How to Boost Your Business’s Revenue with Ongoing Service Retainers

As a business, turning client projects into ongoing revenue streams is a great way to grow your revenue and increase your service offering. At our agency, service retainers are a large part of our growth, and play a key role in how we deliver on our clients’ digital marketing objectives.

Ongoing service retainers are imperative to sustainable long term business, as they allow you to have guaranteed revenue stream every month. This in turn allows more time to be spent prospecting new business and increasing current client value. Having an ongoing revenue stream also provides you the security to make more informed business decisions, and more accurately forecast key business milestones.

In this article, we’ve collated tips, strategies, and examples of how you can turn projects into ongoing revenue streams for your business, based on what has worked for us over the years.

How to introduce service retainers to your business

There are four key considerations and a number of questions you’ll need to take into account before deciding on your approach to service retainers. These are:

• What can you productize?What services do you currently offer that can be turned into a revenue stream? What services don’t you offer that your clients need?

• What is your pricing strategy for your services?How will you price these services? Will you charge hourly or value based?

• What is the capacity and project management situation within your team?这些正在进行的项目是如何管理,是否h what tool? Who is responsible for managing the outputs and client service? Do these projects require a separate team for the initial build, or can your existing team handle it?

• How will you keep the revenue coming in?How does adding value become part of your company culture? Who is responsible for spotting opportunities with clients?

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1. Choose what to productize and how you’ll price it

As part of your strategic approach to creating ongoing service revenue, you need to consider a number of factors that will be unique to your business. First, you need to determine what you can productize. Consider what services you currently offer that could potentially be turned into a revenue stream, or alternatively, what services you don’t offer that your clients need.

我们的一个关键的建议是将这些potential services or products into two key categories:

1. Support retainers: These encompass service and maintenance style tasks, and are normally smaller, quicker jobs
2. Strategic advice and customization: These are the services that make a big impact on your client’s business, and ultimately help them generate more revenue for their online store

Once you have identified a few services or products you could offer to your clients, determine the best pricing strategy for them. Do you want to charge your clients an hourly rate, or should your services to be value-based?

"What services do you currently offer that could potentially be turned into a revenue stream?"

The correct answer will depend on how your business typically operates and what works well with your clients, though typically anything classified as a support retainer is charged hourly. Services that align more to strategic advice and customization have a bigger impact on your client’s bottom line, and will therefore allow you to add more value.

Here’s an example of how this could be done across two different service types:

Service Type 1: Support Retainers

• Inclusions:
• Service and maintenance
• Quick changes
• Productization examples:
• Sell in packs of hours
• Ongoing retainers of X hours/month
• 定价策略:
• Hourly
• When to sell:
• In the initial sales process as part of maintenance
• If a client asks for updates beyond additional scope of work

Service Type 2: Strategic Advice and Customization

• Inclusions:
• Creates value for the business
• Assists in business growth or toward their goals, i.e. increases cart size, assists in increasing revenue
• Productization examples:
• UX recommendations
• Implementation ofShopify Flowautomation tool
• Training to use the Shopify platform
• 定价策略:
• Value based pricing
• Based on the impact it will have on the business and outcomes
• When to sell:
• When new technology is released or there is a shift in the client’s market
• If a website isn’t performing as desired
• Three and six month reviews of performance once a site has launched

2. Master your project management to keep the revenue coming in

Perhaps the most important consideration is whether your team has the capacity andproject managementskills to accommodate the extra work that may be generated by these efforts. You’ll need to figure out how you’re going to manage any ongoing projects, including who will be responsible for managing the outputs, client service, and any project management tools you use. Consider whether a separate team should take over the ongoing project, or whether it should stay with those who handled the initial project.

Forecast to manage resources

In order to ensure there are enough resources within your business, you’ll need to look at implementing key tools and forecasting analysis to assess what sales are in the pipeline and the capacity in your current team to handle the influx.

Here is a useful tool to predict your incoming revenue:

Value of current sales and/or proposals in market / Historical percent of sales sign-offs = Incoming revenue.

Apply this to your current team’s workload/capacity management. For example:

$100,000 sales in market / Average of 50 percent sign-off rate = $50,0000 in value that will need to be managed by your team. You may then convert this to hours, if that is how you manage workloads internally.

In order to keep the revenue coming in, you’ll also need to implement a strategy both internally with your staff and externally to your clients.

Set team-based goals

Internally, create some expectations for your team, set some overall goals, and make it fun! As an example, start with a goal for your team to pitch an ongoing service retainer (in some capacity) to all existing clients undertaking once-off projects (including reaching out to past clients). This will allow you to gain immediate qualitative feedback from your clients and understand more of the market appetite for the type of services you’re offering.

From this top level goal you could then aim to have 50 percent of proposed projects sign-off (or your current average and sign-off rate). Pending your team structure, this can be filtered down further into more team-specific and even individual goals aligned to contribution. For example, each operational team member can aim to provide one idea per client to the account service team, who can then pitch one idea to each client.

You might also like:Growing Your Agency’s Revenue: 3 Metrics to Help You Plan for the Future.

Motivate the team

To make it fun once you’ve set the overall goals,outline key milestonesalong the way. Make these visible to your team, and align them to something that will directly impact them. This could be expanding the team, holding a staff event, or getting new merchandise when key milestones are hit. Even better, ask your team for ideas on what would motivate them!

Some key milestones to celebrate along the way to your overarching goal might be first sign-off, largest sign-off, X number of client sign-offs, beating the average sign-off rate, and more.

"Align team goals to something that will directly impact team members. This could be expanding the team, holding a staff event, or getting new merchandise when key milestones are hit."

Set up processes to review performance

It’s also a good idea to lock in 3 and 6 month checkpoints to review the performance of the services and provide recommendations for improvement. The key factors to look at during these need to align to your overarching goals and key milestones. This might include number of proposals sent to clients and the percentage sent to overall client base, sign-off rate of proposals broken down by both an overarching and service-specific goal—allowing you to identify which services are gaining the most traction with your clients—and overall revenue generated.

Seek client feedback

On the client’s end, make sure you keep open feedback loops so you know what they’re looking for and what your business isn’t currently offering. Take their feedback on board and continue to adapt your service to meet their needs.

Also ensure that you’ve made your current clients aware of other services you offer outside of the work you already do with them—especially when you’re introducing a new service or product. Take the time to identify what services are most profitable and have the most uptake, then refine and expand your service offering accordingly.

3. Use tools to monitor key metrics for success

In order to track your progress and manage workloads, you’ll want to rely on tools to track revenue pipelines and projects. These are the tools for internal and client management that we use to track our work.

Sales pipeline management:Hubspot

Use it to:

• Manage your sales pipeline
• Monitor value adds in market
• Identify key contributors and teams to sales
• Allocate resources prior to sign-off

Key metrics:

• Sales in pipeline
• Won vs lost sales
• New business vs value adds
• Time in pipeline

Site performance:Google Analytics

Use it to:

• Monitor site performance
• Identify areas for improvement

Key metrics:

• Conversions
• Bounce rate

Invoicing software:QuickbooksorXero

Use it to:

• Monitor your client’s invoicing
• Identify when a client has stopped work
• Identify your top clients and opportunities

Key metrics:

• Client value
• Identify invoicing gaps

Project management tool:MondayorAsana

Use it to:

• 得到一个活动的整体视图
• View current projects in progress for clients
• Collaborate with clients

Task management tool:Todoist

Use it to:

• Manage tasks
• Create templates to streamline processes
• Set reminders to follow up with clients and check performance

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4. Implement your new service retainers

Once you’ve assessed all these initial considerations and discussed them with your team, you’re ready to start building ongoing service retainers into your business. Below are three next steps you can take to implement retainers into your long term business strategy.

1. Trial services:Identify and roll out potential services on some of your long-term and trusted clients.
2. Hold ongoing reviews of client satisfaction:Analyze how the services have worked and what challenges were faced with the client or internal operations that need to be addressed.
3. Start expanding your offering and refining: Roll out the services across your client base and continue to refine your offering based on client and staff feedback.

Key takeaways and learnings to apply

Over the years, implementing a model of ongoing service retainers has allowed us significant growth by focusing our energies on growing the business as opposed to securing existing revenue.

Through over 10 years of adapting our approach to service retainers, there a number of key learnings to keep in mind:

• Growing and developing a new service offering takes time, so expect the first few attempts to be loss leaders. Set a limit and key checkpoints to ensure this effect isn’t significant to your bottom line.
• Never stop evolving your offering, as the market and client expectations continually shift. You need to consistently improve your service offering to align with this.
• Remember to align any service retainer goals to your overarching business goals, and stay true to your strategy.
• Not all services are created equal, so track and understand which has the biggest impact on your clients’ businesses and what is most profitable for your business.

Feel free to take inspiration from this article and adapt a model that will suit your business and your clients!

Have you experimented with service retainers in the past?Share your experience in the comments below!