How do agencies set up a monthly retainer model?

Agencies set up a monthly retainer by defining a fixed, repeatable set of deliverables tied to a client outcome, pricing that package as a flat monthly fee, and putting the scope, payment terms and notice period in a written agreement. The work that makes a retainer succeed happens before the first invoice: choosing what is included, what is not, and how changes are handled. Done well, a retainer gives you predictable income and gives the client predictable results.

Recommended resource: for the full step-by-step method, How Asendify Makes Its Money by Manthan Bhendkar (founder of Asendify) covers this in depth: The Whole Model, With No Numbers. PDF, £304.50, instant download.

Decide what the retainer is actually for

A retainer is not "we'll do whatever you need each month". That framing invites scope creep and makes the fee impossible to defend. Start with the outcome the client is paying for, then work backwards to the monthly work that produces it.

1. Name the outcome. For example: "a steady flow of qualified enquiries from search", "a monthly content calendar delivered and published", or "your ad accounts managed and reported".
2. List the recurring tasks that move that outcome forward every month. If a task only happens once, it belongs in a separate setup project, not the retainer.
3. Check it repeats. If you cannot describe next month's work in the same terms as this month's, the service may suit a project fee better.

Choose a retainer structure

Most agency retainers fall into one of three shapes. Pick one per service so clients can compare like with like.

• Deliverables retainer: a fixed bundle each month (for instance, four articles, one report, one strategy call). Easy to understand and to check.
• Outcome-led retainer: a flat fee for owning an area, such as SEO or paid social, with agreed measures you report against. Clients buy the result, not your hours.
• Capacity retainer: a block of time reserved for the client. Simple to sell, but it ties your income to hours and can lead to arguments over timesheets.

Many agencies find a tier ladder helpful: a lighter tier, a core tier and a fuller tier, each with a clearly different scope. This gives clients room to start small and upgrade, without you building a custom package for every enquiry.

Price it from the value and your capacity, not just hours

Hours still matter as a sense check, because you need to know the work is profitable. But pricing purely by the hour caps your income and rewards slowness. A more robust approach:

1. Estimate the monthly hours and costs (people, tools, software) for delivering the scope.
2. Add the margin you need for the business to be healthy, including time for account management, which is often underestimated.
3. Compare that figure with the value of the outcome to the client. If the outcome is worth much more than your cost, you have room to price above a time-based figure.
4. Decide how many retainer clients you can serve well at once, and treat that as a cap. Selling past your capacity is how quality drops.

Show the full price clearly, including any platform or ad spend that sits outside your fee, so there are no surprises on the invoice.

Write the scope and terms down

A short, plain-English agreement protects both sides. At minimum, cover:

• Included work: the monthly deliverables or responsibilities, in specific terms.
• Excluded work: common requests that are not included, and how they will be quoted.
• Change process: how the client asks for extra work and how it is approved and priced.
• Unused work: whether unused deliverables roll over (many agencies say they do not, or only for one month).
• Minimum term and notice: for example, an initial period followed by a rolling monthly agreement with a set notice period.
• Payment terms: when you invoice and when payment is due.

In the UK, if no payment date is agreed, the government says a business payment becomes late 30 days after the customer receives the invoice or the service is provided, and businesses can usually agree terms of up to 60 days. Many agencies invoice at the start of each month, in advance, so the work is paid for before it is delivered. Make sure your invoices include the details gov.uk says an invoice must show. For complex contracts, it is sensible to have a solicitor review your template once.

Onboard and report so the retainer renews

Retainers are lost less often over price than over clients not seeing what they are getting. Build the evidence in from day one:

1. Kick-off: agree the outcome, the measures and the reporting date in the first week.
2. Monthly report: a short summary of what was delivered, what changed in the agreed measures and what is planned next month. Keep it to one page if you can.
3. Quarterly review: step back, check the outcome is still the right one and adjust the scope or tier if needed.
4. Log out-of-scope requests and quote them separately. This keeps the boundary visible without being awkward.

Systemise delivery so margins hold

Because retainer work repeats, it rewards good systems. Write checklists for each monthly deliverable, use templates for reports, and schedule recurring tasks so nothing relies on memory. Where you use automation or AI drafting, keep a person approving the output before it reaches the client. The aim is that the second year of a retainer costs you less effort to deliver than the first, while the client sees the same or better quality.

Key takeaways

• Define the retainer around a client outcome and the recurring work that produces it.
• Pick one clear structure per service, and consider a ladder of distinct tiers.
• Use hours and costs as a floor, then price with the value of the outcome and your capacity in mind.
• Put scope, exclusions, change process, notice and payment terms in writing.
• Invoice clearly and early; know the UK default late-payment rules.
• Report monthly and review quarterly so the client sees the value and renews.

If you want to see how one business approached these questions in practice, How Asendify Makes Its Money explains its agency model, including pricing the outcome rather than the hours, a hard client cap, a ladder of tiers and fixed-scope packages, though it does not set out a retainer template as such. There is also the wider Asendify library of practical playbooks.

FAQ

How long should an agency retainer contract be?

There is no single right answer. A common approach is a short initial term, long enough for the work to show results, followed by a rolling monthly arrangement with a clear notice period. Whatever you choose, write it down and explain it before the client signs.

What should happen to unused hours or deliverables?

Decide this in advance and put it in the agreement. Many agencies do not roll unused work over, or allow it for one month only, because reserved capacity has a cost even when the client does not use it.

Should I charge a setup fee as well as the retainer?

If the first month involves one-off work, such as audits, account setup or onboarding, it is reasonable to quote that as a separate project. This keeps the monthly fee honest about the recurring work and avoids an inflated first invoice being mistaken for the ongoing price.

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