This post originally appeared at 22+ Web Design Agency Recurring Revenue Ideas via ShivarWeb
Every web design agency’s core problem is that large, profitable projects end while costs continue month after month.
Steady, monthly, and ideally passive, recurring revenue solves this core problem. Recurring revenue means that –
- You can be patient and wait for the right clients
- You don’t have to chase bad leads
- You can hire & keep quality, long-term staff
- You can multiply your business valuation when it comes to sell
- You can smooth your cash flow & expenses rather than rely on credit
- You have time to improve project processes & profitability
In other words, recurring revenue rocks.
Recurring revenue is why so many web design agencies try to add marketing services. It seems natural to complement project-based website design with retainer-based website marketing.
But website marketing creates a whole range of costs and risks. The number one risk is that marketing is out of your skill set…and so you actually lose clients from poor performance.
Instead, I think there’s a better way.
The key is to present your web design clients with an ongoing package of web design-related services.
The package should be invoiced monthly and should automatically recur until the package is canceled.
The package should be high-value for clients. They should be purchasing peace of mind, convenience, and high ROI.
And lastly, the package should be high profit margin with low labor, lots of automation, and obvious performance metrics for you. It’s a win-win-win for everyone.
But what kind of web design-related services can be packaged together? Here are some ideas.
Web hosting is the most natural fit for any web design agency. Your client’s website needs to live somewhere. And if you have a client who doesn’t already have hosting or specific hosting needs, you can provide website hosting as part of a monthly recurring package.
There are tons of options to provide the service.
- You can purchase and mark up a regular website hosting plan.
- You can purchase a Reseller Hosting account and host your client’s site there.
- You can also create a hybrid option if your client has specific needs like Cloud hosting or email infrastructure.
Either way, you can have total control over pricing since you know your client better than the hosting company.
Upsides: You can generate high profit margins with low labor. Hosting companies will provide most backend support along with front-end support tools. You can also set up the account to provide additional services with lower risk (like security & backups).
Downsides: If something breaks, you own the problem. Your reputation is also totally dependent on another company. It will also require careful setup with impeccable quality control. Your client may have specific requirements to maintain website ownership.
Software / Tools: You’ll need good Reseller Hosting from a support-oriented hosting company (I use InMotion Hosting). If you are marking up a plan for each client, use a company with account management tools. For example, InMotion Hosting uses WebPro, and WP Engine has proprietary tools built just for agencies.
Websites can go down for a whole host of reasons. And when they go down, speed is critical. Uptime monitoring gives a client peace of mind. They’ll know that if their website goes down, somebody knows about it and can work to diagnose and fix the issue.
Upsides: Uptime monitoring can be completely automated. If you are using a reputable hosting company, they’ll handle most troubleshooting and response.
Downsides: You will be on the hook for getting the setup right. And if there’s a major cause, you’ll have to spend time, energy, and expertise making things right. Also, you can’t charge a lot of money for monitoring as a stand-alone service.
Software / Tools: I use JetPack for all my WordPress website uptime notifications. For non-WordPress websites, there’s Pingdom and StatusCake.
Cybersecurity is on every website owners’ mind – no matter how small they are. Even run of the mill spam can dramatically affect an infected website. Security monitoring provides clients with peace of mind and prevention of much bigger, more expensive issues.
Upsides: You can automate most monitoring and charge quite a bit, even as a stand-alone service.
Downsides: You will take on the risk of missing issues and fixing anything that comes up. If there’s a major issue, you’ll have to spend time, money, and expertise to make things right. You’ll also need a lawyer to make sure your firm does not have any legal exposure to potential lawsuits.
Software / Tools: I use JetPack for WordPress website security monitoring and Sucuri for my non-WordPress security monitoring.
Everyone (so…everyone) who has a smartphone knows about software updates. They are annoying, frustrating, time-consuming…but also critical. Unless you are building in pure HTML / CSS, websites are just big bundles of software. Software updates are critical, but can also cause problems. Clients will pay for someone to safely and consistently apply software updates.
Upsides: You can automate most software updates and charge a consistently high fee. Your client is unlikely to ever cancel the service. Your client will also benefit by saving money on future fixes.
Downsides: If a software update goes awry, you’ll be on the hook to fix the issue. You’ll also need to stay up to date on exactly what different software updates do to prevent conflicts.
Software / Tools: I use JetPack to manage my multiple WordPress website updates. I know that a lot of people also like ManageWP (now GoDaddy Pro). For non-WordPress websites, you’ll have to seek out a platform-specific solution.
A website backup is Website Ownership 101. Website backups have to be created and stored securely. Like software updates, clients know that backups need to happen, and know that they are time-consuming. They are buying peace of mind and convenience.
Upsides: You can automate the backup process and charge for both the service & storage. Your client is unlikely to cancel the service.
Downsides: You are responsible for creating a foolproof & consistent process. You’ll also have to adjust fees depending on how often a clients’ site gets backed up.
Software / Tools: I use JetPack’s VaultPress module to keep an automated backup for my WordPress website. Many hosting companies will also bundle a backup manager with your subscription. InMotion Hosting has its Backup Manager available on Reseller plans.
Software breaks, especially software that has prerequisites or integrations. A software warranty is a guarantee that you’ll fix any software issue that comes up for free in exchange for a regular fee. Clients are purchasing peace of mind and convenience.
Upsides: Like appliance warranties, you can provide high value for high fees and little labor. Since you designed & built the website, you should have an intimate knowledge of software risks.
Downsides: You are getting paid to take on risk. If something happens, you are on the hook for fixing the problem. You’ll need to carefully understand your clients’ needs and software risks. You’ll need to budget for hiring any needed expertise if something happens.
Software / Tools: No tools needed. However, you’ll need to maintain a familiarity with all your client’s software needs. Keep tabs on every software update so that you can fix any potential issues.
Every client wants to know how many visitors their website has. But few want to learn how to dig around in Google Analytics. Most would be happy with a PDF of some key takeaways. You can provide this ongoing service by setting up Google Analytics with metrics that matter to them and sending monthly PDF reports.
Upsides: Analytics Reporting is a low labor and high value service. You can automate the reports and let Google do the heavy lifting. Additionally, it can allow you to dip your toe into retainer marketing services.
Downsides: You’ll need to learn a bit about Google Analytics and set up the account correctly.
Software / Tools: I use Google Analytics to set up regular monthly reports. There is a lot of scope for customization though. Spend time getting the right Dashboards, segments, and KPIs (key performance indicators) set up, then automate.
Most clients also love to know how their Google rankings are doing, who is linking to them, and how their local listings are doing. There are many marketing intelligence tools that will provide white-label marketing reports in PDF format for you to pass along to your clients.
Upsides: You can subscribe to a marketing intelligence tool and have your clients basically pay for your subscription. Find one that has PDF reports (like SEMrush) and set it to automate your reporting. It’s low labor and high value.
Downsides: Few downsides, except that you may have to field questions about what the metrics mean and propose solutions.
Software / Tools: I use SEMrush to set up regular marketing reports. These reports can complement Google Analytics. They are also *very* high value for many clients. SEMrush has a clean setup with white label reports available, so you can provide proprietary data at very high markups with your brand everywhere.
There are three areas of SEO –
- Off-page – promoting your website to other websites.
- On-page – creating content that is relevant to search queries.
- Technical, aka “in-page” – make sure your site is crawlable & indexable.
Unless you are running a large site, most technical SEO and on-page can now be done with automated tools like Ahrefs and SEMrush.
Even if you don’t provide SEO services, providing automated audits can be worthwhile for clients.
Upsides: You can automate this service and bundle it with other reports for higher fees. You can also use it to show the quality of your web design work or recommend new content or new initiatives. It can also allow to test marketing retainers.
Downsides: You’ll need to understand the terminology and reporting to field any questions from your clients. You’ll also need to be able to fix or at least diagnose any major issues that come up.
Software / Tools: I use SEMrush to provide SEO Audit reports in addition to Google Search Console. These reports will pull usability and small technical tasks. These reports allow you to maintain a conversation about ongoing improvements. You can bill to fix any issues or refer the client to an SEO firm.
Expertise retainers are when clients pay every month for the right to speak to you about their project. At a project-based agency, new projects demand all your attention, because that’s what pays the bills. But many completed projects will inevitably need some support.
Expertise or Support retainers allow your previous clients to stay at the front of the line when contacting you about a problem. Expertise retainers are common at the higher levels of professional services (e.g., corporate law). By definition, they require no deliverables. They only require that you remain available.
Upsides: You’ll have potentially 100% profit margin fees. Taking care of past clients will no longer come at the expense of current clients, since everyone will be a current client. You’ll be able to maintain longer relationships and make recommendations without your own financial considerations.
Downsides: You’ll need to be in business for a long time with lots of happy clients to pull off an expertise or support retainer. Many clients are not used to paying monthly fees for no deliverables. You’ll have to position this service well for clients to see the value. You’ll also have to carefully define scope so that an expertise retainer doesn’t scope creep into a website maintenance retainer.
Software / Tools: I use FreshBooks to set up recurring billing for any retainers if you don’t already have an invoicing software setup.
If you provided custom design for a clients’ website, then they will likely need a similar design for all their social media channels and website updates.
A graphic design retainer allows the client to request a certain number of graphic designs per month that fit with their brand / website.
Upsides: You’ll solve an immediate & tangible need with a low churn rate and potentially high fees compared to the amount of labor. There are lots of tools that can speed up the process.
Downsides: This service is hard to automate, but it can be low labor and high value with the right software tools / designers. There’s a risk of scope creep and revisions increasing labor costs.
Software / Tools: I use a mix of Fiverr, Canva, and Stencil to quickly work up basic graphic design. There are also services like DesignPickle that provide unlimited graphic design.
Even if your client’s website has a content management system, I’ve found that most clients simply don’t want to edit their own website. It’s too unfamiliar. They’d rather email a “website person.” You can charge monthly fees to be their Webmaster.
I’ve had clients pay me more to edit their website over the course of 2 years than they paid for the entire design.
Upsides: You’ll solve an immediate and tangible need for potentially high fees, depending on the client.
Downsides: It has the risk of lots of tedious, high labor tasks in addition to scope creep.
Software / Tools: Most content has to be edited manually. But tools like WordPress’s new Gutenberg blocks and apps like Grammarly make it fast.
This service pairs well with an SEO Audit service. Think of a content refresh like pressure washing a website. Website content gets stale over time. Businesses need seasonal content. You can go ahead and schedule out the updates on a monthly retainer.
Upsides: You’ll have an easy, straightforward sell with tasks that can be planned well ahead of time.
Downsides: You’ll have to define scope and budget for writers. There’s little to automate, though you can plan for labor costs ahead of time.
Software / Tools: Most content refresh will need manual updates based on existing knowledge. But I have hired freelancers on Fiverr to help with large edits along with WordPress plugins like Better Search & Replace.
Clients always need new content. Traditionally, agencies will sell content creation as a stand-alone project or sell it as part of a marketing campaign. But you can also sell it as a part of a monthly retainer.
Upsides: You’ll have a tangible service with a low churn rate. You can also budget for a long-term freelancer or employee. You can test out marketing retainers without a large commitment.
Downsides: It’ll require labor costs and will be hard to automate.
Software / Tools: I write a lot of content myself. But I’ve also used Fiverr, WordAgents, and ProBlogger. I’ve also worked with copywriting pros like Katelyn Dramis, Evan Porter, Nebo Agency, Knucklepuck Media, and Copywriting Course to scale up campaigns.
Social Media & Email Scheduling
Social media / email marketing presence is essential for every business, even if the business doesn’t really need a social media strategy or social engagement. You can sell your clients on convenience and take on their tedious social media tasks.
Upsides: You can charge a high fee for low labor, tangible tasks. You can also use software to automate most of the process and outsource a lot of creation.
Downsides: You’ll have to be careful and considerate of your clients’ reputation and maintain communication around posting details and project scope. You don’t want to accidentally take over social media response and customer support.
Software / Tools: I use TailWind for Pinterest & Instagram and Buffer for Facebook / Twitter. I use MailChimp my email marketing. My clients mostly use either Aweber or ConstantContact.
Software Revenue Share
Many website & software platforms offer a revenue share for agencies who use their platform. You’ll get recurring fees from the platform as long as your client’s site lives on that platform.
Upsides: You’ll get truly passive, guaranteed revenue in addition to other platform perks. The platform will also handle a lot of the support & security. Your clients will also benefit from a solid platform and can reduce their “vendor risk” away from your agency.
Downsides: Your client will be less attached to your agency (though that can also be a sales point for you). You’ll also have to sell your client on the platform for their website.
Software / Tools: I use Affluent to keep track of all partnership / affiliate revenue, though some software requires manual checking. Shopify offers a 20% revenue share for ecommerce websites (more for Enterprise sites). Aweber also offers revenue share for email. WP Engine offers revenue share for WordPress hosting.
If your client’s site is using software that you’ve developed, you charge licensing fees.
Upsides: You’ll have recurring revenue with 100% profit margin for as long as your client uses your website.
Downsides: Software licensing can introduce some obstacles to closing on web design contracts. Many clients expect a single upfront fee, so you’ll have to position the software licensing carefully.
Software / Tools: No need for tools, just an understanding of copyright and software licensing – especially if using WordPress.
Marketing Revenue Share
If you don’t provide marketing services, you can still refer clients to partner firms in exchange for a referral fee or revenue share.
Upsides: You can generate marketing retainer revenue without starting up a marketing division. Your clients can also benefit from working with a reputable marketing firm with a close relationship with their design firm.
Downsides: You’ll have to balance the referral process with your client. You’ll also have to find the right marketing firm, since you’ll both depend on each other to provide good work and good referrals.
Software / Tools: Tools will depend on your partner company. The best solution is via similar CRM software like HubSpot or SalesForce.
Website Upgrade Installment
You’ll sign a client to basically pre-pay for a future website redesign.
Upsides: You can secure a client for future projects while smoothing your cash flow.
Downsides: This arrangement will only be interesting for a certain type of client.
Software / Tools: No tools are needed, though you will need to scope the project well.
You’ll make regular data-driven optimizations to your client’s website.
Upsides: You can provide a tangible, recurring service for a high-fee.
Downsides: You’ll have to tackle many misconceptions and really sell the service without harming the reputation of your web design work (i.e., “why isn’t my website optimized from the start?”). You’ll also have to scope the work well.
Software / Tools: I use Google PageSpeed Insights, Google Mobile Friendly Test, and SEMrush’s Site Health tool to find website elements that should be improved.
A/B Testing & Reporting
You can provide regular A/B Tests and updates for clients based on a regular, consistent schedule.
Upsides: You can provide a tangible, very high value service for a high fee. You can also automate portions of the process.
Downsides: You may need to coordinate and/or compete with your client’s marketing firm. Not every client is a good fit for A/B Testing, since you really need a significant amount of traffic for relevant results.
Software / Tools: I don’t do a lot of A/B testing, but tools like OptinMonster are great for testing email opt-ins while Google Optimize and Optimizely will help you test entire pages.
Surveys & User Testing
You can run user feedback surveys and regular user testing for clients.
Upsides: You’ll have a tangible, recurring service for a medium to high fee. You can also automate portions of the process.
Downsides: Unless you have the right client, it can be hard to prove the service’s ongoing value. You may have to compete / coordinate with your client’s marketing firm.
Software / Tools: I use Google Surveys and Forms, but there are plenty of other tools available, depending on exactly what you are testing or surveying for.
One-off projects will always bring in most of the revenue for a web design agency. But that doesn’t mean that recurring revenue isn’t important.
Investors diversify between exciting stocks and dependable bonds. Car dealerships push car sales, but rely on service centers. It’s the balance & diversification that’s important.
Start by making a master list of recurring services that you can offer. Put them in different packages. Make sure they are upfront and known for your leads. They can help position you as the agency that will take care of your clients before and after the website launch.
You’ll build a stable, consistent business that will benefit you and your clients.
If you found this post useful at all, be sure to link to it from your blog or share it across your social accounts. Peace!