Recurring revenue is a powerful way to boost your freelance WordPress business. Understanding the concept is pretty easy, but how do you actually make it work? We’ll explore how to execute recurring revenue.
Today we’ll teach you how to execute recurring revenue.
Ultimate Goal: Minimize Effort
First, let’s be clear about the ultimate goal. Yes, you’re offering a valuable and necessary service to your clients. They need it (sometimes desperately) and are willing to pay for it (sometimes handsomely). You’re creating a stable income stream that’s more reliable for your business.But recurring revenue only works if you’re minimizing your effort. If you’re spending hours every day dealing with updates and backups and billing, you’re doing it wrong.
You need to create a streamlined system that can handle lots of clients and minimize how much time you invest. Yes, you’ll need to spend some time each week taking care of your clients. You are offering a service and they do deserve your attention.
Think scalable. Think repeatable processes. Think quick and easy. This should be a process you can set up and hand off to an underling. Everything you set up should be all about minimizing effort.
How to Execute Recurring Revenue
OK, now that we understand the basics of how this works, let’s talk about how to do it.
Start With a Contract
Don’t start any kind of recurring revenue relationship without a contract to set firm boundaries. You need to clearly define what is covered and what is not. Because more often than not you and your client will have a different idea in mind. A contract determines who is right.
A contract should spell out all the details of your recurring revenue service. It should list what’s included and some items that are not included.
- Do clients get unlimited space?
- Downtime should be rare, but it can happen. Do you guarantee a certain percentage of uptime?
- Do you offer email services to clients? (No! Don’t do that—it’s too much work. This is something you should specify that you do not offer.)
- What happens if an update breaks the site? (You should fix it—that’s the peace of mind your clients are paying for.)
- What happens if a client breaks the site? (Charge extra or include a limited number of “free” fixes—you need to limit your liability to client foolishness.)
- Who pays for and renews premium WordPress plugins? (Should be you—don’t make your clients worry about this. But note that you only renew as long as they subscribe to your maintenance plan.)
- You should note that you’re not responsible for third party actions.
- What does a WordPress backup include? Database, media files, full site?
- How many WordPress backup restores will you do? (Limit the number of restores you will do that are caused by the client.)
- A website is only as secure as the users, so specify that you’re not responsible for poor passwords or shared login info.
A contract makes it absolutely clear what you’re offering and what you’re not. That will save you in the long run, and ultimately minimize your effort.
Be sure to cover all the logistics in your contract:
- Make sure your clients sign the contract. You might even ask them to initial each page to show that they’ve read it. No surprises.
- Any time you make updates to your contract, inform your client and give them a new version to sign.
- Include a revision number on the contract (you can put it on the footer of each page). Keep a change log of what changes you made in each version.
- Your contract should include information about when and how payments are made (including late payments and collections).
- You should have a clear and strict policy for what happens when a client doesn’t pay.
Our Recurring Revenue Summit includes a sample contract used by Nathan Ingram for his maintenance plans. It will show you all the legal details you need to include (though you should always have a lawyer review your contract).
How to Deliver Your Services
Setting up the contract and communicating expectations with your client is the first step. Now it’s time to talk about how to do the actual work. Let’s execute recurring revenue.
How to Do WordPress Hosting
WordPress Hosting is a perfect service to offer your clients because they need it and you controlling it makes life easier for them and easier for you. As a bonus, it also makes you money.
Making life easier is the overriding concern here. You’re offering clients a convenience, not competing with cut-rate hosting. You’re also not setting up a server shop in your living room. You should partner with a trusted web host with phenomenal support.
You’ll need to decide between VPS and managed WordPress hosting (don’t even consider shared hosting). The choice is yours, but in general VPS hosting gives you more control for a cheaper price.
A few tips to make hosting easier:
- Don’t bother explaining hosting differences to clients. They don’t understand the difference between shared, VPS, or managed hosting. And they don’t care.
- Set up one website per cPanel to minimize the damage of a hack.
- If you’re only hosting WordPress sites, you can ask your host to turn off anything not related to WordPress to free up resources.
- We’ve said it before and we’ll say it again: Do not provide email services. Instead, point your clients to Google apps or Microsoft and an IT person who can help them set it up.
- On a quarterly basis, you should do a scan for large files. Ask you host for a list of files larger than 25 MB on the server. These are usually large log files or failed backups that can be deleted. It’s a good way to avoid wasting storage space and slowing down your backups.
How to Do Updates & WordPress Maintenance
You should set up a specific process and plan for doing updates and regular WordPress maintenance. You’ll need to figure out what works best for you, but you absolutely need to have a system and a plan.
- Manage multiple WordPress sites with iThemes Sync. This will make regular updates a breeze and save you from having to log in to every single site you manage.
- Have a set time every week to update WordPress core, themes and plugins. Schedule that time and make sure it’s consistent. This is not something you can skip or put off.
- Use a WordPress security plugin such as iThemes Security Pro to protect your clients’ sites.
- Subscribe to an online security blog, such as Sucuri’s, to stay informed about security issues, and when there is an increased threat level, you should do more frequent updates.
- Keep a list of troublesome plugins to test prior to updates (these include “hefty” plugins such as e-commerce or membership).
- Create a staging site to test mission-critical updates or complex websites (BackupBuddy’s WordPress staging and deployment features will be very helpful here).
- Use a ticketed support system to handle client changes and requests. Insist that clients use this system and do not email you. Funneling support requests to one channel is vital to having an efficient and streamlined system.
How to Do WordPress Backups
You also need to have a specific process and plan for backups.
- Of course we recommend a WordPress backup plugin such as BackupBuddy for regular backups. Use whatever works for you, but remember that any backup system should be automatic, off-site, and include the ability to restore (there are actually 10 must-have backup features to look for when searching for the best WordPress backup plugin).
- Set a schedule for your automatic WordPress backups. You want to wow your clients with your service, so go above and beyond. Full daily backups are the way to go.
- Be sure to store your backup files off-site in BackupBuddy Stash or some other cloud service.
- Check your off-site backup location weekly (when you do your weekly updates) to make sure the latest upload is there.
- You should keep at least 30 days of backups archived.
- Make sure any email notifications are going to you. Clients should not have to worry about any issues with backups (that’s your job).
How to Communicate
Figuring out how to execute recurring revenue should also include communicating with your clients. By its nature, hosting, maintenance, and backups are pretty quiet work. Your client will likely never know you’re doing this work. Which means it can be helpful to remind your clients that you’re taking care of it.
Find a way to offer your clients regular communication about your maintenance work, not so they can know the details of what you’re doing, but so they have a sense of the value you’re delivering.
You want to find a balance between communicating value and minimizing your own effort. A monthly or even quarterly update telling clients the updates you’ve made can work. If there are any high-level security issues, you might mention your efforts protecting their sites and maybe even send out an extra update. You want to keep your clients from worrying.
Now that you’ve learned how to execute recurring revenue, it’s time for the most important part: getting paid.
It’s no good to set up all these processes and systems and then have billing be a nightmare.
Keep it simple. We nerds have a tendency to look at a problem and come up with an elaborate system we never use. Just do something simple that works.
Here’s a simple billing plan:
- Final project invoice: When you finish a web project, invoice for the remaining balance and include the first month’s maintenance prorated to the end of the month (So if the site is finished on the 20th, you’re charging maintenance for the remaining 10 or 11 days of the month—so roughly a third of the regular monthly maintenance cost).
- Recurring monthly invoice: Set up a recurring transaction for the first of each month. Make all your clients pay on the first of each month—it’s easier to have everyone on the same schedule. You can set up a subscription using the client’s credit card and an online payment processor, such as Stripe.
- Create a billing calendar: You can deal with expiring credit cards by setting up a calendar of expiration dates with reminders at 30 days and two weeks.
- Check for failed charges: Check your transaction activity on the third of every month for failed charges.
Not every client will be willing to use a credit card. You don’t want to chase down monthly checks, so make those clients pay three, six, or 12 months up front. Create a recurring invoice for these clients and a calendar item for yourself to check up on it.
That’s How to Execute Recurring Revenue
You want to make sure you’re doing as little work as possible to have regular money coming into your account. That’s the beauty of recurring revenue.
Check out the Recurring Revenue Summit, a three-hour, on-demand webinar with expert Nathan Ingram. He talks through how to create recurring revenue services, including specific tips and suggestions for selling and executing these services.