Converting Day Rates to Monthly Retainers: Keep It Simple

Recently in the Fractional Consultants Community slack, Francesca Spence asked:

“For those who price their services using a ‘retainer’ or ‘rolling monthly’ charge - how do you approach pricing vs the typical day rate? I’m slowly trying to shift towards the model, but find it tough to balance value for money vs expected time.” [shared with permission]

A monthly retainer in it’s most basic form is simple - think of it as a month rate instead of a day rate. You’re available to them for a month instead of for a day or for an hour. It doesn’t have to be any more complicated than that. You absolutely can price it as a month’s worth of days to get started.

Here’s the thing: you’re not an employee, so you’re not bound to their time and schedule. You weren’t on a day rate either, right?

Let’s ignore for a moment all of the “can you measure” arguments - most of the value that knowledge workers provide is not measurable, either to us or our buyers. We offer insurance - and while the insurance industry could probably figure out a way to price us, mostly we’re just making guesses. What really matters is that your client is happy with what they get.

So here’s what you do: build a structure/package for your offering, put a price on it, and see if someone buys.

Just keep in mind: cost is not price. Your hourly/day rate is cost (99% of the time) because you probably arrived at it using some fuzzy math around what you made as a salary, or how much you need to survive. Cost factors into price, but you also need profit factored into price.

The short answer? Figure out what your scope is, figure out a number that makes you happy to come into work for that client every day you plan to if you’d already been paid for the month, and there’s your starting point. Increase the price every time you sell it.

I provide advice and coaching for fractional professionals looking to build sustainable consulting practices.