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Tweakonomics: Why B2B Marketing Agency Retainers Suck

Tweakonomics is what you should be using to pay for your marketing services – it’s what we advocate for all our clients.

Let me explain….

This post hereby announces the death of the good old monthly agency retainer.

Paying your agency a fat monthly stipend – agreed in advance and for a set duration – is not in your interest, because the dynamics of this type of deal are not stacked in your favour.

Think about it. Retainers mean the following bad things for you as a client:

  • Type of work is agreed too long in advance
  • Volume of deliverables is set for too long a period
  • Style of work is agreed before you’ve had a chance to learn about one another

Retainers are broken because they’re geared to be retrospective. When you pay a fixed amount in advance for an ill-defined set of services, everything you do in the future will – in some shape or form – be related to either justifying or using up the allocated time and money.

This leads to the following unsavory effects:

  • Meeting time devoted to activity reviews
  • Lengthy paper reports that nobody reads
  • Bargaining about the value of time spent vs work done

…in other words, the retainer model means a large proportion of time and output is devoted to justifying the terms of your financial relationship. And, worse, none of the above encourages speed, clarity and innovation – all of the things you want your marketing to be.

Wouldn’t you rather be progressive?

At Velocity, we think Tweakonimics is where it’s at.

Tweakonomics is based on an understanding that marketing is…

  • A risky endevour (it’s a lot of cash to shell out on a regular basis)
  • Something that needs to be directly linked to your sales efforts
  • A constantly moving feast of activity
  • In need of constant measurement, adjustment and tweaking

As such, we think it’s a bad idea to agree anything too far in advance (you wouldn’t do sales reviews on an annual basis, right?!). We prefer to structure our work loosely in the sense that we can always adapt to changes and opportunities, but tightly in the sense that we spend every minute of our time on something proactive and productive.

Here’s how we do it:

  • Everything we do is a ‘Program’ (a ‘Marketing Acceleration Program‘ in fact)
  • This program is geared to do one thing: move you forward
  • We only ever plan on a maximum of 90 days activity
  • We only ever ask for 90 days worth of funding (and so share your financial risk – if you’re successful within 90 days, then we are too)
  • We only ever commit 30 days of activity to paper
  • We don’t do time reports (but we’re crazy about delivering stacks of value activity)
  • We don’t do paper reports of any kind
  • We assess our work on a 30 day basis by asking one question only: ‘did we achieve everything we wanted to achieve (and if not, why not)’… and we do this face to face with our clients

By doing this we keep all our planning and reporting (ie, paperwork) to a minimum, and run everything we do to a 30 day cycle. This means we can always tweak for enhancements, adapt quickly and, importantly for you, it means we are constantly working hard to earn the right to support you for the next 90 days.

But above all, this notion of Tweakonomics keeps our work ultra-focused.

So – kill all retainers.

We’d love to be in your 12 month budget, but we’d rather you made us earn the right to bill against it. So think 30 days minimum, 90 days maximum. Think Tweakonmics.

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One Response to “Tweakonomics: Why B2B Marketing Agency Retainers Suck”

  1. John

    Never seen retainers work – they’re just a convenient way for, typically, 2 big companies to settle the bills and keep the Excel development team in business. I’d rather my agency spend time on doing the work, iterating it quickly and staying in constant communicant* with me. The results are the arbiter here – if they suck, then we part company. But if they rock, then lets roll! And if thats means I’m being tweaked – then even better!

    * this should have said “communication” but i misspelt and spellcheck came back with “communicant” which appealed to the Blade Runner in me.

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