How do you define success as a no-code freelancer or agency?
Is it getting the maximum number of clients that your schedule can handle? Or the highest paying clients you can reach for? Is it shipping great work consistently? Or building a highly efficient team?
It’s probably all of those things – but if you’re looking at sustaining that great team, to serve those awesome clients, to build those stunning products, you need this one important thing: Recurring revenue.
An often overlooked aspect of business success is not just how much a client pays – but how much revenue comes in consistently. Recurring revenue is the amount of money a freelancer or an agency receives on a regular basis, typically on a monthly or annual basis. It comes from customers who have signed up for a service or product that is billed at regular intervals.
In short, it’s the predictable and steady stream of income that you can rely on to help plan for the future. Examples of recurring revenue include subscription services, membership fees, and recurring payments for products or services.
Recurring revenue is important in a mobile development agency
First, it provides a stable and predictable income stream. This allows you or your agency to better plan for future projects and expenses, as well as invest in the growth of the business. This could mean expanding your tech stack, or hiring a virtual assistant to manage communications.
Second, recurring revenue can also increase the lifetime value of a client or customer, as they continue to pay for the services or products that you offer on a regular basis. This can be an ongoing app maintenance fee, or expanding the feature set over time. Increasing lifetime value leads to increased client retention and loyalty, and ultimately, more revenue in the long-term.
The price is right (or at least, it should be!)
We can’t talk about revenue before we first tackle the issue of pricing! Pricing is a crucial aspect of running a mobile app development agency. Setting the right prices for your services can help to attract and retain clients, and it keeps your agency profitable. Here are some things to remember when setting your pricing.
- Understand your costs: This includes the cost of developing apps (subscriptions, tools, etc.) along with any other costs that may come up, like salaries, outsourcing, or rent.
- Know your target market: It's important to have a clear understanding of your target market and what they are willing to pay for your services. Conducting market research can help you to determine the average prices for app development services in your area.
- Set competitive prices: While it's important to ensure that your agency is profitable, it's also important to set competitive prices. Pricing your services too high can make it difficult to attract and retain customers, while pricing them too low can lead to financial losses.
- Offer different pricing options: Offering different pricing options, such as different levels of service, can be a great way to attract a wider range of customers. For example, you could offer a basic package for those who only need a simple app, and a premium package for those who need more advanced features and functionality. (More about this later on!)
- Be transparent: Be transparent about your pricing and be willing to explain the costs associated with each package. This can help to build trust with potential and makes it easier for them to understand why your prices are set the way they are.
A step-by-step guide to recurring revenue
We don’t need to work too hard to build a case for why you should prioritize recurring revenue – it’s one of those things that everyone wants, but not everyone knows how to make it happen. So without wasting any time, let’s talk about how to get that recurring revenue!
Step 1: Determine your value proposition
Spend time thinking about all the possible win-win scenarios there are for you and your clients. What value can you bring to them in the short, medium, and long term. If you want recurring revenue, your client may want a sense of security that their app will keep working, improve, and if there are issues someone can jump in and save the day!
The best way to do this is to provide options. Everybody loves options! Craft a few service offering packages so clients are not confronted with a yes or no question.
Step 2: Craft your service offerings
Here are some examples to use as a starting point:
The objective: Keep all apps running smooth
Services might include
- Hosting the app
- Paying for Adalo, Zapier, Xano, etc
- App maintenance
- Problem shooting
- Bug fixes
The objective: The app should be continuously improving
Services might include
- A new yearly version of the app
- X number of hours of development a month
- XX hours turn around time of services
The objective: Acting as a remote dev and research team
Additional services might include
- Run surveys of clients / NPS
- Run analytics reports
- Conduct user research and incorporate insights into app build
Step 3: Assess how clients respond
Positive feedback is always the best indicator of whether you’re headed in the right direction. It may take some trial and error to craft the best packages that guarantee value for the client and recurring revenue for you.
Measure conversion rate of different packages and interview clients to find out what they want, what they are willing to pay for, and then offer it to them.
Step 4: Be patient
Running an agency requires more than just good technical skills or time management. It needs the right temperament. Patience is key when it comes to recurring revenue. It takes time to build a good, long-standing relationship with clients. Don’t get disheartened!
Perhaps your recurring revenue app maintenance bundle is just a few hundred USD a month. It might not be a huge amount of money from one client, but imagine if you had every client you work with paying this package? That’s what you’re working towards!
There has never been a better time to become a no-code freelancer! Recurring revenue isn’t just good for you, your agency, or your staff – it’s good for your clients too. It gives you a predictable and stable income stream, helps with client retention, and allows for more strategic planning and investment in new business initiatives to better serve your clients.
By offering services that bring value to clients on an ongoing basis, such as maintenance and support, you can differentiate your agency from your competitors and secure a long-term and mutually beneficial relationship with your clients. As the business world continues to evolve, agencies that embrace recurring revenue models will be well positioned to thrive for the long haul.