One of the big challenges of freelancing is the ebb and flow of client work. It’s a relentless feast and famine cycle. But selling recurring revenue packages can be one way to break out of that cycle and increase your business.
You can develop recurring revenue a lot of different ways, but we want to focus on packaged services where a client pays you a monthly fee for a particular set of tasks. Usually it’s a clearly defined package where you can deliver ongoing value and your clients gets stuff done that they don’t have the time or skill to do themselves. In the ideal recurring revenue situation you’re delivering lots of value with minimal effort.
It’s steady work for you and your client gets some needed expertise. Win, win.
Here’s what you want from a recurring revenue situation:
Consistent, dependable monthly income doing good work for great clients.
- “Consistent dependable monthly income” – This will stabilize your workload, giving you a foundation to build on.
- “Doing good work” – It might not be your all-time favorite work, but it’s going to be good stuff you can do well and you enjoy.
- “For great clients” – You’re looking for clients who trust you and will pay you well to do what you do best. They understand they don’t have the time or expertise to do it themselves, but you do.
Recurring Revenue Benefits for Freelancers
Setting up recurring work with a client is a huge win for you as a freelancer. It can take a lot of the stress out of freelancing and give you stability. Let’s look at the benefits:
The feast and famine cycle is one of the constant challenges for freelance work.
One month you’re swamped: feast. You’ve got so much work coming in that you’re working late into the night to keep up with it.
But then the next month you’ve got nothing: famine. You’re twiddling your thumbs and checking Facebook all day.
It’s a continual cycle that builds on itself, because every time you go through a famine period, you’re so desperate for work that you say yes to everything, which builds into another time of feast. It’s a good way to burn yourself out, never mind go out of business.
But when you put clients on a recurring revenue package you build stability and consistency into your business. Suddenly you have a better idea what you’re going to make next month and you can plan on it. You can say no to projects that don’t fit because you have something to fall back on. You can more confidently pursue projects you want because you have a stable base of recurring revenue to rely on.
Say goodbye to the cash flow roller-coaster with recurring revenue. Things smooth out, and when it comes time to pay the bills you’ll feel a lot better about that.
Work With the Best Clients
Another big benefit of recurring revenue for freelancers is that you can work with the best clients. Because you have consistent work—a safety net—you have more freedom to pick and choose your clients. You’re not saying yes to every project that comes in the door just because you’re terrified of facing another famine cycle.
You can also work with your best clients consistently. Find your favorite client to work with and sign them up on a recurring revenue package. If people are a joy to work with, work with them more. Offer them a little discount for some consistency, and then enjoy working with better clients.
Plus, clients who are willing to do a recurring revenue arrangement understand the value of your work. These aren’t going to be disgruntled clients who keep dismissing your efforts or input. These are the keepers.
Build Your Business
The feast and famine cycle is kind of like the classic fight or flight response. Something happens and you react—without thinking, without planning, without considering the options. You just react.
It’s not a great way to run a business.
You want your business to be responsive and react to changing markets—but not like a cornered animal. You should have a plan. You should have some direction. You should have control over where your business is going.
Generating recurring revenue can give you the freedom to build your business. The stability of recurring revenue gives you the time and resources to think, to plan, to consider options. You can build your business the way you want instead of just reacting to whatever is happening.
It’s a Lot of Work to Get a Client
You put a lot of effort into scoring a new client. Why would you want to do a single project with them and then not see them again for a long time? That’s the downside of web development. You build someone a site and they’re set for a few years. They’re not likely to need a new site a few months down the road.
So don’t waste your efforts bringing in clients by only doing one project with them. Do that initial project to build trust and show how much value you can offer. Then pitch them a recurring revenue package and secure their business for the future.
Achieve Your Freelancing Goals
All that control and freedom means you can focus on your big picture goals. Where do you want your business to go? What are you trying to accomplish? Recurring revenue gives you the stability to look further down the road toward achieving your goals.
Sometimes when work gets too busy, all you can see is the looming deadlines and immediate work you have to do. You’re working on what’s due right now, and it’s nearly impossible to look ahead and see if you’re making any progress.
You can’t see the forest for the trees.
You need some margin to step back and get some perspective. Breaking away from the tyranny of the feast and famine cycle and finding consistency with recurring revenue is a good opportunity to set your sights on your goals and actually get there.
The Goals of a Freelancer
So what are your goals?
There are two primary goals for most freelancers:
- Work life: Make a sustainable living doing enjoyable work on your terms and with people you enjoy.
- Financial: Make the money you need to live the way you want.
This isn’t about getting rich. Recurring revenue can be a way to make more money more easily, but it’s more about establishing a sustainable rhythm to your work and bringing some financial security.
Recurring revenue can get you there pretty easily.
Let’s say you want to make $48,000 per year. That’s $4,000 per month. If you put together retainer packages for $500 each, then you only need to sign up eight clients to reach your goal. That’s a solid, steady base to build your business on.
Of course these numbers are just examples. Figure out your goal and break it down per month and per client.
Recurring Revenue Benefits for Clients
OK, so recurring revenue sounds like a pretty great deal for you as a freelancer. But what about your clients? How is this better for them?
It’s an important question to answer because you have to turn around and sell this deal to your clients. So it has to be a win-win. And it is.
Like any business, your clients want to do their work well. They want to grow their business, build their brand, sell their stuff and be on the cutting edge doing it. But like any business, they face struggles.
That’s where you can help.
You can come in as a consistent partner who can help them overcome their struggles. They can have all kinds of struggles:
- Maybe they don’t know what to do and you can help them sort it out as a consultant.
- Maybe they know the what, but they don’t know the how. Your job is to come in and make it happen.
- Maybe they lack the time, energy or focus to do these things. That’s where you can pick up the slack for them.
- It could be an issue where their time is better spent on their expertise. Most good business people will recognize their own weaknesses and hire someone who’s good at what they’re not. You can be the one who excels at what they don’t.
- Your clients also might just have too many balls in the air and they need someone to help them keep up. You’re taking on the extra workload so nothing gets dropped.
You can come in and help a client get done what they need to get done. That’s a huge help.
But why do it on a recurring basis?
Help Your Clients Be Consistent
Doing it consistently on a recurring revenue model means that it’s continually getting done. It’s not something you come in and clean up every few months, only to turn around and find things in disarray again.
You want to help your client overcome their struggles for good, not just once in a while. And that’s going to mean some consistent work.
Give Your Clients a Discount
That recurring revenue is a great help to you as a freelancer. So you should give your clients a corresponding discount. It’s a win for you, so make it a win for them. That can be a major selling point for a client—they get more work out of you just by doing it consistently.
It’s Sustainable For Them Too
A recurring revenue package helps stabilize your income, but it also helps stabilize your clients’ expenses. When clients play catch up they’re racking up the expenses and probably throwing the budget out of whack. But with your recurring revenue plan they can spread out the cost of doing all that work.
It’s easier for your clients to plan and budget your recurring revenue fee than be surprised by a big catch-up project. Plus, cleaning up the disarray is going to be more expensive than simply keeping it maintained consistently.
Another good reason to help a client on a recurring revenue basis is that they never have to worry about it. If they’re calling you up every time they run into a problem, and you’re doing a separate estimate and invoice, it’s just a lot of unnecessary work. They’re spending more time than they need to worrying about it. If they just hire you on a recurring revenue basis, you can deal with the whole thing and completely take it off their plate.
They don’t have to keep track of it.
They don’t have to follow up.
They don’t have to wonder if they need to call in the freelancer again.
They can sit back and know it’s taken care of. That’s a good feeling for a busy entrepreneur.
Not only do clients not need to worry about it, but they know you’re on top of it. Over time things will change and it’s one more area they don’t have to worry about keeping up. That’s your job.
It’s one thing to outsource the stuff you can’t do and feel good knowing it’s being done right. It’s another thing to have that work done consistently, so you know it’s not just done right once, but repeatedly.
It’s the difference between calling the police and having your own security.
It’s the difference between taking your car to a mechanic when it breaks and having a mechanic on hand to keep your car running in the first place.
Don’t wait for something to break to fix it. By keeping you on a recurring revenue basis, your clients can have things properly tuned and working well, rather than waiting for the wheels to fall off. Maintenance is a lot cheaper than catastrophic repairs.
Marketing Recurring Revenue
As you think about what your clients need, focus on the outcomes and results they want to see, as well as the hassles, struggles and obstacles they face in achieving those results.
You can be the solution.
Explore some of those issues and make sure you’re working them into your marketing materials. Constantly emphasize how you’re saving them hassle and delivering real outcomes. You want to give your clients good value.
What outcomes/results do they want?
- Consistent help from a dependable, knowledgeable partner
- Look good, hip, cutting edge
- Sell stuff online
- Expand business
- Increase brand exposure
- Build community
What hassles, struggles and obstacles do they have doing it?
- Knowing what to do
- Knowing how to do it
- Not having time
- Not having energy
- Not having focus
- Need to use time better on their expertise
- Keeping up with everything
Recurring Revenue Services to Offer
Typically a freelance web developer has two types of services to offer on a recurring basis: marketing and maintenance. Those are two big areas where your clients have trouble keeping up and you can generate some recurring revenue.
Clients often drop the ball on marketing their fancy new website. They hire you to build a great site—and you deliver—but then they don’t do anything to market or update their site. That can be a little frustrating, but now you can turn that into an opportunity for recurring revenue.
There are three different approaches you can take to offering marketing help, and you could even offer a combination of these:
- Strategy & Planning: You’re the expert guide who tells them what to do and they do the work.
- Execution: You handle the actual work and do it for them.
- Training: You train your client (or others) to do the work.
List some of the marketing services you can offer:
- Email marketing: Strategy, creation, editing, maintaining, sending, etc.
- Site traffic: Paid advertising or organic search engine optimization (SEO)
- Reporting/measurement: Distilling key metrics down to digestible basics
- Social media: Writing, publishing, monitoring, engagement
- Content: Creating, editing, publishing (this could include blog posts, ebooks, audio/video, webinars, infographics, slide presentations, landing pages and more)
- Custom development: Identifying customers and niches, planning/targeting, lead generation
Support & Maintenance
The other ongoing recurring revenue opportunity is to help clients with support and maintenance. They came to you to build a site in the first place, it’s only natural to help them keep the site maintained and working as intended.
There are several approaches you could take individually or combined:
- Emergency: Be the 911 webmaster, ready to help in a pinch for a big premium.
- Ongoing: Be your client’s webmaster, building consistency and familiarity.
- Training/Education: Show your client (or other staff) how to manage maintenance tasks on their own.
Here are some of the recurring revenue services you can offer for support and maintenance:
- Upgrades: WordPress, plugins, themes, staging/versioning, etc.
- Hosting: Site, domain, email
- Backup, restore, migration: Regular offsite backups
- Site updates & tweaks: New graphics, social integration, etc.
- Integration: Third party software (CRM, database, financial, etc.)
- Reporting/measurement: Distilling key & critical metrics
- Monitoring: Uptime, security, analytics
- Site setup & optimization: Caching, SEO, Security hardening, BuddyPress, forum, membership, ecommerce
Determine Your Services
Now it’s time for you to sit down and list the recurring revenue services that would work for you. Which ones sound appealing? Which ones sound horrible and you can cross them off the list? Look at the kind of work you like to do and think about what your clients continually ask for.
Put together a list of potential recurring revenue services. Be sure you’re including lots of value.
Package & Price Your Services
Once you have a full list, start creating recurring revenue packages. Put things together in a way that would be appealing to your clients. Think about pricing and what’s going to work for both you and your client. Remember to include a discount as you put your pricing together.
Create Your Marketing
Finally, you need to think through how you’re going to sell your recurring revenue services. You’ll want a sales page on your site, a list of benefits you can talk through with customers, a way to up-sell your current clients, etc.
Recurring Revenue Tips
Let’s get practical. Here are some tips to help you put together your recurring revenue offerings:
- Don’t nickel and dime yourself: Make sure you’re offering real value, but don’t keep adding in services to the point that you’re spending hours and hours each month with these recurring services. You don’t want to offer every client an hour per week and suddenly you’re maxing out your allotted time each week.
- Three packages: When you put together packages, three is the magic number. Highlight one of them as the best deal and steer your clients in that direction.
- Test with the best: You want to refine your recurring revenue, so put together a plan and then test it with your best clients.
- Always get better: Recurring revenue is not a ‘set it and forget it’ business. You need to constantly refine your services, improving what you’re offering and delivering for your clients. Otherwise that revenue won’t keep recurring.
- Show your skills: Put on a webinar or write an ebook to demonstrate your expertise. Rather than giving away your secrets, this is showing your skills. Instead of poaching the best practices, smart clients will see you know your stuff and hire you to do it for them.
- Maintain contact: There’s a temptation for maintenance services to be invisible for the client—after all, the whole point is that they shouldn’t have to worry about it. But you want to maintain contact with them and show ongoing value. Your recurring revenue is their recurring expense, so make sure they also see recurring value.
Tools to Help
You’re going to need some tools to help generate this recurring revenue and keep it going:
- BackupBuddy – A staple of maintenance and security is backup and restoration. So you need a simple way to automatically backup sites and allow for quick and easy restoration.
- iThemes Security – You clients don’t want to worry about the latest security threats and vulnerabilities. Take care of it for them with a solid security plugin that can lock things down and monitor potential attacks.
- Sync – When you have a bunch of clients there’s going to be a lot of repetitive work as you keep sites updated. iThemes Sync allows you to do it all in one spot, saving you time.
- Exchange – Anything you can do to automate work will make recurring revenue easier, so you want to grab the ecommerce plugin, Exchange. The Invoices and Recurring Payments add-ons will allow you to bill your clients online and enable those automatic, recurring payments.
Recurring revenue can be a major win for your freelance business. Take a look at your work and your clients and see how you can bring some consistency to your income. Say goodbye to the feast and famine cycle of freelancers and embrace recurring revenue.