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Ultimate guide to monthly recurring revenue for agencies
Running a web agency can be stressful, especially if you don’t have recurring revenue streams in place.
Without recurring revenue, you’re constantly having to find new clients to keep the money flowing into your business. Some months it can feel like you’re constantly hustling, but not meeting or getting ahead of your revenue goals. It’s exhausting!
Here’s the solution — recurring revenue.
As the name suggests, recurring income recurs on a regular basis (such as monthly). It’s predictable. Even if you don’t land a single new client during some particular time period, you’ll still have recurring revenue flowing in due to your client contracts and commitments.
Recurring revenue is what turns your business into a true business with assets, rather than a “job” where you exchange time for dollars.
I wish I had focused on growing my recurring revenue earlier on in my agency journey. I've added 2 multi 6 figure monthly recurring revenue (MRR) streams to our agency in the last 18 months. It's not been easy but predictable revenue month to month is a game changer for our business!
I've taken my years of experience and strategies we've leveraged, and turned it into this in-depth guide on recurring revenue for agencies.
The best part?
All of the information and strategies listed can be implemented into your agency, to help grow your agency recurring revenue.
So if you want to learn how to add recurring revenue into your agency, check out this guide below.
Table of Contents
Yes, you should be looking for new clients all the time in order to grow your business. But you should also be developing recurring revenue streams, by getting your existing clients to purchase services from you on a regular basis.
Here’s 5 great reasons why…
Five reasons why you should implement recurring revenue
I mentioned a few good reasons above as to why you should be looking to create recurring revenue in your business. Here are five more reasons why we do it…
Boosts your company’s valuation
As mentioned, recurring revenue turns your business into an asset. Have you ever wondered what your business is worth? What would someone pay to buy your business? If you have recurring revenue strategies in place, your business becomes more appealing when you decide to sell. It also makes it easier for you to exit your business with a higher valuation ensuring you get the best offer for all the effort and time you’ve invested in growing the business.
Builds relationships with clients
Some clients may go months, a year or even more before needing a major service from you again. And if you’re not keeping in touch with these clients, they may be more likely to take advantage of someone else’s services when the time comes. That is less likely to happen when you have a client set up on a recurring agreement of some sort. Recurring services enable you to keep in regular contact with your clients, build relationships, and makes it all the more likely that they’ll turn to you when they have new work or a looking for complimentary services to grow their business. It’s also a great way to be a trusted partner and be proactive in approaching them about recommended services and changes to help grow their business while growing yours.
Recurring revenue is predictable, which in turn greatly reduces your stress. Sure, you’re going to still be looking for new clients every month in order to grow your business. But having recurring revenue systems in place means you can rely on predictable revenue vs. struggling to make the numbers work so you can pay the bills.
Improves your key business numbers
When you have recurring income strategies in place, you’re going to see your most important business numbers improve. Obviously your monthly and annual revenue will grow but so will other key numbers like the lifetime value of your customers.
Gives you time and money to invest in your business
When you have predictable sources of income coming in every month, you’ll find that you have more time and money. And that’s time and money that you can reinvest right back into your business. For example, you may take your recurring revenue and use it to hire a another team member or perhaps to expand your advertising budget to generate more leads. And reinvestments like these is what helps your business grow exponentially over time. It’s helped us grow nearly 3X in 4 years!
So, as you can see, there are a whole lot of really good reasons to develop a recurring revenue strategy.
Which brings us to this question: what sorts of recurring revenue methods can you employ in your web agency?
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20 monthly recurring revenue streams for web agencies
You might be surprised at all the different ways you can develop recurring revenue streams in your business. In some cases, you may have clients who take advantage of multiple services, which brings even more predictable income into your business.
Check out these 20 ideas to see which ones you can employ in your agency. Pick 2-3 you can work on implementing over the next quarter that best aligns with your business model. Remember, you’ve got to take action to get results!
A monthly retainer is where a client pays you for a set amount of time or services each month. For example, a client may retain your services for five hours per month to work on website updates, like adding pages to their website, maybe updating copy, or perhaps they need design help.
The key here is that you get paid whether the client actually needs any services in a particular month. Clients are paying this retainer to ensure you’ve set aside time for them each month.
We are not fans of trading time for money, but we do use retainers for our WordPress website clients. Why? Because our team has systemized it so it can be executed effectively and efficiently. Most importantly, it is very profitable for our agency! Additional benefits are that it helps us stay top of mind and proactively support the client.
When our prospects are not ready to invest in a new site we help them get better results by addressing the points we’ve identified, using our audits. We use audits with existing clients as well to offer larger retainers and upsell other services.
Most web developers favor big projects from clients with big budgets. But the reality is that there are plenty of clients with smaller budgets, who need help too. And one way to help these clients is to offer turnkey websites to business owners in your niche.
In order to create these sites, you’ll need to figure out what sorts of features and benefits, the clients in your niche are seeking when it comes to getting a website. You can incorporate all these popular features, and then include a limited amount of customization as well.
The key to this strategy is to offer a low price point that’s attractive to those with smaller budgets. However, just be sure your monthly fees pay for the time you and your staff take to build, customize, and launch these sites for clients.
We started with this earlier on in our agency and pivoted away as we’ve grown. Several of our agency friends like Matthew Rodella have made this a central part of their agency model.
Obviously, everyone who has a website needs hosting, which makes this recurring revenue stream a natural fit for a web development agency. And it’s pretty easy to do, since most web hosts offer one or both of these options:
- Sell hosting as an affiliate. This is where you simply recommend a specific web host in exchange for a commission. (More on that in a minute.)
- Resell hosting under your brand. This is where you get to “white label” hosting. The web host provides the infrastructure and servers, while you take care of the management end of things, such as setting up your clients. Most hosts now provide managed services where they take care of almost everything for you. This is all done completely under your branding, so clients don’t even necessarily know that you don’t have physical possession of the servers.
If you decide to offer hosting, work with a reputed company with amazing support and reliability. Dealing with downtime, lost backups, or hacked sites suck! Not only does it frustrate your client, it cause you stress but it takes you away from your business!
Website care / maintenance plans
This is a contracted service where you agree to do certain website care / maintenance tasks like updates, security patches, backups, and minor content updates each month for your client in exchange for a set fee. What these tasks are, depends on the type of site, your service offering, and the client’s needs.
For example, a client with an e-commerce site will want regular security checks, software updates, as well as database maintenance.
Need more ideas? My friend Kyle outlines 38+ services to increase your website care plan recurring revenue here.
Here’s a tip for retaining clients in this recurring income stream: create a package where clients get hosting (which you may even position as a “value add offer”) as part of their monthly maintenance package. Moving to a different host, tends to be a hassle, so most clients will choose to retain your maintenance / website care services vs. dealing with the pain of migrating their site, and dealing with possible problems.
On to our next point and a related topic…
Depending on the types of sites you’re building, your clients may need regular security updates to protect their site. Monthly recurring services could include monitoring services to detect and stop hacks, breaches, malware clean up services & protection, security updates, and other security problems.
If you work with WordPress in your agency, we’ve created a plugin that runs a WP Technical Assessment in minutes, and reports on everything from the types of plugins, vulnerabilities, and exploits to best practice WordPress settings to ensure your client’s sites are as secure as possible. You can view a sample website audit report we use here. Scroll to the WP Technical Assessment section in the report to get a better idea of what our report includes.
Search engine optimization
The good old days of “build it and they will find it,” are long gone. Almost every business has dozens, if not more local competitors, and significantly more nationally.
On page and offpage, SEO strategies often get put on the back burner — behind the website build and offline marketing. In many cases it is completely ignored.
With more and more people searching for products and services, it’s important for businesses who want to be found, to leverage SEO services.
As you know, SEO isn’t a “set it and forget it,” way to get organic traffic. It requires ongoing work in the form of content creation, optimizing pages, and building credible inbound links. And that’s why you can offer ongoing search engine optimization as one of your recurring services.
Looking to learn all about SEO? I don’t know of a better resource than what Brian shares for free at Backlinko.
Another area where your clients have ongoing needs is in the realm of content creation. Depending on the client, they may need content such as lead magnets, white papers, blog posts, social media posts, press releases, newsletters, emails, web content, and more.
Our agency chose not to have a full time writer on staff and instead decided to work with an amazing group of experts from Content Diva’s who specialize in writing content/copy for our customers. They work with us on a monthly basis to primarily write website content, sales pages, email sequences, and blogs.
We’ve found that it’s important to work with writers who specialize in writing for our target audience. For example, our SaaS targets web and digital agencies, so when we need content/copy for it, our go to person is Aaron Wrixon, because of his expertise in writing copy for web agencies.
This is an area that covers everything from planning to executing marketing strategies. For example, you might create content for guest blogging, manage paid ad campaigns on Facebook, and more.
Which brings us to a specific marketing service…
AdWords campaign management
A lot of clients are interested in using AdWords to grow their business. When doing it themselves they quickly find it time-consuming to create, track, and tweak campaigns for optimal performance.
That’s why you’ll want to offer ad campaign management as part of your recurring services.
Make sure to set up weekly, bimonthly, or monthly meetings to cover their campaigns, review results, and discuss ongoing optimization.
Here’s still another area that not only requires a big set up (in the form of landing pages, lead magnets, and initial emails), it also requires ongoing content, optimization, and advertising. You can offer full-service monthly packages that cover all these areas, or you might offer limited packages (such as creating lead pages or emails only).
If your clients are using the WP platform, then you can offer a maintenance and optimization package. This includes items such as making sure the site is updated and secure, updating plugins, checking for errors, tweaking the theme, and similar tasks.
My good friend Kristina Romero from WP Care Market has created an amazing training program to help website professionals and web agencies. The program offers a “copy and paste” website care plan set-up that can be used out of the box, for maximum profitability.
Our agency as well as several others in our FB group have been able to add 100K+ to our annual recurring revenue, by offering retainers and care plans to our clients. If you are interested in learning more about growing your agency using WordPress check out these popular agency-focused podcasts.
We’ve created a WordPress plugin that runs a WP Technical Assessment in minutes and reports on everything from the types of plugins, vulnerabilities and exploits to WordPress settings. This is to ensure your client’s sites are set up using best practices. You can view a sample website audit report we use here. Scroll to the WP Technical Assessment to get a better idea of what we report on.
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Resource library access
If your web agency is like a lot of other agencies out there, then you’re probably creating training guides, articles, webinars and videos. You can provide access to these materials to your clients in exchange for a monthly fee.
This is a great way to offer value to your customers who are looking to learn and do certain things on their own vs. have you do it for them.
Pro Tip: Use your resources to nurture them over time into consulting (more on this in the next point) and other high end done for you or done with you services.
Consulting calls / meetings
As I’ve mentioned before, you’re not just a web developer or marketer. You’re a consultant. And when your clients view you that way, they’re going to want ongoing access to your knowledge and expertise. And that’s why you can offer consulting sessions in person or virtually on a recurring basis, such as weekly or monthly.
For example, you might consult on things such as your client’s overall strategy, their business model, certain traffic-generation techniques, conversion optimization and more.
Here’s the bonus of leveraging this method: if you suggest a specific course of action for your client, they’ll very likely hire your agency to execute the service.
The key here is to find programs that give affiliates like you lifetime commissions. For example, you might sell hosting (as mentioned above) or any other SaaS offer such as live chat, email service provider/autoresponder account, social media tools, project management platforms, or similar offers.
In our agency I say the affiliate revenue we get from promoting services and software isn’t Tesla money, but it definitely pays for nice vacation or two each year.
If your clients are smart, then they’re going to be looking for ways to make more money with minimal effort. Conversion optimization is one way to do it, because it gets your clients more subscribers, leads and customers, without spending more time or money to generate traffic.
You can offer conversion optimization on a monthly basis for websites, landing pages, sales letters, emails, blogs, social media campaigns, and advertising campaigns.
Our free website template outlines dozen of areas on a site you can focus on, to improve your prospect or clients website conversion rates.
White label services
There may be a service you want to offer or keep getting requests about, but don’t currently offer because you don’t have the expertise or resources to do so.
The solution is to leverage a white label service partner, which means you sell certain services under your own branding, even though others fulfill it. For example, you might resell a tool under your own branding, or have a contractor or another company perform certain services like SEO or Paid Advertising for your team. We know of several agencies who even white label day to day website support requests and leverage companies like GoWP (who offer white label WordPress maintenance and support).
One word of warning: just be sure you do your due diligence when it comes to picking a white-label partner, as you don’t want to deal with someone who’s likely to lose you clients due to unreliability or failure to effectively execute the service.
Some clients may have ongoing needs for graphic design, which is why you can offer these services as a monthly recurring service. Examples include ad campaign graphics, brochure graphics, cover designs, business cards, banner ads and more.
If you don’t have a designer on staff, consider finding a freelancer or leverage service providers like Deer Designer, where you get your personal graphic designer for a flat monthly fee.
You can offer graphic design services as a flat monthly fee, or by selling a specific block of hours each month.
Address new problems
Your clients may have problems they haven’t even identified yet. If you can identify these problems, then you have an opportunity to fix those problems – perhaps through a recurring revenue service.
One quick and easy way to identify problems is by doing a website audit. Depending on what type of site your clients have, you may elect to run monthly audits so you can quickly identify problems as they occur. If you use a tool like My Web Audit, then identifying problems is quick and easy, as it takes just a few minutes to run and compile reports around:
- Conversion Rate Optimization
- Search Engine Optimization
- Page Performance
- Content & Copy
And don’t forget – you can identify potential opportunities for recurring revenue by doing website audits for your clients. For example, if you identify where SEO can be improved, then you can pitch a monthly SEO service to your clients. You can also use this strategy to cross-sell prospects on additional services like conversion rate optimization (CRO), or page speed optimization.
As you can see, there are plenty of ways to create recurring revenue streams in your business. This guide covers some of the most common ones that can be used by web and digital agencies.
So, let’s wrap up by talking about how to maximize this strategy in your business…
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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
Provide clear contracts
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 contracts are clear. 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 exactly 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 limits on the number of fixes allowable.
Sell value vs. time whenever or wherever possible
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 certain 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 perform 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.
maintain enthusiasm & deliver results
Once you fall into the regular rhythm of providing monthly services, it’s easy for you to start losing your own enthusiasm about ongoing client projects. It’s important for you to maintain your enthusiasm, provide 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 prove 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. One thing I tell other agency owners is INVEST in yourself and your business. Learn from those who have the expertise and resources needed for success in whatever area of your business you need help with.
Investing in coaching programs like WP Elevation, UGURUS, Revenue Love and DYFC have played an instrumental part in growing our recurring revenue and agency as a whole. The lessons learned, mindset shifts, relationships made, and resources have been priceless! I’ve started a FB group for agency owners check out the details below.
Join our agency owners facebook group
If you are interested in topics like agency lead generation, sales, growth, and entrepreneurship join the conversation in our Closed FB Mastermind for Web Professionals and Agency Owners. Feel free to invite your friends or colleagues if you feel they’d benefit from it as well.
Here are a few other agency coaching programs I know of, but have not personally enrolled in — Agency Trailblazer, Marketing Agency Coach, Consulting Unleashed, Jason Swenk, and Remote Agency Society. Check them out if you’re interested.
Now go take massive action!
I hope you can see the potential of recurring revenue streams for your agency.
Yes, it will take some hard work to implement these but they will continue to pay dividends each month, for many, many years to come!
If you are interested in learning more about growing your agency, join our Agency FB Group.
Now go take action and start implementing new recurring revenue streams into your business, and enjoy the benefits of predictable revenue today!
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