With a retainer, it can be financial suicide to allow it to expand beyond the limits of the three variables cited earlier. When the client does this, either inadvertently or advertently, it’s known as “scope creep.” When you do it by accident or out of guilt, it’s called “scope seep” (a term I coined several years ago when I found consultants doing things that no one at all had ever asked them to do).
A retainer is a “fixed-fee” project with compensation rendered in consideration for access to your intelligence and judgment, but anything that enlarges its scope or size is a direct diminution of your bottom line. You must resist this at all costs.
Glossary
Scope creep: A project expanding and requiring more labor, beyond the original parameters set in the conceptual agreement and in the proposal, because the consultant is unable to deny a buyer (or even non buyer) who is requesting additional work. Generally based on feelings of inferiority.
Scope seep: Like scope creep, except initiated by the consultant out of guilt, lack of self-esteem, and other factors prompting the consultant to prove that he or she is “over delivering.” Generally based on feelings of inadequacy.
Ironically, scope seep is the worst and more frequent hazard. It usually occurs when the consultant feels that he or she has not been accessed “enough” by the client to justify the fee. So the consultant unilaterally offers one or more of the following additions:
- Extend the retainer beyond the current date at no additional fee.
- “Roll over” unused months to the future, sort of like cell phone roll-over minutes.
- Call and write the client offering unsolicited help and opinion.
- Ask for meetings.
This happens all the time, invariably from consultants who feel that they’re not worth anything if not being used and not being used frequently, at that. There is nothing incumbent on you to proactively offer help, because the very nature of your retainer is reactive and in response to client request. The client is paying for the comfort of knowing that you’re there if needed, not to need you every day. A great deal of this is poor business judgment, but some of it is also ego need—wanting to be wanted, which I’ll call the “Brenda Lee Plea,” trusting that a few of you will get that.
Scope creep can arise from any level of the organization, not just your buyer. When I worked with Hewlett-Packard employees, they were very concerned about “undocumented promises.” They would sign a $2 million contract with a client, and assign a large team to implement it. But during the implementation, lower level client people would ask lower level HP people for additional help, “while you’re here.” The HP people didn’t want to cause offense, so they tried to fulfill all such work or promised to do so. These “undocumented promises” wound up eroding the margins significantly because so much more time and delay were entailed.
The resolution was to simply provide this script to HP people: “Unfortunately, I’m not able to make any changes to work agreements, but I’ll be happy to give this to my manager today for a decision.” That drove the decision to people at HP who could comfortably say no (or evaluate whether some of these requests were actually important to the project implementation).
You are your own boss, assumedly, so referring this to the proper authorities shouldn’t take long!
Don’t allow “guilt” about not being used and having that money “in your pocket” drive you to scope seep. The buyer is an adult, and realizes that you’re there to be accessed when he or she deems it necessary. However, not being called is not the same as not being appreciated. If you want unconditional love, get a dog. Otherwise don’t seek pats on your head from your clients.
It is fine to suggest regular “check-in” contacts. These might occur:
- Prior to important buyer meetings with colleagues.
- At designated times (e.g., every second Monday morning).
- When certain events occur (e.g., monthly sales figures).
Although we’ve been discussing retainers as an evolution from successful project work, they can arise as the original interaction with a client, particularly if you have strong intellectual property, a commercially published book, a powerful referral from a peer, and so on.
Retainers seldom run for more than a year, often because of internal restrictions but more often because it’s hard to make such long-term commitments. Let’s turn, then, to how to ensure that retainers are renewed.
Case Study: The Bank “Project”
I was introduced to a buyer at a large New York bank by a woman who worked for him, whom he trusted, and who had been impressed by some of my published work. We met in his office, where he had stressed that he only had 45 minutes before an important meeting.
At the 30-minute mark, I realized that we were having a great conversation, but there was nothing he apparently needed that I could supply, even though we agreed on many ideas and he was receptive to my “push back” on some of their practices. As I watched the clock tick down to the end of the meeting, I was stunned that I couldn’t come up with a next step.
Then he said, “I’m sorry, I have to run. But this was great. Call me on Monday and we’ll work something out for you.”
I was speechless. “Ah, work something out? Like what?”
“Oh, I don’t know, some kind of retainer where we can call on you. I’m not sure at the moment, but I do know we need more smart people around here, and access to your smarts makes sense.”
This is why I insist that you meet solely with true, economic buyers. They can do these things.