Build Recurring Revenue for Your Agency (7 Models)

You finish a big project, send the final invoice, and then... silence. No new projects. No revenue. You're back to hustling for the next client, hoping something comes through before the bills pile up.

This feast-or-famine cycle is the #1 reason agencies fail. Agencies that depend entirely on one-off project revenue face cash flow gaps between engagements, making it harder to retain talent, invest in growth, or weather slow periods. Building recurring revenue changes the equation entirely.

Key Takeaways:

• Agencies with strong recurring revenue can weather slow periods and invest in growth
• Start with existing clients—they're the easiest to convert to retainers
• Productized services and maintenance plans offer the highest scalable margins
• Track MRR, churn rate, and LTV:CAC ratio to measure recurring revenue health

The solution? Build recurring revenue streams that provide predictable income month after month. This guide covers 7 proven models that agencies are using to escape the rollercoaster and build sustainable businesses.

Why Recurring Revenue Matters

Before diving into models, let's understand why recurring revenue is so valuable:

The Business Benefits

1. Predictable Cash Flow

• Know exactly how much revenue you'll have each month
• Plan hiring and investments with confidence
• Reduce financial stress

2. Higher Valuation

• Agencies with recurring revenue sell for 3-5x more
• Buyers pay premium for predictable income
• Easier to attract investors

3. Better Client Relationships

• Ongoing relationships vs. one-time transactions
• Deeper understanding of client needs
• More strategic partnerships

4. Reduced Sales Pressure

• Less time spent prospecting
• More time spent delivering value
• Lower customer acquisition costs, which McKinsey research confirms is a key driver of profitability

5. Easier Scaling

• Predictable revenue supports hiring
• Can invest in growth initiatives
• Less risky expansion

The Math That Changes Everything

Let's compare two agencies:

Agency A (Project-based):

• Average project: $10,000
• Projects per month: 2-4 (unpredictable)
• Monthly revenue: $20,000-$40,000
• Annual revenue: ~$360,000

Agency B (50% recurring):

• Retainers: $15,000/month
• Projects: $10,000/month average
• Monthly revenue: $25,000 (predictable)
• Annual revenue: $300,000

Agency B makes less annually but:

• Has predictable cash flow
• Can plan and invest confidently
• Has lower stress
• Is worth 3x more if selling
• Has better work-life balance

The 7 Proven Recurring Revenue Models

Here are the models that work for agencies:

Model 1: Retainer Agreements

How it works: Client pays a fixed monthly fee for ongoing access to your services.

Structure Options:

• Hours-based: X hours per month at $Y/hour
• Deliverable-based: Specific deliverables each month
• Access-based: Ongoing availability for requests
• Hybrid: Combination of hours and deliverables

Example: "We'll provide 20 hours of design work per month for $3,000"

Pros:

• Predictable revenue
• Deep client relationships
• Less sales effort
• Can plan capacity

Cons:

• Can feel "stuck" with difficult clients
• May limit capacity for new clients
• Risk of underutilization
• Requires clear boundaries

Best for: Agencies with ongoing client needs, established relationships, capacity for long-term commitments

Implementation Steps:

1. Identify clients with ongoing needs
2. Calculate monthly value delivered
3. Propose retainer structure
4. Set clear scope and boundaries
5. Use recurring billing to automate invoicing

Common Pricing:

• 80-90% of hourly rate × hours
• Or 10-20% discount from project pricing
• Minimum 3-month commitment recommended

Model 2: Productized Services

How it works: Package your services into standardized, repeatable offerings with fixed pricing.

Structure: Pre-defined packages with clear deliverables and pricing.

Example: "Website Refresh Package - $2,500/month: 5 pages updated, 2 blog posts, monthly analytics report"

Pros:

• Easy to sell (clear value proposition)
• Scalable (same package for multiple clients)
• Predictable delivery (standardized process)
• Higher margins (efficient delivery)

Cons:

• Less customization
• May not fit all clients
• Requires standardization
• Can feel "cookie-cutter"

Best for: Agencies with repeatable services, clear deliverables, efficiency in delivery

Implementation Steps:

1. Identify your most common service requests
2. Package into 3-5 standard offerings
3. Create clear pricing and deliverables
4. Build efficient delivery processes
5. Market as products, not custom work

Common Packages:

• Content packages (blog posts, social media)
• Maintenance packages (updates, backups)
• Marketing packages (ads, email campaigns)
• Design packages (graphics, assets)

Model 3: Maintenance and Support Plans

How it works: Ongoing maintenance and support for deliverables you've created.

Structure: Monthly fee for updates, backups, monitoring, and support.

Example: "Website Maintenance Plan - $500/month: Weekly backups, security updates, uptime monitoring, 2 hours support"

Pros:

• Natural extension of project work
• High margins (mostly automated)
• Low time commitment
• Client retention tool

Cons:

• Can become low-value work
• Requires automation
• May need to scale support
• Pricing pressure from competitors

Best for: Agencies that build websites, software, or systems that need ongoing maintenance

Implementation Steps:

1. Identify maintenance needs for your deliverables
2. Package into tiered plans (Basic, Pro, Enterprise)
3. Automate what you can (backups, monitoring)
4. Price based on value, not time
5. Offer to existing project clients first

Common Tiers:

• Basic: Automated maintenance, email support
• Pro: Basic + priority support, monthly updates
• Enterprise: Pro + dedicated support, custom requests

Model 4: SaaS Add-Ons and White-Label

How it works: Resell or white-label software tools to clients as part of your service.

Structure: Monthly subscription fee for tools you manage and support.

Example: "Marketing Stack Package - $1,200/month: Email platform, analytics tools, social media management (all managed by us)"

Pros:

• Recurring revenue from tools
• Adds value to your services
• Can bundle with other services
• Scalable model

Cons:

• Requires tool knowledge
• Support burden
• Margin pressure
• Client may cancel tools

Best for: Agencies that use tools clients could benefit from, want to add value beyond core services

Implementation Steps:

1. Identify tools you use that clients need
2. Negotiate reseller/white-label agreements
3. Package into service offerings
4. Provide setup and management
5. Bundle with other services

Common Tools:

• Email marketing platforms
• Analytics and reporting tools
• Project management software
• CRM systems
• Client portal software

Model 5: Hosting and Infrastructure

How it works: Provide hosting and infrastructure services for client websites and applications.

Structure: Monthly hosting fee with optional managed services.

Example: "Managed WordPress Hosting - $200/month: Fast hosting, daily backups, security monitoring, updates"

Pros:

• High margins (mostly automated)
• Natural fit for web agencies
• Recurring revenue
• Can bundle with other services

Cons:

• Requires technical infrastructure
• Support burden
• Competitive market
• Price pressure

Best for: Web development agencies, agencies with technical capabilities

Implementation Steps:

1. Set up hosting infrastructure (or partner with provider)
2. Create hosting packages
3. Offer to existing clients
4. Bundle with maintenance plans
5. Automate management where possible

Common Packages:

• Basic hosting (shared)
• Managed hosting (updates, backups)
• Enterprise hosting (dedicated, SLA)

Model 6: Training and Education Programs

How it works: Ongoing training programs for client teams.

Structure: Monthly or quarterly training sessions, workshops, or courses.

Example: "Marketing Training Program - $1,500/month: 2 workshops, monthly office hours, resource library"

Pros:

• Positions you as expert
• Scalable (group sessions)
• Can be recorded and reused
• Builds client capability

Cons:

• Time-intensive to create
• Requires teaching skills
• May reduce need for your services
• Needs ongoing content

Best for: Agencies with expertise to share, want to build client relationships, have teaching capabilities

Implementation Steps:

1. Identify knowledge clients need
2. Create training curriculum
3. Package into programs
4. Offer to existing clients
5. Consider group vs. individual sessions

Common Formats:

• Monthly workshops
• Quarterly training days
• Online courses
• Office hours/consulting

Model 7: Support and Help Desk Packages

How it works: Ongoing support packages for clients using your deliverables.

Structure: Monthly fee for support hours, help desk access, or priority support.

Example: "Support Package - $800/month: 10 support hours, priority response, help desk access"

Pros:

• Natural extension of project work
• Predictable revenue
• Can be high-margin
• Improves client satisfaction

Cons:

• Can become reactive work
• Requires support infrastructure
• May need to scale team
• Pricing pressure

Best for: Agencies that build systems clients use regularly, want to provide ongoing value

Implementation Steps:

1. Identify support needs
2. Create tiered support packages
3. Set up help desk/ticketing system
4. Define response times and SLAs
5. Price based on value, not just hours

Common Tiers:

• Basic: Email support, 48-hour response
• Pro: Priority support, 24-hour response, phone access
• Enterprise: Dedicated support, same-day response, dedicated contact

Choosing the Right Model(s) for Your Agency

You don't need to implement all 7 models. Choose based on:

Your Service Type

Creative Agencies: Retainers, productized services, maintenance plans Web Development: Maintenance plans, hosting, support packages Marketing Agencies: Retainers, productized services, SaaS add-ons Consulting: Retainers, training programs, support packages

Your Client Base

Enterprise Clients: Retainers, support packages, training programs Small Businesses: Productized services, maintenance plans, hosting Startups: Retainers, SaaS add-ons, support packages

Your Capacity

Limited Capacity: Focus on high-value retainers Scalable Services: Productized services, maintenance plans Technical Capabilities: Hosting, SaaS add-ons, support packages

Your Goals

Predictable Revenue: Retainers, maintenance plans Scalability: Productized services, hosting Client Retention: Support packages, maintenance plans Higher Margins: Hosting, SaaS add-ons (if automated)

Implementation Strategy

Here's how to implement recurring revenue models:

Phase 1: Start with Existing Clients (Months 1-2)

Why: Easier to sell to people who already trust you.

How:

1. Identify clients with ongoing needs
2. Analyze what you're already doing for them
3. Package into recurring offering
4. Present as value-add, not upsell
5. Offer transition from project to retainer

Example: "We've been doing monthly updates for you. Let's formalize this into a maintenance plan that saves you money and ensures consistent updates."

Phase 2: Standardize Offerings (Months 3-4)

Why: Standardized offerings are easier to sell and deliver.

How:

1. Identify most common requests
2. Package into 3-5 standard offerings
3. Create pricing and deliverables
4. Build delivery processes
5. Create sales materials

Example: Create "Content Package" for clients who regularly need blog posts and social media content.

Phase 3: Automate and Scale (Months 5-6)

Why: Automation increases margins and scalability.

How:

1. Automate billing with recurring billing
2. Create self-service options where possible
3. Build templates and processes
4. Train team on delivery
5. Monitor and optimize

Example: Set up automatic invoicing, client portal for requests, standardized delivery processes.

Phase 4: Expand to New Clients (Months 7+)

Why: New clients should start with recurring revenue from day one.

How:

1. Lead with recurring offerings in proposals
2. Make recurring revenue the default
3. Position projects as add-ons
4. Create packages that include both
5. Track conversion rates

Example: "Our standard engagement is a monthly retainer. Projects are available as add-ons when needed."

Pricing Strategies for Recurring Revenue

Pricing recurring revenue requires different thinking than project pricing:

Value-Based Pricing

Price based on value delivered, not time spent:

• What problem are you solving?
• What's the cost of not solving it?
• What's the ROI for the client?
• What are they currently spending?

Tiered Pricing

Offer multiple tiers to capture different client needs:

• Starter: Basic needs, lower price
• Professional: Standard needs, mid price
• Enterprise: Advanced needs, higher price

Annual Discounts

Encourage annual prepayment:

• 10-15% discount for annual payment
• Improves cash flow
• Reduces churn risk
• Easier to plan

Usage-Based Pricing

For some models, charge based on usage:

• Hours used (retainers)
• Number of deliverables (productized)
• Support tickets (support packages)

Common Challenges and Solutions

Challenge 1: Client Pushback

Problem: Clients prefer project-based pricing.

Solution:

• Start with smaller retainer
• Show value over time
• Offer hybrid (retainer + projects)
• Demonstrate cost savings

Challenge 2: Scope Creep

Problem: Clients expect more than included in retainer.

Solution:

• Clear scope definition
• Change request process
• Regular scope reviews
• "Out of scope" pricing

Challenge 3: Underutilization

Problem: Not using all retainer hours.

Solution:

• Bank unused hours (with limits)
• Use for strategic work
• Adjust retainer size
• Convert to deliverable-based

Challenge 4: Churn

Problem: Clients cancel recurring revenue.

Solution:

• Long-term contracts (6-12 months)
• Annual prepayment discounts
• High value delivery
• Regular check-ins
• Easy cancellation process (reduces friction, builds trust)

Measuring Success

Track these metrics for recurring revenue:

Revenue Metrics

• Monthly Recurring Revenue (MRR): Total monthly recurring revenue
• Annual Recurring Revenue (ARR): MRR × 12
• Recurring Revenue %: Recurring revenue / Total revenue
• Average Revenue Per Client: Total recurring revenue / Number of clients

Growth Metrics

• New MRR: Recurring revenue from new clients
• Expansion MRR: Additional revenue from existing clients
• Churn MRR: Lost revenue from cancellations
• Net MRR Growth: New + Expansion - Churn

Health Metrics

• Churn Rate: % of clients who cancel
• Lifetime Value (LTV): Average revenue per client over lifetime
• Customer Acquisition Cost (CAC): Cost to acquire new client
• LTV:CAC Ratio: Should be 3:1 or higher per standard SaaS and services benchmarks

The Bottom Line

Recurring revenue transforms agencies from project-based businesses into sustainable, scalable companies. The agencies that build recurring revenue:

• Have predictable cash flow
• Can plan and invest confidently
• Have higher valuations
• Experience less stress
• Build better client relationships

You don't need to implement all 7 models. Start with one that fits your agency:

1. Retainers if you have ongoing client needs
2. Productized services if you have repeatable offerings
3. Maintenance plans if you build things that need upkeep
4. Support packages if clients need ongoing help

The key is to start. Pick one model, implement it with existing clients, then expand. Small steps compound into significant recurring revenue.

The question isn't whether you can build recurring revenue. The question is: which model will you start with this month?

Ready to build recurring revenue? Set up automated recurring billing and start converting project clients to retainers today.