When it comes to working with marketing, design and web agencies, one of the biggest decisions you’ll face is how to structure your relationship. Do you go with a monthly retainer arrangement, or stick with the flexibility of paying project by project?
Having worked with hundreds of clients over the past two decades at Sourcefour, I’ve seen both models work brilliantly – and I’ve also seen them fail spectacularly when they’re not the right fit. The truth is, there’s no one-size-fits-all answer, but understanding the pros and cons of each approach will help you make the right choice for your business.
The retainer route – building a strategic partnership
When you enter into a retainer arrangement, you’re essentially bringing an agency on as an extended part of your team. You pay a fixed monthly fee, and in return, you get dedicated time, attention, and expertise focused on your business.
The advantages are compelling.
First and foremost, you get predictable monthly costs with no nasty surprises. There’s nothing worse than budgeting for a £5,000 project only to receive a £8,500 invoice because of scope creep. With a retainer, you know exactly what you’re paying each month and the resources you are getting for that money.
More importantly, you become a priority client. When urgent requests come in – and they always do – retainer clients get immediate attention. Your agency partner isn’t juggling you against other paying projects; you’re already accounted for in their workload.
Perhaps the biggest advantage is the depth of understanding that develops over time. After working with you for months or years, your agency team becomes genuine experts in your business, your industry, and your customers. They start thinking like internal team members, offering proactive recommendations rather than just executing your requests. The strategic value of this partnership often delivers 25-40% better results than one-off projects.
You also get consistency – the same team working on your account who understand your brand voice, your preferences, and your goals. No more briefing new people every time you start a project.
But retainers aren’t perfect.
The biggest drawback is commitment. Most agencies require 12-month minimum contracts, which can feel daunting if you’re not sure about the partnership. There’s also less flexibility to pivot quickly if your needs change dramatically.
And yes, there’s typically a higher monthly investment compared to individual project costs. For smaller businesses or those with limited marketing needs, this can feel like paying for capacity you don’t fully utilise.
Pay-as-you-go – flexibility first
The project-based approach gives you maximum flexibility. Need a website redesign? Get quotes, pick an agency, and off you go. Finished with that project? No ongoing commitment.
The flexibility is genuine.
You can test different agencies for different types of work – perhaps one agency excels at web development while another is brilliant at brand strategy. You’re not locked into any long-term contracts, and if an agency disappoints, you simply don’t hire them again.
The lower initial risk is also appealing. A £5,000 website project feels much more manageable than committing to £3,000 per month for a year, even if the annual investment might be similar.
However, the downsides can be significant.
While individual project rates might seem lower, the total cost often ends up being much higher. You’re paying premium rates plus repeated setup costs every time you start with a new agency. There’s no economy of scale or relationship discount.
More problematically, you’re unlikely to get priority treatment. When urgent requests arise, agencies naturally prioritise their retainer clients who provide predictable monthly revenue. Your project gets fitted around their existing commitments.
The strategic impact suffers too. Project-based agencies may not invest time in deeply understanding your business because there’s no guarantee of future work. You get tactical execution rather than strategic partnership. Each project exists in isolation rather than building toward long-term goals.
Which approach suits your business?
Retainers work best when:
- You have ongoing marketing needs rather than sporadic projects
- You want to build a genuine strategic partnership
- Consistency and brand coherence are important to you
- You’re ready to commit to a long-term relationship
- You want predictable budgeting and priority treatment
Pay-as-you-go makes sense when:
- You have specific, one-off projects with clear endpoints
- Your marketing needs are irregular or seasonal
- You want to test different agencies before committing
- Budget flexibility is more important than relationship depth
- You prefer managing multiple specialist agencies
The hybrid approach
Increasingly, we’re seeing businesses adopt a hybrid model. They maintain a retainer relationship with one core agency for strategy, brand management, and ongoing needs, while engaging specialist agencies on a project basis for specific requirements.
For example, you might have a monthly retainer with your primary marketing agency for content creation, social media management, and strategic planning, while hiring a specialist e-commerce agency for a major website rebuild.
You can even have a hybrid approach with one agency – a monthly fee that covers core activities and additional project budgets for key campaigns and activities that are outside the ‘business as usual’ activities.
Making your decision
The choice between retainer and project-based arrangements isn’t really about which model is better – it’s about which model better serves your business needs right now.
If you’re a growing business with consistent marketing requirements and you’re ready to invest in a genuine strategic partnership, a retainer arrangement will almost certainly deliver better results and better value over time.
If you’re just starting out, have limited or irregular marketing needs, or want to test the waters with different agencies, project-based work gives you the flexibility to experiment and learn what works for your business.
The key is being honest about your needs, your budget, and your appetite for commitment. Both models can work brilliantly when they’re properly matched to your business situation.
At Sourcefour, we work with clients on both retainer and project-based arrangements. If you’re weighing up which approach might work best for your business, we’d be happy to have a no-obligation conversation about your specific needs and help you think through the best way forward.
