Agency Models: Retainer vs. Project-Based for Digital Product Development

A workshop at the Komodo studio. There are post it notes on the table and one of the designers is sketching wireframes on a whiteboard
A workshop at the Komodo studio. There are post it notes on the table and one of the designers is sketching wireframes on a whiteboard
A workshop at the Komodo studio. There are post it notes on the table and one of the designers is sketching wireframes on a whiteboard

When you work with an agency to develop a digital product, you will be faced with the decision between a project-based model or a retainer agreement.

You may already have an idea about how you want to work with your agency and what you expect them to deliver, but before you sign on the dotted line, take a minute to read this article to determine how to get the most out of your digital agency partner to meet your commercial goals.

What is a project-based model?

The project-based agency model is when you appoint an agency to deliver a set project with a one-off fee. Typically, you will outline the exact requirements of the project and the agency will deliver a clear project plan with the aim of meeting a clear deadline.

The project-based model does not account for any significant changes to the brief, therefore its success relies on a very clear and unambiguous plan before writing the first line of code.

What is a retainer model?

A retainer model is an ongoing relationship with an agency, typically billed monthly, whereby the agency will work towards your goals through a series of sprints and deliverables. While your retainer is set up to meet your initial needs, it is flexible to your requirements. So, if you find that a new project requires additional dev time or you want to carry out a period of testing on another product, your digital agency will account for this in your retainer and bill accordingly.

Unlike the project-based model, a retainer relationship is guided by the initial brief - but not restricted by it. Developing a digital product to solve a user’s problem is not always as simple as identifying the needs and creating something that meets them, often the discovery and testing phases will unveil new areas of exploration to elevate your product’s offering.

Project vs. Retainer: which is best for me?

To answer that question, we’ve got to go back to the problem that sparked the appointment of your digital agency in the first place. You bring an agency on board to provide something that your company lacks: whether that’s expertise, knowledge, tools, strategy, time or a combination of all five.

On a project model, you make a choice based on your needs in the moment. Do you need a certain skill set to deliver a specific project? Or do you have a lack of resource in a key area? An agency working on a project model will identify the services required, price according to the initial brief, deliver the services and move on.

When you choose to work with an agency on a retainer model, they become an extension of your team, as they work alongside you and your colleagues on shared goals.

Pricing an agency relationship

Agency models aren’t the only thing that is evolving, payment models are too. There are many ways to price a retainer model, depending on the services provided and the desired outcome. Your digital marketing agency is not delivering the same outcome as your software development agency, so why are you still being billed on a simple hour or day rate?

Your agency relationships should be built upon outputs, not inputs - and that’s where the retainer model really comes into its own.

A retainer model with clear outputs is an effective one. Your digital agency should be able to provide a clear list of deliverables each month, which incrementally contribute towards achieving your goals. A project-based model is also built upon a clear structure but it does not take into account the potential for growth, scaling or the impact of technical debt and other problems that might occur.

The future of agency relationships

When choosing between a project and retainer relationship with your digital agency, don’t just consider your current circumstances. Assess your mid and long term plans and identify areas in which the agency could provide support and expertise.

Onboarding a new agency each time you kick off a project will be both timely and costly to your business, and you can’t rely on your favourite agency to always be available to take on the next project without a retainer agreement. These are all factors to consider when establishing your agency relationships.

Getting the most from your agency

When working with a software agency to develop your product, you can access some of the industry’s leading professionals, cutting-edge tools and intuitive minds that love nothing more than solving big problems. To ensure you get the most out of your agency relationship, choose a digital agency that values your partnership and shares your goals.

At KOMODO, we pioneer the co-creation model. When you co-create with KOMODO, you benefit from the traditional resources and skills that an agency can provide alongside the agility, strategy and guidance of expert digital consultants.

Co-creation is a very involved way of working. Unlike the traditional retainer model, we don’t simply aim to hit the same targets every month, and we never become complacent. Co-creation is an intuitive and iterative approach to learning, from identifying problems to understanding processes and determining goals, we are by your side for the whole journey.

Got an idea? Let us know.

Discover how Komodo Digital can turn your concept into reality. Contact us today to explore the possibilities and unleash the potential of your idea.

Sign up to our newsletter

Be the first to hear about our events, industry insights and what’s going on at Komodo. We promise we’ll respect your inbox and only send you stuff we’d actually read ourselves.