Billing model split: retainer vs project fee, which side are you on?

Three years ago I ran a small web design shop out of Austin and swore by project fees. Last month a long term retainer client asked for a complete rebrand, and my old model would have left me eating 40 hours of strategy work for free. I moved to a hybrid setup where discovery is a flat fee and build is hourly. Now I see both sides clearly, retainers give steady cash flow but can breed scope creep, project fees reward efficiency but make you the bad guy when estimates slip. My partner in Dallas swears retainers are the only way to keep teams busy, while my friend in Seattle says project fees keep clients honest. I am curious, for those of you running agencies with more than 5 staff, what billing structure actually holds up when a client changes direction mid stream? Has anyone else hit that wall where a retainer turned into an endless revision cycle, or is that just my experience with one tough account?

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susanm2213d ago

That retainer turned nightmare sounds brutal, glad you found a middle ground.