- Companies may become burdened by managing multiple service providers that work on a project basis
- There are many benefits to working with service providers in retainer-based relationships, including a consistent team
- Use these signals to know when it’s time to make the switch from project-based relationships to longer-term commitments
In high school, the gold standard for relationships was “going steady” – when you and your selected partner were exclusive to one another for dates to football games, the local ice cream shop and school dances. Translated into today’s terms, that would include updating each partner’s Facebook profile to say that they’re in a relationship. Signals that indicated it was time to go steady included stability in the relationship, less interest in hanging out with other partners, and a generally fluttery heart.
Companies looking at their service provider and agency portfolio may not recognize when the time has come to “go steady” with a vendor. Companies often begin work with an external partner on a project basis, not wanting to be locked into a long-term agreement. Many companies recognize the benefits of moving from a project-based relationship to a retainer-based relationship – which include consistent team members, reduced hourly rates and more strategic guidance. Where companies struggle is understanding the right time to start having those discussions and if there are signals that indicate when this might be the right move.
Here are three signals that it’s time to consider moving from a project-based relationship with a service provider or agency to a retainer-based engagement:
- Difficulty managing multiple vendors. Companies that have taken the “try before you buy” approach to agencies may end up with more than they can handle at the end of the day. Internal resources are left with a good chunk of their workload being dedicated to managing each agency, spending time repeating the same messages and feedback. They will see the benefit of having a stable vendor point of contact, so that internal resources spend less time juggling vendors.
- Proactive strategic guidance. It is a terrific sign when an agency is coming to the table with recommendations that could take your work together to the next level. Most importantly, if the ideas are offered in good faith, not as part of a hard pitch for an upsell, it might be time to consider a broader relationship.
- Review cycles eating up time and budget. If you work in a highly matrixed or regulated industry, you may find your project-based service providers are having lulls and downtime when work enters your review process. Having a service provider on retainer will allow you to work on other projects during these periods when one project is being internally reviewed.
Of course, there are times when going steady with a service provider isn’t best, like if the vendor isn’t achieving its goals or if it is in a region that may be reduced in priority in the next six months. But once you’ve identified that the time is right to have a discussion with the service provider or agency about moving to a retainer contract, make sure that you share these reasons with the vendor. They will benefit from the transparency and will likely share with you how the new contract structure will have additional benefits for your team and company.
Are there any other signals that you would add to this list? I’m interested in hearing what readers think!