A Model For Recurring Revenue Streams

I’m rather proud to say I’ve established companies in the past which have benefited hugely from the concept of recurring revenue streams, but who do they serve? How can both client and service provider enjoy the benefits of recurring monthly payments?

Well let me start with the most obvious and that’s the benefit to the provider of regular, predictable, budgeted income. Income that pays the wages and overheads, then if a nice one off project comes in… the extra income can wash straight through to the bottom line. In reverse the client also has cash flow benefits with regular budgeted service payments rather than ad hoc amounts.

The challenge for any company providing such services though are many. How do you know you’re making a profit? Where do you draw the line on a customer who simply wants too much and just keeps pushing and pushing (we’ve all had them)

Well in the authors view – and forgive me for being perhaps… old fashioned, but you really have to have the mind-set that you truly want to provide a really good service to your customers and see them benefit from your offer. If you make the mistake many do, of thinking that one can put a nice package together, then sit back whilst your customers happily pay every month for something intangible, you’re lost!

Lost because firstly you’ll never sell it (whatever “it” is) and secondly you’ll be awash with client complaints and questions about how much you’ve done for them this month and scrabbling around to find something to tell them.

And the reverse is true of the clients position. If a prospect can see that you know what you’re talking about, that your offer addresses a problem or issue and your price is right, they’ll buy your ongoing service.

But here’s the part of building up such a service that most business people can’t grasp: There will be some months where you lose money on your service with a given client, but if you just knuckle down, work hard and adopt the approach of “don’t worry about the fee or your labour allocation, let’s sort this out for you” then in the long run you’ll win and such clients will gladly pay you month after month because they’ll come to trust you and your team.

Lastly… of course there will be those who take the Mick and you’ll have to be tough and terminate the contract, but generally, enjoy the relationship with your clients, take pride in seeing your work make a difference and trust me… they’ll pay and continue paying!

 

avatar Name: James Briggs
About: James is a Digital Marketing Consultant with over 12 years of design, development, search engine optimisation and project managment experience previously fullfilling a number of senior roles for two of the South's most well established and successful digital marketing agencies before setting up WebSafe Solutions Ltd in 2009. In his own words..."I've planned, designed and developed countless websites and am proud to have helped hundreds of clients to get the very best from their digital marketing campaigns. Some would say I have an unusual blend of knowledge, skill and experience and for my sins I'm an absolute perfectionist!"
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