For most of my agency’s existence, we had zero recurring revenue. Every month started on the first by resetting the counter to zero. While you can see the obvious flaw in this, it meant our client acquisition had to be robust and always on. That is not a business model. That is a treadmill.

Today, I work with agency owners who are in the same position. They are doing great project work, winning clients, building a reputation. But every month is a scramble because there is no revenue floor. Nothing is guaranteed. Everything depends on what you sell this month.

The fix is not complicated. It is a structural change to how you sell, what you deliver, and how you price your services. Here is the system.

Why Recurring Revenue Changes Everything

The single most important number in your agency is not revenue. It is recurring revenue as a percentage of your fixed costs.

If your monthly fixed costs are £15,000 and your retainer base covers £12,000, you only need to sell £3,000 in project work to break even. That changes every decision you make. You stop taking bad projects out of desperation. You stop discounting to win work. You negotiate from strength instead of fear.

Recurring revenue also transforms your valuation. A project-based agency with £500,000 in annual revenue might sell for 2 to 3 times adjusted net profit. The same agency with 60% of that revenue on 12-month contracts might sell for 4 to 6 times. Buyers pay a premium for predictability.

The Recurring Revenue Floor

Think of recurring revenue as your floor, not your target. It covers your fixed costs so that everything above it is profit from project work. The goal is to build the floor high enough that you never have a month where covering payroll depends on closing a deal this week.

Revenue floor targets by stage:

Most agencies I work with start below 30%. Getting to 60% typically takes 6 to 12 months of focused effort.

Layer 1: Contract Structure

The first layer is how you structure your agreements. This is where most agencies leave money on the table.

The Retainer Tier Model

Not all retainers are equal. If you offer one vague “ongoing support” package, you will have clients expecting strategy at maintenance prices and you will be overdelivering within the first month.

Separate your offering into two tiers.

Support tier (maintenance): Reactive work. Bug fixes, small updates, content changes, keeping things running. Lower price point. No strategy, no accountability for growth. You fix what breaks and keep the lights on.

Scale tier (strategy): Proactive work. Monthly reviews, performance reporting, strategic recommendations, improvement roadmap, accountability for results. Higher price point. You are on the hook for things getting better, not just staying the same.

Typical pricing:

The distinction matters because it gives you language. When a Support client asks for strategic input: “That’s included in our Scale tier.” When a Scale client asks for a complete rebuild: “That’s a separate project.” Clear boundaries prevent scope creep from both directions.

The Price Increase Trigger

When you reach 10 clients on a tier, increase the price for new clients. Grandfather existing clients at their current rate. This creates natural price progression, rewards early adopters, and adds mild urgency for prospects considering your proposal.

Contract Length

Start with rolling monthly contracts. Annual contracts are better for your valuation and cash flow, but they are harder to sell to new clients. Once you have been delivering for 6 months and the client trusts you, offer a 12-month contract with a small discount (5 to 10%). Most will take it. The certainty benefits both sides.

Layer 2: The Workstream-First Sales Approach

This is the part most agencies get wrong. They try to sell retainers to new clients on the first conversation. The client has never experienced your work. Asking for a recurring commitment feels like a big decision. The sales cycle drags.

Flip the sequence. Sell a defined project first. Then transition to a retainer.

How the Workstream-First Model Works

Step 1: Sell a workstream. A focused project that fixes the client’s most pressing problem. Price it at £2,000 to £3,000. Scope it clearly. Complete it in 2 to 4 weeks.

Step 2: Deliver it well. This is your audition. Meet the deadline. Communicate clearly. Deliver exactly what was scoped.

Step 3: Transition to retainer. “We’ve fixed the fundamentals. To maintain this and keep improving, we recommend our monthly support plan.” The conversation is natural because the client has already experienced your work and seen the value.

Why This Works Better

Leading with a retainer creates a month-one overdelivery problem. You sell the retainer, then spend the first month doing foundational work that should have been a separate project. The client sees a busy first month and expects the same every month. You have set an unsustainable precedent.

Workstream first solves this. The foundation work is scoped and priced as a project. The retainer starts clean, maintaining something worth maintaining. Expectations are set correctly from day one.

The Numbers

A typical workstream-to-retainer conversion looks like this:

Those numbers compound. By the end of year two, your retainer base can be covering your entire overhead.

Layer 3: The Delivery Rhythm

Recurring revenue only works if the client stays. Retention is the delivery team’s responsibility, not the sales team’s.

Monthly Touchpoints

Every retainer client should hear from you at minimum once per month beyond the operational work. For Support clients, this can be a brief check-in email. For Scale clients, this should be a structured monthly review.

The monthly review structure (Scale tier):

  1. What we delivered this month (5 minutes)
  2. Results and metrics (5 minutes)
  3. Recommendations for next month (10 minutes)
  4. Questions and priorities (10 minutes)

Total: 30 minutes. Block it in the calendar. Do it every month without fail.

These reviews do three things. They demonstrate ongoing value, which prevents the “what am I paying for?” conversation. They surface new opportunities, which leads to upsells and additional projects. And they give you early warning of problems, which prevents churn.

The Monday Morning Email

Every Monday morning before 9am, send each active client a short email covering what is happening this week, when to expect contact, and what you need from them. This single habit eliminates the majority of reactive “just checking in” queries and makes clients feel managed rather than forgotten.

For the full system, read the weekly client email guide.

Quarterly Business Reviews

For your top clients (highest revenue, highest potential, longest relationships), run a quarterly review that goes beyond operational updates. Discuss their business goals for the next quarter. Ask what is changing in their market. Identify where your services can support their priorities.

These conversations generate three things: referrals (because you are front of mind), upsells (because you understand their needs), and loyalty (because you care about their business, not just the retainer fee).

Converting Existing Project Clients

You do not need new clients to build recurring revenue. Start with the clients you already have.

The Post-Project Transition

After every completed project, have this conversation: “We’ve built this for you. To maintain it and keep improving it, we recommend our monthly support plan.” Do not let the project end and the relationship go cold. The transition window is the first two weeks after delivery, when the client is happiest with your work.

Reactivating Dormant Clients

Pull a list of every client you have worked with in the last 2 years who does not currently have a retainer. Call them. Not to sell. To check in. “How is the [thing we built] performing? Is there anything that needs attention?”

Half of those conversations will reveal work that needs doing. Some of that work becomes a retainer. At minimum, you are back on their radar.

Upselling Within Retainers

One of my coaching clients discovered that their existing clients had no idea about half the services they offered. The month before I exited my own agency, a long-term client showed me their new brand. They had no idea we offered branding. They had been buying print from us for years.

Do not assume your retainer clients know your full offering. Include a “Did you know?” section in your quarterly reviews. Mention adjacent services when relevant. The easiest sale is to someone who already trusts you.

Common Mistakes

Starting Retainers Too Cheap

Agencies often price retainers low to “get the client on board” with the intention of raising prices later. Later never comes. You are stuck delivering at a rate that does not cover your costs, and the client pushes back hard when you eventually try to increase.

Price correctly from the start. If the retainer needs to be lower for the first 3 months as an introductory rate, say that explicitly in the proposal. “Introductory rate of £X for months 1-3, moving to £Y from month 4.” Put it in writing.

No Scope Boundaries

A retainer without clear scope is an invitation for unlimited work. Define what is included, what is excluded, and what happens when the client requests work outside the scope. “Additional work is quoted and invoiced separately.” That sentence in your contract prevents months of resentment.

Measuring Revenue Instead of Profit

A £1,000 per month retainer that takes 40 hours to service is worse than no retainer at all. Track the hours spent on each retainer client. Calculate the effective hourly rate. If any retainer is unprofitable, either reduce scope, increase price, or have the conversation about restructuring.

Neglecting Retention

Winning a retainer client is half the work. Keeping them is the other half. The agencies that churn retainer clients do so because they stop actively delivering value after month 3. The reviews stop. The recommendations dry up. The client starts wondering what they are paying for. Keep the delivery rhythm going every single month.

Building Your Recurring Revenue Plan

Month 1: Audit and Design

  1. Calculate your current recurring revenue as a percentage of fixed costs. This is your baseline.
  2. Design your two retainer tiers (Support and Scale). Define scope, pricing, and boundaries for each.
  3. Identify 5 existing project clients who could transition to a retainer this month.

Month 2-3: Sell and Convert

  1. Contact the 5 identified clients. Use the post-project transition conversation.
  2. For every new prospect, use the workstream-first approach. Sell a project, deliver it, then propose the retainer.
  3. Track conversion rates from workstream to retainer.

Month 4-6: Scale and Systemise

  1. Build the delivery rhythm: monthly reviews for Scale clients, Monday emails for all clients.
  2. Hire or assign an account manager to own the retainer relationships.
  3. Set a target: recurring revenue covers 60% of fixed costs by month 6.

Month 7-12: Compound

  1. Every quarter, review retainer profitability. Adjust pricing where needed.
  2. Offer annual contracts to clients who have been on retainer for 6 months.
  3. Keep adding new retainer clients through the workstream-first pipeline.

By the end of 12 months, your agency should have a revenue floor that covers the majority of your fixed costs. That is the point where the stress drops, the decisions improve, and the business starts to feel like something you own rather than something that owns you.

What to Do This Week

  1. Calculate your floor. Total monthly retainer income divided by total monthly fixed costs. Write down the percentage. That is your starting point.
  2. Design your tiers. Write a one-page description of your Support and Scale tiers. Include what is in each, what is excluded, and the price.
  3. Call one client. Pick one recent project client and have the transition conversation. “We’ve delivered [project]. To maintain and improve it, here’s what we recommend.”

Further Reading

For the pricing models that support recurring revenue, read the agency pricing models guide.

If cash flow is the bottleneck rather than recurring revenue structure, see how to improve cash flow in your agency.

Take the free Agency Valuation to see how your recurring revenue and revenue predictability score against the 7 factors buyers evaluate. Recurring revenue is one of the strongest drivers of your valuation multiple. It takes 3 minutes.

If you want structured support to build recurring revenue and fix your commercial model, the Strategic Growth Programme covers contract structures, pricing, and retention systems over 12 months. Book a discovery call to discuss where you are.