she thought the client could afford. Luna: That's a good principle. Price based on your value, not their budget. Lucas: And the final piece is the agreement itself. You want it to feel like a partnership, so include a clause that allows for rate adjustments at each renewal, maybe tied to a performance metric. That way, it's not a surprise when you ask for more money later. Luna: So setting the stage for future increases from the start. Lucas: Exactly. Dana actually wrote into her contract that the retainer would be reviewed every six months, and that the rate could be adjusted based on the scope of work and the results achieved. And that made it normal, not awkward. Luna: I love that. It's transparent and it keeps the conversation open. Lucas: And that's the real takeaway. Retainers aren't just about predictable income, they're about repositioning yourself as an ongoing partner, which is where the real rate-raising power lies. Over to you, what do you think is the hardest part for most freelancers to make this leap? Luna: I think it's the fear of losing control. You're giving up the 'per hour' mindset, and that can feel like you're capping your earnings. But Dana's story shows that if you structure it right, you can actually earn more with less effort. Lucas: And that's the paradox. The more you focus on value instead of time, the more you can earn. And the retainer is the vehicle that makes that shift concrete. Luna: So if you're a freelancer listening, maybe look at your own client list and see who you could approach with a retainer proposal. It might just be the thing that moves your income up a notch. Lucas: And if you do, let us know how it goes. We'd love to hear about your experience. And as always, thanks for being part of the Fexingo community. We'll catch you next time.