Original Article by Elegant Themes
There are many positive aspects to running a service based WordPress business. You get to meet and work with all kinds of great clients. Most of the people in the WordPress community are awesome and you have an opportunity to positively impact other entrepreneurs businesses, and ultimately their livelihood. And if your business has grown to the point where you have employees, you’re also providing an opportunity that helps them pay their bills and put food on the table for them and their families.
Despite all the positive aspects that surround a typical WordPress development or design business, there are also a few challenges. Yes, we all know that clients can occasionally be a headache to deal with, right? But that pales in comparison to managing cash flow and keeping your business afloat when things are slow. And there always slow times.
So what can you do to survive the slow times?
The first solution that comes to mind for most WordPress businesses is to land more clients. But in most cases, that simply perpetuates the problem. When you’re busy, you’re too busy. And then before you know it, you’re scrambling for more work. Rinse, and repeat.
Enter recurring revenue. I’ll stop short of calling it the holy grail, but if you can find a way to make it work for your business, it brings some significant advantages to the table.
In this post, we’re going to take a quick look at some of the advantages of a recurring revenue model and explore some ideas for its implementation.
The Advantages of Recurring Revenue
In most scenarios, when structured properly, recurring revenue offers more advantages than disadvantages. Sure, every once in awhile you’ll have a client who thinks a retainer is the equivalent of being at their beck and call. For the most part, those kinds of problems can be overcome by structuring your services correctly. Let’s consider three of the primary advantages.
Build a More Stable Business
If you’re running a WordPress business, one of the most challenging aspects financially is managing cash flow. If your billing on a project or hourly basis, you need to be continually filling your sales funnel with new prospects. If you stop prospecting, it’s reasonable to expect that down the road you’ll experience a dry spell.
The other problem is that even though you do work for clients today, you might not get paid until tomorrow (or later). Accounts receivable can become a real thorn in the side of most WordPress business owners.
Recurring revenue goes a long way towards solving both these problems. It does not mean that you can stop hunting for new clients. Nor does it mean you’ll always get paid on the due date. Instead, recurring revenue can help to reduce some of the bumps in the road by smoothing out your revenue. It also makes it much easier to perform accurate financial projections.
Build Longer Term Relationships
When a WordPress project comes to an end, it can be a real challenge to maintain your client relationships. And the longer you’re out of touch with a client the more likely it is that they’ll be tempted by someone else’s sales pitch.
Adding a recurring revenue component to your business means you’ll be in constant contact with your clients. At least once per month you’ll have an opportunity to communicate with them. It also means you’ll have an opportunity to provide additional value which further cements your relationship. It’s worth remembering that strong client relationships are the backbone of a successful business.
Spend More Time With Each Client
The final benefit worth mentioning is that recurring revenue models usually allow you to spend more time with each individual client. This is really a win/win scenario because there is a good chance that clients will see a better return on their investment when your focus shifts from getting their project completed as quickly as possible to making sure they stick around for as long as possible.
5 Ways To Add Recurring Revenue to Your WordPress Business
The number of ways in which you can add recurring revenue to your WordPress business is vast. With just a few minutes of work, I’d be willing to bet you can come up with at least 5, and some of them might even be different than what I came up with for this post. Let take a look:
WordPress Maintenance & Support
How may times have you finished a WordPress project for a client and handed over the keys, confident that they could manage things from that point forward? And how many times have you finished a project, only to have your client call you a few weeks later with a few “small” changes or questions. Never happens, right? Of course, you happily oblige in the name of customer service. But then it happens again 3 weeks later.
If you have a good relationship with your clients, chances are, they will never hesitate to call you for help. Putting a monthly retainer in place, even if it’s a small one can be a great way to make sure that both parties are getting a fair exchange of value.
Make sure you outline exactly what’s included for the price they are paying and make sure you specify when extra charges will kick in. For example, here’s what the team atWP Curve has to say:
To help make sure we can keep all of our customers happy, we only do small fixes and jobs. This means that 30 minute tasks are in scope and larger, more complex projects are out of scope.
The bottom line is that most clients don’t have the time to keep their websites up to date, or they don’t remember how until it’s too late. For a reasonable maintenance/support fee, you can provide them with both peace of mind and more free time while earning yourself a recurring fee at the same time.
Advertising or PPC Support
Almost every business needs a steady stream of new customers. Depending on your core WordPress services, it might make sense to provide PPC services. If you’re working with small business owners, you have a great opportunity here since many small business owners are already paying for advertising that provides little in the way of verifiable results (ie. traditional print advertising). All you need to do is help them spend their money more efficiently.
Rates for monthly PPC support can be based upon the ROI that you are providing to your clients. Which potentially makes this a lucrative revenue source, especially if you’re capable of producing great results.
I’ve conveniently avoided the term SEO here, but that’s essentially what we’re talking about. Before you shake your head and tell us that SEO is dead, spend a little time browsing around the average small business WordPress website and you’ll see the potential for opportunity.
- Poor internal linking
- Improper use of title tags
- Default WordPress permalink structure
- Inconsistent name, address, phone number (NAP)
- Poor keyword use
- No Google MyBusiness page
- No image optimization
- And the list goes on
Improved search engine rankings are important to most businesses and while these tasks might not represent a long-term revenue source, on a small website site they can provide a source of temporary recurring revenue. On a large site that produces a lot of content, there can be an even bigger opportunity.
It not unreasonable to say that a WordPress website is never actually complete. Any WordPress website that is offering a product or service for sale also presents an opportunity to implement conversion rate optimization.
Offering CRO services means you’re responsible for testing, and ultimately improving the results your clients are able to achieve from their website. CRO requires a high degree of trust between yourself and your client since you need the authority to make small changes to their website on an ongoing basis.
Like Pay-Per-Click, your clients will be expecting a return on their investment. If you can produce results, the sky is the limit.
Imagine if a small law firm comes to you for help with improving the results they are getting from their WordPress website. If their site is currently converting clients at 2% and you’re able to increase that to 3% over the course of 12 months, that’s a 50% improvement. How does that impact their bottom line and what kind of fee do you think they would be willing to pay over 12 months in order to experience those results?
There are plenty of tools for carrying out a/b and split testing on WordPress websites so you shouldn’t have any trouble carrying out conversion rate optimization experiments on your client’s sites.
Content & Social Media Management
In 2015, most businesses are aware of the role that social media and content marketing play in their overall business success. Offering these services as an extension of you WordPress business is another way to help make your clients more successful and increase your revenue.
Social media, despite the visibility benefits, it often low on the priority lists of business owners for things to do. Offering a series of monthly social media packages can be a great way to add a stable and recurring revenue source.
Content marketing is another potentially great source of revenue. Many businesses put off content marketing, despite it’s benefits, simply because they hate the process of writing and it takes considerable effort to do well. If you decide to add content marketing to your list of services, make sure you account for the time involved in creating high-quality content. Most business owners have no idea how long it takes to outline, write and edit a typical 1500 word blog post.
If you don’t have the time or resources to deliver a steady stream of high-quality blog posts for your clients, you could always team up with a freelance blogger.
Properly managing cash-flow is something that is often on the mind of business owners, and that includes most WordPress service based businesses. Clients and projects always seem to come in spurts and the slow times can be very challenging – especially if you have business overheads or employees to worry about.
One of the best ways to improve long-term cash-flow is by providing services that generate recurring revenue. You can also take a closer look at how you structure your current billing practices. Could you possibly offer a longer term payment solution or a way to reduce the revenue peaks and valleys? Sometimes a project based fee or hourly rate is not the best solution for you or your clients.
The most important things to remember are:
- Don’t try to be everything to everyone. It’s fine to offer new services, but be excellent at a few things instead of mediocre at many.
- Make sure that any time you’re offering recurring revenue services, you outline exactly what’s included. Monthly fees make it easy for clients to introduce scope creep even more so than on project based work.
If you are currently providing services that generate recurring revenue, please share your experiences in the comments below.