A retainer trades certainty for both sides: the client gets reserved capacity and a predictable bill, the agency gets predictable revenue. The deliverables are usually defined by hours, capacity (a team is available), or scope (a fixed package of work each cycle).
For agencies, retainers are the difference between feast-and-famine and a forecastable business. They smooth utilisation, make hiring decisions less terrifying, and compound trust with clients who keep working with the same team. The trade-off is they invite scope creep harder than any project does.
Choose the retainer model deliberately. Hours-based retainers are easy to sell and hard to manage (every month is a negotiation about rollover). Capacity retainers protect the agency but require disciplined prioritisation. Outcome-based retainers (you pay us X for the result, not the inputs) are the most defensible but require the agency to actually own the outcome.