A Better Business Model For Creatives And Their Clients

It’s a funny balance, marketing a small organization.

You need to get the word out about it, but you want to keep your costs down.

You want to represent yourself and your organization in a professional manner, but you don’t have time to run your business AND try to carry out all the various aspects of marketing.

So, it looks like you’re going to need some help in this area.

This leaves you with two options.

The Lesser of Two Evils

You can either hire a full-time marketing person or bring in a freelancer when you need them. There are pros and cons to both.

Hire A Full-time Marketing Person

Hiring a full-time marketing person is a nice option if:

  1. You can afford to hire a full-time employee who only does marketing, and
  2. You have enough consistent work to justify keeping them in the office full time.

For most small businesses (meaning groups of five or fewer) there are higher priorities – say, an administrative assistant for the boss or a bookkeeper (I recommend both). If you are going to pay payroll taxes for someone, they better be high value.

Plus, your marketing probably doesn’t change all that often, so if you did hire a full-time marketing person, you would have to find ways to keep them busy to justify keeping them on payroll. Often, this includes non-creative tasks like filing, cleaning, and answering the phone. Some skilled creatives are OK with that; others are divas who don’t even like to take out their own garbage (By the way, that suggests a great interview question for hiring creatives – it weeds out the divas).

Specialty is another important consideration. Do you need a writer or a graphic designer more? It’s difficult to find one person who does both really well, so how do you decide which skill is more important? Can you afford to choose?

When you work with someone five days a week, you experience the ups and downs of business together, you get deeply immersed in the culture and the products or services. You learn how the leadership thinks and what gives the organization their unique selling position. In short, you become part of the soul of the organization. If you’re writing marketing materials for an organization, it’s nice to have that kind of inside scoop.

Contract A Freelancer

On the other hand, when you bring in a freelancer, you get outside the “group think” of the organization; a fresh pair of eyes can shed light on the strengths and weaknesses of an organization to which insiders can become blind.

Freelancers are often (not always) highly-skilled in their craft and can take a campaign to a higher level than someone inside the organization who has to wear many hats.

Contracting freelancers solves the payroll problem. Write up a 1099 and call it a day. You can kiss the Affordable Care Act goodbye.

Yes, the rates are typically higher per hour, but that cost is offset by the elimination of payroll taxes and comes in short bursts, not a sustained expense over years.

But by the same token, the seasonal nature of marketing campaigns means your budget goes through peaks and valleys that are difficult to plan for.

Plus, contracting in outsiders makes it hard to build consistency in your branding. Different designers bring different aesthetics to your materials. Changing writers means changing personalities, even if it is in subtle ways. In that regard, it’s advantageous to have your marketing materials written by someone “in the family.”

A Better Idea, From An Unexpected Place

As I’ve been working with my clients, I’ve come upon a better way to balance the expense of hiring versus the inconsistency of contracting.

I found it while dealing with my attorney.

My attorney is a whiz-kid (yes, he’s younger than I am), full of energy and smarter than I could ever hope to be. He does fantastic work and has saved me a bunch of money. Some months, he’s head-down-sleeves-up working on my case; some months, he doesn’t do anything for my case. Every month, I pay his retainer and enjoy the steady, predictability of his invoice. Because I know what it would do to my budget if he billed me by the hours he actually works.

Why couldn’t that work for creatives?

Consider this: with a monthly retainer, you can count on a flat, predictable, fixed expense in your marketing category, no matter how much the workload varies. You don’t pay the payroll taxes or healthcare.

The retainer system allows a company to form a long-term relationship with a creative, so they can build a consistent, stable, long-term brand strategy. The company gets their marketing done by someone who is deeply familiar with the soul of the company, a predictable expense, and brand continuity. The creative gets a steady, predictable paycheck, but is still free to offer their services to other organizations, so they aren’t wasting their time on busy work.

While freelancers enjoy a certain amount of freedom from non-creative busy work, they are responsible for keeping themselves busy, and often ride an income roller coaster from month to month. Whether you’re a graphic designer, a copywriter, or an After Effects wizard, some months are just better than others – and it makes us want to tear our hair out. The retainer system allows us to manage our time and income better. that stability allows us to focus on creating a better product and providing better service.

The Market Is Already Going This Way

The trend toward outsourcing more skill positions to freelancers is well-documentedhere, here, here, and here. The 2008 market downturn and the rise of the Affordable Care Act left companies of all sizes searching for ways to minimize their human resource overhead, creating an environment that made freelancers particularly attractive to employers. By 2016, it is estimated that as much as forty percent of the workforce will be made up of independent contractors, with all the pros and cons included therein.

Now, as creatives, the onus is on us to be professional in our work, diligent in our time management, and reasonable in our fees. The point is to average out costs over time. So, it’s true that during busy months your hours are worth less than during quiet months, but the overall income averages out and is easier to manage.

One Other Benefit

In an industry that is accustomed to doing projects on a one-off basis, the retainer model opens up an additional opportunity for creative-client relations, taken from the affiliate marketing world.

In the affiliate world, each customer establishes an on-going, monthly contract with the distributor, where the customer automatically receives more of the product each month and the distributor charges their credit card automatically (this is especially true in the case of consumable products like vitamins or cosmetics). If I, as a customer, bring in a new customer, I get a discount on my product purchases – let’s say it’s 10% off each time I bring in someone new. If I bring in ten new clients, I am essentially getting my product for free, because the 10% discount for referrals is applied for each new contract. The company isn’t making their $100 per month from me, but I brought them ten new people, so they are making $1,000 because of me. Plus, my loyalty is saving me money.

Why couldn’t we offer our clients the same benefit? If a client refers me to their friend and the friend signs a new retainer contract with me, wouldn’t it be appropriate to offer a finder’s discount to the referring client?

For example, Jim signs a retainer contract worth $500 per month, and then introduces me to Brian, who also signs a contract worth $500 a month. I would offer Jim $100 off his next month, or maybe $50 off each month going forward. If Brian were to introduce me to Steve and Steve signed a $2,000 contract, I could offer him $200 of his next month or $75 per month for the rest of the contract. There’s no set percentage; you can set the numbers however it makes sense for your business. You obviously don’t want to lose money on the deal, but you can kindly reward a good client for a great referral. It gives the client an incentive to promote your business to his colleagues, which could be enormously lucrative (especially if he is well-connected).

Everybody wins.

You can’t do that when you’re being paid by the project (unless you some kind of commitment for future projects).

What About You?

Have you seen this work? Which side of the freelance relationship were you on, and what were the pros and cons you observed? Obviously, there is much more to be said about this. Share your comments.

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