Recurring Service
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How to Sell Recurring Services as an Agency

A recurring service can be one of the strongest profit-making options a business has, but it can also be one of the toughest to arrange. Not only do recurring payments require a reason to keep paying, but there needs to be something there to justify a customer or client sticking with the paid service for an indeterminate amount of time.

If you are interested in generating recurring revenue, either for your business or as a solo freelancer, then it helps to understand the risks, challenges, and techniques involved in making the concept work properly.

What is a Recurring Service?

A recurring service is any service that draws in repeated revenue, usually on a monthly basis. Instead of a customer buying a product or service one time, they pay regularly until they stop using it, like a subscription fee. 

Usually, a recurring service is paid until the customer does not need it anymore, at which point they stop paying and stop getting the benefits from the service. This could be regular deliveries of a physical product, digital goods, third-party services, or even an upgrade tier to an existing service.

Creating a Recurring Service

The hardest part of taking recurring payments is having something that your customers will want. Even for digital marketing and web agencies, it can be tough to decide exactly what features are worth hiding behind a paid subscription – if you make a mistake, you might push potential clients away to another agency.

  • Sell Something New

There is no better justification for recurring credit card payments than something your customers can’t get otherwise. This might be a new feature, better service, exclusive items, and options, or even just a basic upgrade to your standard service. If it is good enough and stands out, people will pay for it.

  • Sell Something Better

In many cases, there will be cheaper (or even free) ways for customers to get what they need, but they will also be stressful, confusing, or sometimes flawed. A better service or product can justify a higher price, and many people gravitate towards the best option regardless of the cost involved.

  • Sell Something Necessary

There are also situations where selling a necessary feature as a subscription can lead to increased profits. These could be updates, security measures, performance improvements, or access to resources that a customer would need to get beyond the basic stages of whatever you offer.

While this can backfire if you are not careful, it can also be a great money-maker in the right hands. If somebody needs your services, then they are in the perfect position to pay you for them, as long as you keep the price reasonable and can retain them in the long term.

Marketing Recurring Services

For the customer, there are both good and bad aspects to a recurring payment: as a business, you want to focus on the good parts. Focusing on the good aspects of taking recurring payments can help overshadow the increased cost for the customer over long periods of time.

Value

Think about services like Netflix, which are famously subscription-based: many people are happy to pay for a subscription there because it offers a huge amount of value, and some people have outright replaced any other television or streaming platform in their lives with Netflix.

The value of a service like this is not just high, it is enough to make it a staple of many people’s entertainment needs. The cost compared to the amount of content available makes it a good deal for the customer, even if they will never watch 95% of the content on the platform.

Updates

For software (and some hardware), a recurring service is vital for getting instant updates. Many people pay subscriptions for important software, whether that is for professional or personal use because they get updates rolled out automatically and do not have to worry about missing features or broken tools.

The same goes for many digital marketing companies: many clients will continue to pay for minimal work after the major SEO work is complete, mostly so that they have professionals on standby if something needs to be changed or adjusted.

Customer Wants

There are plenty of cases where customers will buy into a recurring service that offers them something they want or need. Antivirus programs are an excellent example since even the free antivirus systems have paid tiers that offer more features or extra security measures.

A less urgent example could go to a service like Amazon Prime, which has been sold as an improvement to the regular Amazon experience. It is never necessary to use the basic features of the online storefront, but millions of people have decided that faster shipping and access to additional streamed content is worth the added cost.

Sunk Cost

Sometimes, you can play on the sunk cost fallacy to nudge customers towards the decision you want. Sunk cost refers to the psychological need to avoid wasting money: if a client has already spent money working with you, they are more likely to pay extra instead of going to another company.

On top of that, digital agencies handle a lot of data that they do not share with one another, so it can be a hassle for a client to try and shift over to another agency on a whim. Many will gladly sign up for recurring credit card payments rather than trying to handle an agency change for a lower price.

Using Existing Footholds

Subscription services are inherently scary for new customers who do not know what they are getting. If you run your own agency, then you have probably encountered customers who have been quite shaky about a one-time payment for some minor work – imagine that, but scaled up to a monthly, or even yearly, agreement.

Most repeated payments will come from people that you already have a connection with, like customers who are looking to get a higher-tier service for their website or small business. The more they have worked with you, the easier it becomes to decide that they should pay more.

However you decide to market your recurring service, there is not a perfect strategy. Every business is different, and you need to understand your customers and audience before you leap into a subscription fee model.

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