When digital marketing agencies should raise their retainers

Key takeaways

• Raise prices when your costs or value increase, not just when you feel like it. Key triggers include rising team salaries, increased software costs, inflation, and when you deliver measurably better results for the client.
• A clear client communication plan is non-negotiable. Explain the 'why' behind the increase well in advance, focusing on the continued value and results they receive, not just your rising costs.
• Your pricing justification must be rooted in data. Use metrics like campaign performance improvements, increased workload scope, or industry benchmark reports to show the raise is fair and reflects enhanced service.
• Use a structured template for rate increase. A standardised email and talking points ensure consistency, professionalism, and reduce the emotional stress of having difficult conversations.
• Price increases are a sign of a healthy, growing agency. Regularly reviewing and adjusting retainers is essential to maintain profitability, reinvest in your team, and avoid client resentment from underpriced work.

What is a digital marketing agency retainer price increase strategy?

A digital marketing agency retainer price increase strategy is your planned approach to raising client fees. It's not a reactive, last-minute decision. It's a commercial process that decides when to increase prices, how much to raise them by, and how to communicate the change to protect the client relationship.

Think of it like a roadmap. It guides you from spotting the need for a price change to successfully implementing it. A good strategy turns a potentially awkward conversation into a professional business discussion.

For digital marketing agencies, this is especially important. Your main costs are people and software. When those costs go up, your prices must follow to keep your agency healthy. Without a strategy, you risk shrinking margins or losing good clients by handling the conversation poorly.

Why do most digital marketing agencies get price increases wrong?

Most agencies increase prices reactively, emotionally, or not at all. They wait until they're financially squeezed, then send a panicked email. Or they avoid the conversation for years, building resentment while working for outdated fees. This damages client trust and agency profitability.

A common mistake is tying the increase only to your internal costs. While rising salaries and software fees are valid reasons, leading with them frames the change as your problem. The client may wonder why they should pay more for the same service.

Another error is inconsistent timing. Raising prices for one client but not another on a similar retainer creates fairness issues. Without a clear digital marketing agency retainer price increase strategy, decisions feel arbitrary rather than professional.

Finally, poor communication sinks many increases. A short email with little notice and no context feels like a bill shock. It doesn't give the client time to budget or understand the value they're continuing to receive.

When should a digital marketing agency raise retainer prices?

Raise prices based on clear commercial triggers, not a hunch. The right time is when your costs to deliver the service have risen, or when the value you provide has significantly increased. This creates a fair and defensible reason for the change.

First, review your costs annually. If your team's salaries have increased, or your key software like CRM platforms or analytics tools has gone up in price, your margin is being squeezed. A price increase is needed to maintain your agency's profitability, which is typically targeted at 50-60% gross margin (the money left after paying your team).

Second, consider inflation. If general prices are rising by 3-5% a year, your agency's buying power decreases unless your income keeps pace. A modest annual adjustment can simply maintain your real-terms income.

Third, and most powerfully, raise prices when you deliver more value. Has the client's ad spend you manage doubled? Have you taken on extra reporting or strategy work outside the original scope? Have their results (leads, sales, traffic) improved dramatically under your management? This enhanced outcome is a strong foundation for your pricing justification.

Specialist accountants for digital marketing agencies often spot missed price increase opportunities during financial reviews, where retained earnings are low despite high revenue.

How do you build a client communication plan for a price increase?

A client communication plan prepares your client for the change and guides the conversation. Start the discussion 60-90 days before the new rate takes effect. This shows respect for their budgeting process and avoids surprises.

First, have a conversation, not just an email. Schedule a call or meeting framed as a "retainer review" or "planning session for next year". This sets a collaborative tone. Use this meeting to highlight the great work you've done and the results achieved.

Second, lead with value, not cost. Begin by recapping the successes and growth you've driven for their business. Then, explain how the service will evolve or needs to be sustained. Finally, introduce the new investment (your price) required to continue this level of performance.

Third, provide clear, written confirmation. After the meeting, send a follow-up email summarising the agreed new rate and effective date. This serves as a formal record and prevents misunderstandings. A robust client communication plan turns a potential conflict into a reaffirmation of your partnership.

What should be in your pricing justification to clients?

Your pricing justification is the evidence that supports your new rate. It must be client-centric, focusing on the benefits they receive. Strong justifications are built on data, not feelings.

Show performance improvements. Use your own reporting data. "Since we started, your website traffic has grown by 150%, and cost-per-lead has dropped by 30%. This new rate reflects the increased value and results we're now delivering." This ties the price directly to their business outcomes.

Detail expanded scope or effort. "Our monthly work now includes two additional performance reports and weekly optimisation calls, which were not in the original scope. The new retainer formalises this enhanced service level." This justifies the increase by showing more work is being done.

Reference industry standards. You can mention rising market rates for similar expertise, perhaps from a reputable industry survey. This indicates your new price is in line with the market, ensuring they continue to receive competitive service. A weak pricing justification creates pushback, while a strong one builds understanding.

What does a good template for rate increase look like?

A good template for rate increase is a pre-written email framework you adapt for each client. It ensures you cover all key points professionally and calmly. It removes the stress of drafting a new message from scratch for every difficult conversation.

The template should start with a positive subject line, like "Planning Ahead: Our Retainer for [Client Name]". Open by reaffirming the partnership and celebrating recent successes. This sets a constructive tone.

The middle section should clearly state the change. Specify the current retainer, the new proposed retainer, and the effective date (e.g., from the 1st of a future month). Then, immediately follow this with the 'why'. Bullet points work well here for your pricing justification.

Close by inviting discussion. "I'm available for a call next week to walk through this and answer any questions." This shows you're open and professional. Having a reliable template for rate increase makes the process systematic and less daunting for you and your team.

To understand how a price increase might affect your agency's financial position, try our Agency Profit Score — a free 5-minute assessment that reveals your financial health across profit visibility, revenue, cash flow, and more.

How much should a digital marketing agency raise prices by?

Increase prices by an amount that reflects the change in cost or value. Common increases range from 5% to 20%. The exact figure depends on your trigger. A standard annual adjustment for inflation might be 5-7%. A significant increase in scope or results could justify 15-20% or more.

Consider your client's situation. A long-standing, ideal client on a rate that's now far below market might need a larger, one-time correction to get back to fair value. A newer client where you've quickly driven massive growth might accept a higher increase based on those tangible results.

Also, think about your own margins. If your gross margin has fallen below 50% because costs have risen, calculate the increase needed to restore it to a healthy level. For example, if your team costs on a £5,000 retainer have risen from £2,500 to £3,000, you need to charge at least £6,000 to maintain a 50% margin.

Be prepared to explain the percentage or amount. Linking it back to your data-driven pricing justification makes the number feel reasoned, not random.

What if a client says no to a price increase?

If a client refuses, be prepared to walk away or re-scope the service. A 'no' is valuable information. It tells you the client does not value the service at the new price point. Your response should be professional and pre-planned.

First, seek to understand. Ask open questions. "Help me understand what's behind that decision." They may have budget constraints, or they may not perceive the value you think you're delivering. This feedback is crucial.

Second, consider offering options. Could you reduce the scope of service to match the old price? For example, remove a monthly report or reduce the number of campaign optimisations. This aligns price with delivered effort.

Third, be willing to end the engagement. If the client will not pay a fair rate for the work, and you cannot agree on a reduced scope, it is often better to part ways amicably. This frees up your team's time for clients who value your work appropriately. Losing an unprofitable client can actually improve your agency's overall health.

This is where a solid digital marketing agency retainer price increase strategy includes contingency planning, so you're not making emotional decisions in the moment.

How often should you review retainer pricing?

Formally review all retainer pricing at least once a year. This should be part of your agency's standard financial planning cycle. An annual review prevents prices from becoming dangerously outdated and makes increases a normal business practice, not a rare shock.

For newer clients (under 12 months), it's often best to wait until the anniversary of their contract. This gives you a full year of delivering value to build your case.

For long-term clients, consider a more frequent review if your costs are rising quickly. In periods of high inflation or rapid team salary growth, a mid-year review might be necessary to protect margins.

The review shouldn't be a secret. You can mention in initial client agreements that "retainer fees are reviewed annually in [Month]". This sets the right expectation from the start. Regular reviews are a hallmark of a professionally run agency.

What metrics prove you deserve a price increase?

The best metrics are those that directly impact the client's business. These are your most powerful tools for pricing justification. They move the conversation from what something costs to what it's worth.

Track performance improvements. Show year-on-year or quarter-on-quarter growth in key areas you influence: lead volume, cost per acquisition (CPA), return on ad spend (ROAS), organic traffic, or conversion rates. A dashboard showing consistent upward trends is compelling evidence.

Quantify increased workload. Log the time spent or the number of deliverables. If you're now creating 12 social ads per month instead of 8, or if strategy calls have increased from monthly to weekly, document this. More input often justifies more investment.

Benchmark against market rates. While this is a softer metric, reports from industry bodies can show that your expertise now commands a higher market rate. This proves you're offering competitive value. Concrete metrics turn a request into a reasoned proposal.

For insights on how leading agencies use data, our free financial health scorecard gives you a personalised breakdown of where your agency stands on performance, pipeline strength, and operational efficiency.

How do you implement a price increase across your whole client base?

Implement increases strategically, not all at once. Stagger them throughout the year based on each client's contract anniversary. This smooths out your cash flow and gives your team capacity to manage the conversations properly.

Start with your easiest, most understanding clients. Use these as practice for your communication plan and template. The positive responses will build your confidence for trickier discussions.

Categorise your clients. Group A might be ideal partners who get a standard increase with full justification. Group B might be lower-value, more demanding clients where you propose a higher increase or are prepared to part ways if they refuse.

Track everything. Use a simple spreadsheet to note the client, old rate, proposed new rate, communication date, response, and outcome. This gives you a clear picture of your agency's financial upgrade and helps you refine your digital marketing agency retainer price increase strategy over time.

Getting this right is a major commercial lever. If you want to understand how pricing strategy impacts your overall financial health, start with our Agency Profit Score — answer 20 quick questions and get a detailed report on your agency's financial performance.