Maintaining a steady flow of revenue is among the biggest problems web development agencies face.
The typical business model is built on project-based revenue. All resources are dedicated to a major project with a single client at a time. The pause between finishing a big project and starting the next one can be threatening as a non-profit timeframe in which only costs enter the balance sheet. The agency struggles to stay open until the next project begins.
Fortunately, this is not the only revenue option. A focus on customer lifetime value has long become common in other industries and can make an impact in the web development world as well.
Maximizing lifetime value means not just serving a client for the duration of a single project. Instead, it means building a consistent relationship with that client, providing ongoing service to keep the finished website running smoothly and profitably. The service switches from build to maintenance, with revenue flowing more consistently. That’s the value of a website retainer agreement.
What is a Website Retainer Agreement?
Retainers exist throughout the marketing world, and they all tend to take a similar shape. A flat monthly stipend commits you to ongoing service on behalf of the client. In advertising, this might include continuous campaign optimization or keyword research. In web development, it includes responsibility for the maintenance and ongoing optimization of a client’s website.
Most web development retainers cover maintenance, technical support, updates, and bug fixes. In other words, it covers everything your client needs to keep their online presence functional and running smoothly for the duration of the agreement.
Tasks covered by the retainer are typically low-impact, which are simply for the web developer to complete. At the same time, they offer significant value for clients who might spend significantly more finding a developer or agency for the sole purpose of fixing everything in a one-time contract.
Retainers are also known as care plans, typically focusing on a single website. On WordPress, these WP care plans can play a vital role in keeping plug-ins, templates, and other elements of the backend structure up to date.
Benefits of WP Care Plans for Developers and Clients
For the developer, offering a WP care plan comes with the natural benefit of recurring revenue. Profits can be more reliably forecast with downtimes in revenue at minimum levels even between major projects. In addition, the increased customer lifetime value maximizes the impact and revenue potential of every newly closed lead.
At the same time, signing up for a white label WordPress support retainer offers significant benefits for the client as well:
- Quick-response technical support on Skype, telephone, and email.
- Bug fixes and website enhancements.
- Minor design and content updates on demand.
- Content management and formatting updates – critical for marketing-oriented web campaigns.
- Expert mediation and dispute resolution between the client and the host.
- Uptime monitoring and speed verification.
- Monthly reporting on website speed, security, and performance.
Above all, of course, a retainer offers peace of mind especially for clients who might not be web development experts. While website issues for smaller businesses might not quite approach the $100 million in revenue loss Amazon experienced during a single hour of downtime, an unreliable or buggy website is certainly not in a company’s best interest.
The Challenges of Working on Retainer for Web Agencies
The above benefits are clear, but it’s important to recognize that a website retainer will not be a magic bullet. Preparation for the challenges you might face as you implement this business model can help you make sure that you’re well-prepared to turn it into a vital tool for revenue growth.
- Becoming too Dependent on WP Care Plans. Retainers, at their best, should not be the biggest revenue driver for your business. The large projects still matter. Good web care plans, as we discuss below, should have client flexibility built-in. But that also means that you cannot count on retainer revenue as guaranteed for future months. Using it as a bridge between projects instead of your core revenue focus, and diversifying your client base instead of focusing on a few major partners, can help you avoid this dependence.
- Retainers as Roadblocks to Other Projects. Considering your retainer work as a bridge between projects sounds great in theory, but doesn’t account for the fact that the care plan doesn’t stop when the next major development project rolls in. If these are your major revenue drivers, you cannot let WP care plans get in the way of new development work. On the flip side, you should only accept new projects when that retainer work leaves you with enough weekly hours to actually do the work.
- Less Nuanced Development Work and More Repetitive Tasks. Most of your white label WordPress support retainers will be focused on ongoing maintenance, updates, and bug fixes. That’s naturally less fulfilling than building something new from scratch. It can turn into a challenge when your developers start treating the retainer work as less important or less deserving of their attention than the larger projects.
How to Build WP Care Plans for Your Clients?
Avoiding the natural challenges of web retainers means being diligent about how you build your agreement. Before you can begin to pitch website maintenance retainers to your clients, you need to have a strong model in place.
Every web retainer should include 5 core components:
1. Scope of Work
Serving as an introduction, this section outlines exactly which tasks and services are part of the retainer. Rather than stating generalities, the SOW should be detailed with both services rendered and projects outside of the scope of this agreement.
Great SOW statements outline exactly what happens should a task fall outside of the agreed-upon terms. It might be an hourly rate on top of the existing retainer or a new contract altogether. That usually involves a way to gain mutual agreement on exact conditions anytime out-of-scope work occurs.
2. Payment Terms and Time Frames
This piece goes beyond tasks and into the resources, you will invest in retainer-related work. It includes a specification of the exact hours included in the retainer and a time frame of when this work will take place. For instance, it might specify that the retainer includes 5 hours of work per week, to be completed between 8 am and 6 pm on weekdays in a specific timezone.
Of course, especially in web maintenance, some work (such as urgent bug fixes) can fall outside these time frames. These exceptions should be detailed here, leaving nothing up to chance or unclear.
Another important component of the agreement is the duration of the retainer. Specify exactly when your clients can opt-out or cancel, or whether they sign up for a minimum amount of hours. Make the cancellation procedure clear to avoid confusion later on.
Payment terms should also be a part of the retainer agreement in this spot. Most WP care plans are on a monthly payment schedule, with trackable hours per week and month presented on a monthly summary report and invoice. Clarify exactly what that process looks like, and when you expect a payment, here. Finally, include details on the payment methods you accept.
3. Reporting and Communication Standards
As part of the agreement, provide details on how you will communicate with the client and the client can communicate with you. For us, this communication occurs directly through our project management software, minimizing potential miscommunications and lost messages through channels that are difficult to track.
Ad-hoc communication, such as a client requesting service as part of the retainer, is as important as a regular cadence of reporting. This reporting may include simple lists of hours spent on the retainer, as well as details on website performance and maintenance performed within regular intervals. That sets clear expectations, reducing the gap between demanding clients, and limited agency resources.
4. Specifications for Overage Work
What happens when a task falls within the SOW but outside the allotted hours for a month? Chances are your clients can’t just wait a month before getting the work done. As part of your agreement, outline exactly how these types of overages will be treated.
Most often, this includes an hourly rate for any work that goes beyond the allotted hours spent. We’ve also seen agreements in which clients can ‘borrow’ hours from future months. Of course, that’s only possible with a commitment by the client to continue honoring the retainer for those months in which hours were borrowed.
5. Accounting for Roll-overs
In any given month, you might not have to work the full amount of hours allotted on the retainer. At the same time, your client is still paying for those hours. That’s why the agreement should include a specific mention of what happens to unused hours.
Some agencies decide to forego the hours, requiring clients to pay the full retainer regardless. More often, the hours roll over into the next month and keep rolling for a pre-set period of time. Setting that rule and timeline in the agreement avoids confusion later on.
Pricing On-Retainer Work as a Web Developer
Compared to other web services, the price for a web maintenance retainer tends to be relatively low. Most agencies following this model charge between $200 and $600 per month and website, depending on both the number of hours and the level of tasks involved. The size and complexity of the site also play a role in that price.
Arriving at that price begins with the hourly rate you typically charge for web work, then standardizing it over a set amount of hours at a discounted rate. If, for instance, you typically charge $70 per hour, a retainer that covers 10 hours per month might be available for $500 (which averages to $50 per hour).
Over time, it makes sense to adjust the retainer agreement to more accurately represent the value that your work adds to the business. That might include increasing or decreasing the number of hours on the retainer based on time investment, as well as the hourly rate based on the complexity and speed of tasks required.
Once you settle on a price you can charge your clients, you have to demonstrate that the client’s monthly payments consistently generate value on their behalf. At UnlimitedWP, we do the following to demonstrate on-retainer web development value:
- We put the client’s website on a paid site monitoring tool, looking for fluctuations in uptime and server response speed. We get immediate downtime notifications so we can instantly work out the issue with the host.
- We send monthly reports to the client showing uptime, Google Analytics, and general recommendations for keeping the website up-to-date.
- On the 20th of each month, we check the client’s used hours for that month and make further recommendations based on their usage. This is where we can suggest further enhancements or scale down the retainer if necessary.
How Do You Pitch Retainer Agreements to New Clients?
The best time to pitch the retainer agreement is early in your relationship with a new client. If you wait until the project is nearly complete, you run the risk of underselling its importance and not inspiring your client’s trust.
As long as the client’s long-term plans hinge on monetizing their website, there is room for a retainer agreement to ensure that the site performs according to its users’ expectations. When bringing up the potential to perform updates and offer post-delivery technical support, the key is to focus on the fact that you are adding value to their business.
Many clients will object at first. Frequently, clients will ask if you offer ongoing support without a monthly retainer, and ask what the difference is. The answer is simple – although you can offer ongoing support without a monthly retainer fee, without setting resources aside for the service you cannot guarantee a fast, professional response for every single one of the client’s concerns.
By presenting the web agency retainer fee as a value-added monthly cost that can help boost website profits, you will have a much easier time getting new clients on board.
How to Pitch Website Care Plans to Your Existing Clients?
In many ways, pitching to existing clients is more straightforward than getting new clients on board. They have already seen your skill and value and tend to be more agreeable to having their maintenance performed by the same company that built the website in the first place.
Begin by contacting clients for whom you’ve recently completed web work. Explain the retainer model to them, along with the types of tasks you can complete as part of the agreement. Don’t be afraid to directly compare this service to typical, one-off maintenance, focusing especially on the speed of work and potential cost savings of the retainer.
Here, WP care plans with little to no commitments will become especially valuable. They help you communicate the fact that this type of agreement is, first and foremost, based on client value. Rather than locking in your clients long-term, you exchange security for a greater amount of businesses signing up to try it out.
How to Get Started in Building a Website Maintenance Retainer?
The challenge is clear. To successfully employ a retainer model, you need to leverage mutually-beneficial advantages for your business and your clients, while at the same time navigating and minimizing the potential drawbacks this business model brings with it.
That starts with understanding your capacity for offering web care plans to your existing and new clients. A partnership with UnlimitedWP could be invaluable here.
Our services are designed to help digital and web development services streamline their clients’ web maintenance needs. For instance, you could offer a $199 website care plan to five of your clients. For every five clients, you can buy one of our UnlimitedWP plans to fulfill requests for each of them on an as-needed basis.
You pay less for our white label WordPress support retainers than you charge five of your clients, thanks to economies of scale. As a result, you can offer retainer plans and optimize your revenue without putting a strain on your resources or distracting from your larger development projects.
Beyond understanding and optimizing your capacity, you need to know how to build a retainer. The above information helps, but we also encourage you to download our free retainer template. That incorporates all of the above points, providing you a ready-made framework for any work you complete on your clients’ behalf.
The advantages of web maintenance retainers are clear. Is your company ready to take advantage of it and reduce its revenue reliance on large, one-off projects? Now is the time to get started.
All of these services provide value to clients. Make the proposal early on and educate your clients to determine which services they will need you to continue performing after the website is live and you have a recipe for a long-lasting, mutually beneficial customer relationship.