Three Tips for Optimizing Your Recurring Revenue Strategy
At this point, you should have plenty of ideas on how to add new recurring revenue streams to your business. Here's how to offer these services to your clients and make the most of these revenue streams
The last thing you want to do is get into a disagreement with a client about the details of a retainer or other monthly contracts. That's why you want to be sure your arrangements are precise. This means you should define any term where this is a potential for different interpretations. For example, if your contract says you'll provide "minor" fixes and tweaks as part of the retainer, then you need to define precisely what you mean by "minor." Provide specific, clear examples (e.g., "minor fixes include tasks such as changing the header graphic") along with time limits (e.g., "tasks that take no longer than 30 minutes to complete") and restrictions on the number of fixes allowable.
What do I mean by this? A lot of web developers make the mistake of selling hours (e.g., 10 hours of work on a monthly retainer). But the problem is, selling hours limits your profits. As you and your team get faster at providing certain services, you'll end up doing MORE work each month for clients, but making the same amount of money. Here's what you do instead: sell your clients on the value of what you're providing.
If you can show your clients how a specific service will add to their bottom line, then they're not going to concern themselves with how many hours it takes you to perform the task. They're not going to feel "ripped off" just because you show a service quickly.
For example, if you can demonstrate that some $200 monthly service produces $1000 in revenue, the client is not going to care if it takes you 30 seconds, 30 minutes, or three days to perform the task. So, remove time from the formula and focus on the value you're providing.
Once you fall into the regular rhythm of providing monthly services, it's easy for you to start losing your enthusiasm for ongoing client projects. You must maintain your energy, offer a high level of service every month, and prove to your clients over and over again why they're paying you every month. If you can show your worth, then you can bet your clients will renew their contracts when the time comes.
The simple truth is that if you haven't installed recurring revenue streams into your business, then you're probably hustling way too hard for too little money. Increase your revenue and reduce your stress by employing the tips and strategies you just learned about.
No matter where your agency is today, we all had to start somewhere.