I’ve yet to find a single agency or freelancer that has both success and longevity without some form of monthly recurring revenue (MRR).
It’s entirely possible— but it would be extremely difficult.
The natural cycle of hustling to get work, then being buried in it happens to us all. You might think being buried in work sounds like a great problem to have, but it comes with it’s own set of challenges.
When you’re in the weeds, you don’t have time to fill your pipeline with new prospects. When you finally launch your projects you quickly realize that all that time you spend behind your keyboard was time you weren’t spending networking and lining up your next gig.
But recurring revenue changes that in a big way.
When you have a set amount of dollars each month that you can rely on, you start to relieve the pressure of having to constantly be busy both producing and sourcing projects.
For most website developers, the maintenance / care plan is the easiest source of MRR.
The opportunity to convert those project customers into ongoing work is a perfect fit. You can continue to ensure their site is online, working properly, and stays up to date, and in return they’ll cut you a check each month (bonus points if you have them on automatic payments).
I’m probably not breaking any news to you thus far— most agencies and freelancers understand this concept. But what is your conversion rate like turning projects into MRR?
If it’s not 100%, then there’s room for improvement.
There are 3 main reasons why project customers don’t convert into recurring revenue customers.
If you’re reading this, I’m just going to assume you already provide great customer service, your customers are happy with your work, and you have some sort of maintenance/care plans in place.
If not, there’s another 3 reasons to add to the following list.
For the rest of us, we can point to one (or more) of three reasons why your customer passed on your plan.
- Your customer doesn’t understand why maintenance is needed.
- Your customer thinks they can handle it.
- You pushed too hard (or not hard enough)
Let’s take a look at each of these scenarios and find out how this happens, and most importantly, what we can do about it.
1. Your customer didn’t understand why maintenance is needed.
In most cases, your customer will not have an in depth knowledge of WordPress like you do. You might mention things “plugin updates”, “security”, “hosting” and watch their head spin.
But client education is hard.
It’s not only hard because there is a lot to learn, but if their not a geek like us, it’s a pretty boring subject.
While you know that things like plugin updates, proper security, scheduled backups, and a great hosting plan are crucial to the success of the website, those things aren’t so visible from the front-end— which is how your customer sees the website.
If you come in hot, and give them a ton of information you risk overloading them and making them feel like they are backed into a corner. If you don’t emphasize the importance enough, any small mention of it might be in one ear and out the other.
2. The customer thinks they can handle it.
Once your client understands the importance of a well maintained site, they may just decide they can take on that task themselves.
While even though a small number of non-web-designers/developers can, in my experience it’s unlikely they will.
Let’s be honest, updating plugins, setting up security, automating backups, and making edits to the site isn’t really that difficult. But it did take you some time to learn these things— and you had the desire to learn it.
Picture a few of your clients. Do they seem like the type with plenty of free time? Do you think they’re going to take all the steps you did to learn how to do this properly AND make time each week to do it?
Customers not only have to understand why it’s important (reason #1), but they also have to understand the scope of everything involved.
Your maintenance plan’s value isn’t in the ability to press update or set automatic backups, it is the fact that they never need to worry about it— it’s peace of mind that everything will work fine without adding more to their already long to do list.
3. You pushed too hard (or not hard enough).
In order to really nail the first two reasons your customers aren’t buying care plans, you need to walk a fine line between being too pushy or not pushy enough. When you do find the right balance balance you can drastically increase your conversion rate.
The risk of pushing too hard
In having conversations online with thousands of web agency owners and freelancers from across the globe I’ve seen a lot of strategies. One always peaked my interest, but always felt a bit “off” but I couldn’t put my finger on it— the mandatory maintenance plan.
The mandatory maintenance plan actually sounds like a pretty good setup. Once your agency is well-established enough to the point where you can turn down projects that aren’t the right fit, turning down prospects who don’t want the ongoing commitment seems very appealing.
But this can easily put you in the trap of pushing too hard.
While your customer might have gone along with your demands in order to get their project rolling, but what happens in month three of their maintenance plan when they start to wonder what they are writing that check for?
Because they were forced into a plan, there is no certainty you go the true “buy in” you really want. Even if they went along with it, do they value it? Do they want to pay you every month?
Pushing the care plan too hard is an easy way to build a roster of clients that resent you.
The risk of not pushing hard enough.
On the other end of the spectrum, there are agencies that passively mention their care plan in a proposal, or worse, just in some text on their website.
If the customer doesn’t bite, they move on and it’s not mentioned again.
This is not only a disservice to you, but to your client as well.
It’s likely they fell victim to problem #1 (didn’t understand the value) and you didn’t do much to help them.
Sure, it can feel uncomfortable to be a bit pushy, but you really owe this to your client. What are you going to say in 6 months when their site is infested with bugs, is no longer functioning, and their hosting plan expired?
If you didn’t make all the responsibilities crystal clear, then no matter who’s fault it is, the blame will be placed squarely on you.
Learn to thread the needle.
When it comes to finding the right balance, it’s important to not push too hard (or too soft), and to educate (but not overwhelm). In order to build any sort of ongoing, long-term relationship the most important factor is trust.
If a customer is talked into your plan, or is paying for something they don’t understand (or think they don’t need)— it will be hard to build trust with them.
More important than project work, monthly recurring revenue is about building relationships. You want to become the trusted advisor for your clients. The one they turn to when they have a problem— because they know you have the answer.
Take time to look at your process.
Are you making the benefits (not the features!) of your care plan clear?
Do your clients realize that running a website will take ongoing work?
Are you giving them enough of a nudge to take a hard look at the solution you offer without knocking them over the head with it?
It’s a difficult balance to find. But it’s striking this balance, not just your price, that will ultimately make the decision.
Want a faster way to grow your monthly recurring revenue?
I struggled with all of these problems for years as my agency grew. My first few projects I did no client education and I didn’t push at all. Eventually I started doing more and more client education to the point where it became completely overwhelming for my customers.
What I needed was a solution that easily and effectively communicated the necessity and scope of WordPress maintenance— without being a pushy salesman.
That’s exactly how, at The Admin Bar, we came up with The Website Owner’s Manual.
After implementing this manual into my processes in April of 2019, I’ve had a 100% conversion rate on my maintenance plans… Including customers who said “no”, then magically changed their mind, and customers who wanted to cancel, and thought twice only to stay on for good.
No need for a long sales pitch here, but The Website Owner’s Manual is now helping over 1,050 agencies and freelancers convert customers into recurring revenue just like it’s done for me — so it’s worth checking out 🙂