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Recurring revenue is the key to scaling your agency (without scaling your stress)

In the last decade, companies that shifted from a traditional pay-per-product model to a recurring revenue model have grown nearly five...

Profile picture of Ido Lechner

11.21.2022

4 min read

In the last decade, companies that shifted from a traditional pay-per-product model to a recurring revenue model have grown nearly five times faster than the S&P 500. In other words, charging repeatedly for services isn’t just some Silicon Valley pie in the sky dream, it’s the new way of doing business.


The reality is, recurring revenue isn’t just for big players and platforms. Web design agencies and freelancers can also leverage paid subscriptions, memberships and retainer models to earn sustainable (and predictable) revenue too. Here’s how to deliver an additional service offering that will provide your agency with sustainable growth.


From one-off payments to recurring revenue

Recurring revenue has quickly become the lifeblood for agencies seeking sustainable growth and profitability. When work is guaranteed, you’re free to focus on new business while resting assured that the money is coming in. Add a recurring revenue stream to recession-proof your agency and put an end to the feast or famine of always having to find new clients.



1. Upsell at the right time


Anchor clients that provide steady, long-term work are the backbone of a recurring revenue stream agency. Forbes estimates that at least half of an agency’s income should derive from anchor clients, meaning you should have more than one. But how do you get them?


Start with your existing client list. People who are already paying for your services are more likely to trust you. Business.com reveals that new customer acquisition costs five to ten times more than selling to existing customers, and that said customers spend 67% more on average than newcomers.


Every agency should aim to upsell once they hit the 3 month mark in a project. When it’s time, include a recurring service like SEO optimization or email marketing. A great way to do this: create drip campaigns that promote additional offerings. For instance, you can introduce clients to the importance of copywriting in one email, demonstrate the results some of your clients have gotten in a second email, then offer your own copywriting services in the third.


You can also plant the seed for upselling during your initial discovery call. Ask questions that help you understand the work you’ll need to do and the results you’ll need to provide in the first few months in order to set up any upsell conversations for success. Something like, “if we’re three to six months into working together, and you’re excited about the results you’re seeing, what would those results look like?”



2. Start offering consultation services


Often an afterthought, consultations allow agencies to take a strategic lens to projects and simultaneously build rapport with clients.


Consider what services you can package your consultations with: SEO? Blogging? Marketing? Strategy? Ongoing work that requires specialized knowledge works best.


While it’s always useful to pair your work with strategic calls, you don’t always need to bear the cost yourself by giving away valuable time. Things like discovery calls can be offered for free as a means for prospecting and warming up leads, but further calls should be framed as an additional service you’re providing.


That said, don’t get trapped in charging per hour, the equivalent of taking on a single project. Establish call packages, or cross-sell consultations with your main offering to secure repeat work.


Strategic consultations may or may not feel effortless to you, but charging for them will only make you look more professional, not less. More importantly, it’s an easy way to add a new revenue stream while protecting your time (which in agency life might just be more precious than money).



3. Clearly define three ongoing packages


Whether it’s a monthly retainer, consultation services, SEO, email marketing or social media services, ensure your offers are clearly displayed on your website. But don’t just feature examples of one-off projects like a final landing page in your agency portfolio, take pride in long term results by dedicating space to them as well.


Bundle singular projects with recurring services to create an attractive offer that maintains your client-agency relationship for the long haul. It can be as simple as the website you were already going to build for your client stacked with ongoing maintenance such as content updates, monthly design tweaks or performing regular site backups.


You can take it a step further by offering a resource library subscription containing all the templatized assets you use behind the scenes to create client work: things like content calendars, PDF worksheets made from FAQs, video trainings for clients, exclusive premium content, such as blog posts or gated newsletters, and member-only webinars. As long as you keep updating the library with significant inclusions, you’ll be able to charge recurring fees for access.


A third option is becoming a subscription affiliate for tools your client may need: email marketing services, social media software, graphic design tools and/or project management tools. In this situation, you add a link (with context) to your website or social channels that link to another company’s sales pages, and whenever a sale is made through your link your agency gets commissions. Many of these platforms offer a recurring commission structure for as long as you keep the link up. Look for affiliate opportunities on company websites to get in touch with a representative who can set you up with a custom link and automated payments.


Lastly, consider charging more money by breaking down the cost of a website into monthly payments. This way you can score more clients who are skeptical of paying in full up front, but will be more than happy to bundle ongoing maintenance for an extra fee when paying in smaller increments.



Subscribe to your future

The best agencies keep customers coming back for more, not just because they delight their clients, but because they have tactics in place that encourage them to return. Switching to a recurring revenue model means changing the way both your agency and your clients see the work: from a one-and-done project to a journey to scale your clients’ empire.


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