Project work gets a bad rap in the agency world, with many believing the retainer revenue represents a superior business model.
The reality is that both have their time and place. In fact, sometimes project work is actually the better approach.
I’ll explain more a bit later in this week’s newsletter, but first let’s take a look at what Jen has rounded up for us this week.
— Chip Griffin, SAGA Founder
Weekly Roundup
Below are some articles, blog posts, podcasts, and videos that we came across during the past week or so that provide useful perspective and information for PR and marketing agency owners. While we don’t necessarily endorse all of the views expressed in these links, we think they are worth your time.
— Jen Griffin, SAGA Community Manager
Latest from SAGA
- Agency owners review 2024 performance, assess outlook (Agency Leadership Podcast)
- Helping PR agency clients navigate a challenging communications climate (featuring Rachel Sales) (Chats with Chip)
Articles & Blog Posts
- Managing Risk and Building Trust in a New Business Pitch (The Sutter Company)
- Challenging but Signs of a Turn (RSW/US)
- How to limit the growth of your firm in one step (Anchor Advisors)
- Timekeeping is a Useful, But Temporary, Evil (Punctuation)
Podcast Episodes
- Why Your PESO Model© Program Isn’t Working (Spin Sucks)
- National Days and Awareness Months and How to Manage in 2025 (That Solo Life)
- Should You Entertain That Acquisition Offer? (2Bobs)
- How to Downsize Your Agency, with Carson Pierce (The Agency Profit Podcast)
- Navigating Agency Trends with Lee McKnight (Build a Better Agency)
- Leaders in the Line of Fear (Working/Broken)
- The Art of Content Chemistry With Andy Crestodina (The Marketing Agency Leadership Podcast)
Videos
- Specialists vs Generalists? Round One. FIGHT! (Bureau of Digital)
AI in focus
- PR Is Evolving With AI – And That’s a Good Thing (Spin Sucks)
- What Agencies Winning With AI Are Doing Differently (Bureau of Digital)
- AI Transforms Content from Passive to Interactive (For Immediate Release)
- The AI Advantage, with Mike Todasco (The Innovative Agency)
Stop avoiding project work for your agency
There’s an undeniable appeal to having retainer work that you invoice in consistent amounts every month. It feels predictable and stable.
That comfort gets magnified when you sign annual contracts with clients.
But the reality is that retainer revenue isn’t nearly as safe and reliable as many owners think.
First, many agencies have “annual” contracts that have 30, 60, or 90 day cancellation clauses. That means you really have a 30, 60, or 90 day contract (just with the added risk of requiring a fresh signature from the client every 12 months).
Second, when a client wants to break an actual annual contract — or even shorten the cancellation period — the agency often has much less leverage than they want to believe. Sure, they could take the client to court, but that rarely makes good business or financial sense.
These dynamics often lead to overservicing in an attempt to keep retainer clients longer (see my piece earlier this year about the Bell Curve of Profitability for more on that topic).
With that context, it’s easy to see why project work makes sense as at least a meaningful portion of your agency’s revenue portfolio.
It’s easier to manage the profitability of projects and the engagements tend to have a shorter sales cycle.
Even better, project work enables your agency to experiment with new service offerings, pricing models, or positioning strategies without the same level of risk that comes with attempting to secure comparable retainer agreements.
It turns out that a lot of agencies do recognize the importance of project work. The latest SAGA Agency Owner Survey found that more than half of agencies generated at least 25% of their 2024 revenue from projects.
With the economic uncertainty swirling around us now, it makes more sense than ever to be considering the use of project work to test new ideas, de-risk engagements for new clients, and blaze a path through the chaos.
So before you listen to some guru extolling the magic of retainers and decide that you need to focus on that as your ticket to success, remember that most successful agencies have a healthy mix of both types of revenue.
