One of the most consequential decisions in running a service business is how you structure your client relationships: project-based or retainer-based? I’ve done both extensively over my 20 years in digital marketing. Each has real advantages and real pitfalls. Here’s my honest take on when each model makes sense and what you should be moving toward.
What Each Model Actually Means
A project engagement has a defined scope, a defined deliverable, and a one-time or milestone-based payment. Build this website. Run this campaign. Conduct this audit. When it’s done, the engagement is over unless you agree to something else.
A retainer is an ongoing monthly fee for a defined scope of ongoing services. Manage these Google Ads campaigns. Maintain and improve this site’s SEO. Produce this content each month. The relationship continues indefinitely until either party ends it.
Those two sentences make it sound simple. It isn’t.
The Cash Flow Reality of Project Work
Project-based work feels good when the projects are flowing. Win a $15,000 web build, collect 50% upfront, collect the rest on delivery, move to the next one. The problem is the gap between projects. Unless you’re at a scale where you always have a backlog, project-based revenue is lumpy. Good months are great. Slow months are stressful. And the pipeline-hunting never stops.
I went through a period in year 4 of my agency where I was doing almost entirely project work. Revenue was actually solid on an annual basis, but I was in a constant state of anxiety about the next project because I had very little recurring baseline. That experience drove me to deliberately restructure toward retainers. It was the right call.
The Recurring Revenue Case
When 60% or more of your revenue is retainer-based, everything changes. You can hire with confidence because you know your baseline. You can plan your time because you know your workload. You can take a real week off without watching revenue disappear. The compounding effect of good retainer relationships — clients who stay year after year, add services, and refer others — is the closest thing to a durable business asset a service firm can build.
The best retainer clients I have have been with me for 3-7 years. In that time, the initial engagement has grown significantly, the relationship requires less selling energy, and the trust level means we move faster and with less friction than any new client ever can. That’s the real value of retainers — the compounding relationship value, not just the predictable monthly invoice.
When Project-Based Makes Sense
Project pricing isn’t wrong — it’s context-dependent. It makes sense when:
- The client genuinely has a one-time need (a site rebuild, a launch campaign, a competitive audit)
- You want to test a client relationship before committing to ongoing work
- The project is large enough that the lumpiness is acceptable (enterprise builds, major campaigns)
- The deliverable is clearly defined and there’s a natural endpoint
What I always try to do with project engagements is build in an ongoing component. A web build should include a web maintenance retainer. A launch campaign should propose ongoing management. A competitive audit should propose a quarterly monitoring retainer. Every project is an opportunity to start a retainer relationship if you structure it right.
Scope Creep: The Project Model’s Biggest Risk
Scope creep — where clients expand the project beyond the original agreement without adjusting the price — is almost exclusively a project-based pricing problem. Retainer clients have defined monthly deliverables; any out-of-scope request goes through a change request process. Project clients, by contrast, often have fuzzy scopes and add requests throughout execution.
My rule: every project engagement requires a detailed scope of work document signed before work begins, a formal change order process for anything outside scope, and a clause that clearly states what isn’t included. This takes an extra hour at proposal stage and saves dozens of hours over the course of the project.
Retainer Pricing: Getting It Right
The most common retainer pricing mistake is underpricing to close the deal and then resenting the relationship because you’re doing more work than the price supports. A retainer should be priced to cover your actual service delivery time with your desired margin, not priced to what the client said they wanted to spend.
Be explicit about what the retainer includes and excludes. A monthly SEO retainer at $1,500 includes X hours, X deliverables, and these specific activities. It does not include new page builds, paid ad management, or social media content. When clients ask for things outside the retainer, you quote them. This clarity prevents resentment and builds long-term relationships.
Transitioning Existing Clients From Project to Retainer
If you have project clients you want to move to retainers, the approach is straightforward: complete the current project exceptionally well, then have a conversation about what ongoing support would look like. Most clients who have a good project experience and face ongoing needs are open to retainers — they just need to be asked and shown the value.
Frame it from their perspective: “Rather than re-engaging me every time something comes up, a monthly retainer means I’m always on it, you get faster response times, and you’re not paying one-off rates for routine work.”
For more on pricing frameworks that work across both models, see the post on how to price digital marketing services. And for a full picture of the service relationships I offer, check the services page or reach out directly.
Frequently Asked Questions
Which model is better for a new freelancer?
Start with projects to build your portfolio and cash flow, then actively convert early clients to retainers as soon as you’ve delivered results. New freelancers often don’t have enough credibility to close retainer relationships cold — project work lets you earn the trust first. But from day one, structure every project with a path toward ongoing work. Don’t build your whole business on one-offs.
How do you handle a client who wants to go from retainer to project only?
Understand the reason first. If it’s budget pressure, explore whether there’s a reduced-scope retainer that addresses their need. If they simply want more flexibility, explain the trade-offs honestly — project pricing is typically higher per unit of work, response times may change, and strategic continuity is harder to maintain. Some clients prefer project work for legitimate reasons and that’s fine. Not every client needs to be a retainer client.
What should a retainer contract include?
Monthly deliverables (specifically what you will produce or manage), hours included, communication and reporting commitments, what requires a change order, termination terms (typically 30-90 days notice by either party), and rate adjustment provisions (usually annual with X days notice). A retainer without a clear scope is a recipe for scope creep and client dissatisfaction regardless of how good the relationship starts.
How do I deal with a client who feels they’re not getting value from their retainer?
Have the conversation directly, not defensively. Review what’s been delivered against the scope. If there’s a genuine delivery gap, own it and fix it. If the issue is that the client doesn’t have visibility into the work, improve reporting and communication. Monthly calls where you walk through results keep retainer relationships healthy. Clients who feel ignored or uncertain about what they’re paying for are the ones who cancel — not clients who are well-informed and seeing progress.
Is there a minimum retainer size worth taking on?
For my agency, nothing under $750/month. Below that, the overhead of onboarding, account management, communication, and reporting makes it unprofitable regardless of the service. Minimum viable retainers vary by agency and service type, but the principle is universal: below a certain revenue threshold, a client costs you more in management than they generate in margin. Know your floor and hold it.
