A retainer is a fixed amount of monthly income that a client pays the agency, similar to a consistent paycheck. The benefits of this are great - namely that you know how much money is coming on a consistent basis. Additionally, the Statement of Work can be more flexible, so long as the client is happy. Long term relationships and maintenance style projects work great on retainer.
The downsides however are similar to that of an employer/employee relationship. The client can tend to ask for more than they're paying for. Because you don;t want to lose the relationship, it's easy to give them extra.
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