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What we're seeing in the market
May has been a busy month. I've spent the last few weeks deep in conversations with agency founders across the UK and US: some scaling hard, some worried, most somewhere in between.
But one topic kept repeating itself this month.
Retainers.
Not the loss of them, but the slow erosion. A £12k becomes £9k. A long-standing client asks for a ‘temporary adjustment.’
It seems your line item was the easiest one to cut.
Most founders I speak to blame the market. But I don't think that's it.
Because clients haven't stopped spending.
Two things are happening:
1. CFOs are asking harder questions.
2. Many agencies have become so fixated on the delivery of the work and efficiency, that the nuances of relationship building have fallen by the wayside.
The difficulty is that vague scopes don't have good answers for CFOs, or keep your team focused.
It makes the retainer fuzzy. And eventually, fuzzy gets cut.
So here's what I've been telling them.
Across 150+ agency scale-to-sale journeys, the agencies still growing right now aren't doing anything radical.
They've just made the value exchange undeniable.
Three models are doing the heavy lifting:
1. Productised engagements
Stop selling hours. Sell a named deliverable with a fixed output and a fixed price.
Buyers purchase a thing. And what's more, agencies with a differentiated methodology are hitting 49% gross profit; well above industry average.
When what you’re selling is clear, easy to pull-off the shelf and is well targeted to your Ideal Client’s needs, several things happen.
Scope creep dies, delivery becomes repeatable, and you can bring in talent without quality dropping.
That's how a delivery shop becomes a sellable asset.
2. Outcome based pricing
Tie the contract to a number the client actually cares about: lead volume, pipeline value, revenue.
A lower base plus a performance kicker protects your cash flow while giving the client skin in the game.
The conversation shifts from are they worth the retainer?
To: here’s what we delivered last quarter.
It also helps to keep your team aligned with what really matters to the client. This strengthens the relationship and pulls them away from reporting actions and towards a focus on results.
Results that are meaningful to different stakeholders within the business help to give you longevity and justify your retainer.
68% of agencies using performance pricing expect 26%+ revenue growth this year, versus 40% on traditional models. No brainer.
3. Equity style partnerships
For the right clients, stop being a vendor entirely.
Sweat equity in a scale-up instead of a monthly fee.
It removes the ‘are we getting our money's worth?’ tension because you're now on the same side of the table.
Minority stakes, back-office systems, AI infrastructure, and growth capital plugged in with the founder keeping full operational control. Plus the individual agency value goes up, because structural risk comes down.
Why this matters more than most founders realise
Traditional retainer shops of 1m EBITDA are trading at a 4-6x multiplier right now.
Agencies that have rebuilt into productised, outcome-driven, or tech-enabled models? 8-10x.
On a £1m EBITDA business, that's the difference between an £4-6m exit and an £8-10m+ exit.
Same agency. Different commercial models.
£3m difference at the finish line.
The window to make that shift before you need to isn't permanently open.
Buyers are getting more sophisticated about how they read revenue quality.
A retainer with no defined outcome attached is starting to look like a liability rather than an asset.
Most founders only find that out when it's too late to do anything about it.
A question for you
Look at your top 5 retainers.
For each one, can you point to a specific outcome the client is paying for this quarter?
If yes, you have a contract.
If the answer is "they get our team, our thinking, our time" you have a relationship that's about to get renegotiated.
And when that call comes, you won't have much leverage.
The agencies winning changed the model before the client asked them to.
Need a hand getting your business in shape?
Hear about how we’re collaborating, straight from the founders in the collective.
This month across the Unusual Collective
One of our partners is up 38% across two quarters. Impressive stuff, right?
If you want to see how your positioning holds up, score it here in under 5 minutes.
And if you want a founder to founder conversation about the gap between where you are and where you need to be - just reply to this email and we’ll carve out some time.
Here are a couple of things I think are worth a read:
Until next time,
Luke
CEO & Founder of Unusual Group
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