REW Moving To Retainer Model For 2019 Professional Services
by Morgan Carey
on Sunday, November 25th, 2018 at 10:29am.
If there is one thing that I have learned in providing professional services these last 20 years, it's that setting expectations is everything.
If you do it right, your customers will hopefully appreciate and respect you. Even if they don’t like what they hear, they tend to appreciate the transparency and honesty.
If you don’t do it, or you get it wrong, your customers will be frustrated and upset.
Today, I’d like to talk about the future of Real Estate Webmasters' Professional Services agency, and make an attempt to set expectations for the coming 2019 calendar year.
My goal is to provide insight into changes and goals for our business, and assist customers in making choices with respect to how they engage with our Professional Services agency.
So here goes:
The first point: We’re going to be sold out.
In the past, for some reason, I have always tried to avoid this statement and tried to find a way to accommodate everything and everyone. I suppose it was because I hate turning away new business or giving people bad news.
But it’s a fact: we’re going to be sold out.
Currently (mid-November) we are already completely sold out (meaning we cannot take a single new Professional Services order) through the month of January and halfway into February. We are a full 3 months sold out.
This is likely going to be the norm moving forward, and in fact, depending on demand for Retainer hours, it is entirely possible for us to sell out our entire year in the next few months.
So if you are reading this and have work you want to get done in 2019, please speak to your account manager ASAP.
The second point: We have accepted that this won’t change in 2019
During our strategic planning sessions, we have created our hiring plan for the year. It calls for the addition of 10,000 hours to existing 50,000 hours of capacity for 2019.
We have determined that this is all the staff that we can handle onboarding responsibly, taking into account all other priorities for the business (which include an even greater investment in R&D, infrastructure, and support services).
So we have 60,000 hours to sell, and that’s it.
Based on current trends for demand and upcoming projects, we are forecasting that we will in fact completely sell out these hours, and demand will continue to outpace supply. There simply will be a waiting list.
We need to stop apologizing for it and start talking about how to work with our customers to get further ahead of their projects and plan/execute in a more deliberate manner.
The third point: We are going to have to say no to business
Not everyone is willing to wait in order to get work done. A common offer is "if you can get me into the queue earlier, I will do the project." To this we must say no.
Through our Retainer program, our amazing customers are booking their entire year in advance (through monthly time slots).
We will not bump existing loyal customers for new ones, even if it costs us the account. We must take care of our existing customers first. They are who got us here, and if they need all of our time, then we give them our time.
The fourth point: Some orders don’t make sense
We have evaluated the orders that come through, and have determined that not all orders are good for our business. In fact some are not profitable at all.
Generally, these are discounted orders or orders of an extremely small nature (such as one- or two-hour orders).
We are going to adopt a new policy of a minimum 10-hour order for new work orders. Anything less, and it is actually a detriment to our business. This is a shift from the past, as our previous minimum order was 1 hour.
For our customer, this means that instead of ordering many small things on a whim over the course of a year (which generally add up to more than 10 hours anyways), we will ask our customers to save their requests until they have enough to satisfy the minimum order, or we can’t take the request.
We will still take smaller orders to "support" existing custom work for existing customers (bug fixes, adjustments, etc.) but net new projects must be a minimum 10 hours.
The final point: Most of our business is going to be Retainer based
As most customers know, REW runs a program called the "Retainer" program whereby you purchase your "spot" in the schedule in advance. Through Retainer, you can basically request anything you want of design and programming during that time, as long as you have your order placed "in advance" of the month that work is booked.
It’s a great program for our business and it’s a great program for our customers.
Today, the majority of work is already booked as Retainer, and this is something we are going to move further towards in 2019.
I’ve put together some information as to why this is good for both sides, starting with the customer benefits.
Why it’s good for our customers
Priority access: As our customers are agreeing in advance to the work (they have paid to save their spot well in advance), we make our Retainer program our priority. This means Retainer work is prioritized over one-off or project-based work.
Project consulting: Often times, customers have complex ideas that they haven’t fully realized. In a perfect world, they would be able to speak directly to a programmer, project manager, designer, etc. to determine if such ideas are possible, and to get feedback and understand the scope/magnitude of the potential project. With Retainer, you can use your booked time to discuss your options and get feedback at a far more detailed level than an account manager can accomplish. This can really help when it comes to making decisions on large projects—especially when more than one project is being considered.
Predictable/reliable access: Booking your Retainer well in advance means that you can plan your projects ahead of time, and have the peace of mind that the labour required to execute on the projects will be available. If your needs are greater than your available Retainer, you can identify this ahead of time with your team, and often times have your retainer adjusted to accommodate planned workloads. Of course during times of sellout (like right now), we cannot accommodate additional time requests.
No detailed estimate delays: Estimates at Real Estate Webmasters can often take quite a long time, as it is the same team that does the work on projects that does the estimating. At REW, we prioritize sold work and delivery over estimating new work, which mean long wait times just to get work estimated, or in times of complete sellout (which is often including right now) you cannot get a detailed estimate at all.
Flexibility/Agile Process: By their nature, Retainers are flexible. This is because you are committing to staff who can do almost anything, as opposed to committing to a specific project which is limited by scope. This allows customers to re-prioritize their needs as much and as often as they like, meaning they are never "locked in" to a specific scope, and their team will never say no to working on anything they ask, as long as it is something that team is capable of. You have complete flexibility. For that time, they are your team. Ask anything you wish of them. This is especially helpful when new/ unplanned priorities emerge, or when a previous custom item breaks.
Custom maintenance: As for my last point, as all REW customers are aware, all work on "custom items" is billable to their account. This includes maintenance that may be required in the future. For example, browsers/technology can change, new phones come out, or integrations can require updates. Any time a custom item breaks or needs updating, the customers must book custom work. Often times, these items can be quite important to that specific customer to get updated, and are often stated as urgent, or an emergency. Without pre-booked time however, REW is unable to prioritize said items as we are most likely sold out and it would not be fair to bump existing customers who have already been waiting in a queue or pre-booked their work to accommodate another customer's request. So if you want the ability for us to be there immediately if an issue with custom work arises, you must have time already on the schedule in order to do so.
Why it’s good for Real Estate Webmasters
Staffing: Because Retainers are contracted well in advance, it allows us to see well into the future and get ahead of the staffing needs for our Professional services groups.
Amazing programmers, designers, project managers and quality assurance specialists are hard to find, and it takes time to train them to be of maximum benefit to our customers. As such, when we know we have the work coming guaranteed, it means we can make hiring decisions quicker and with more certainty.
Less waste: Project-based custom work has a lot of time and waste associated with it. It takes a long list of resources (Account management, Technical Sales Experts, Sales Managers, Finance, Estimates, etc.) just to get a project considered by a customer, let alone approved. Post acceptance, there are also resources required to get the projects created, queued, and have that queue managed.
In summary, the whole thing costs a lot of man hours (and money) to deliver and is a less-than-ideal experience for both REW and our customer.
Investment: Again, because Retainers are guaranteed revenue for REW into the future, having a fully booked Retainer program means we can also invest with confidence in additional product development, R&D, platform/infrastructure, and support programs that will make Real Estate Webmasters even better for all customers.
The future of custom agency at Real Estate Webmasters Inc.
Because of the many advantages to both clients and our company, it is our goal to transition nearly all custom work to the Retainer model. This means that our account managers will be reaching out much earlier in the process to discuss your future needs (instead of today’s needs) so that we can forecast the time, and get you on the schedule for when the time comes to get the work done.
Although this is the norm for most large customers, we realize that Retainer is new for others, and this will require a shift in expectation and process. We’re here to help explain that shift for you, and help you adjust to this process.
I’m happy to answer any questions for customers on our Facebook group and of course I encourage you to reach out to your account manager as well.