For all of the 13 years I ran my agency, we had zero recurring revenue.
Zero.
Every single month, we started on the 1st by resetting our revenue and restarting the sales process that took us from zero to £220K months.
Today, 80% of my revenue is recurring on multi-month contracts. I tell every agency owner I work with that fixing the revenue model is usually the highest-impact task we can tackle. One client went from £26K monthly revenue to consistently over £50K in six months. Same work. Different structure. Another covers 140% of business costs on the 1st of the month, every month. That’s a gold medal position to scale from.
What project-only revenue actually looks like
It’s the 28th of the month. You’ve hit your target. Feels good.
Then you wake up on the 1st.
Revenue: zero. Pipeline: whatever’s sitting in your inbox. Confidence: somewhere between cautious and terrified.
You spend the first week of every month scrambling. Chasing proposals. Following up on leads. Trying to close something so you can cover payroll.
By week two, a project comes in. Grand. Now you need to deliver it, scope it, brief the team. Selling never really stops though.
By week three, you’re back grinding in sales because you can already see next month’s gap forming.
That cycle is brutal. And it creates problems everywhere.
You can’t staff properly because you don’t know what’s coming. Hiring is a gamble because you can’t predict capacity beyond 30 days. You discount to close deals faster, which kills your margins. And if an exit is on your radar, valuation takes a hammering because buyers pay a premium for predictable revenue.
Agencies with 70% or more recurring revenue typically sell for 6 to 8 times EBITDA. Agencies with mostly project revenue? 3 to 4 times. Same profit. Half the exit value.
Now, a lot of you think you’ve solved this because you have “retainers.” But your retainers probably aren’t recurring revenue. They’re monthly projects that never end. The scope changes weekly. The pricing is historical. Delivery is reactive. Renewals are implied, not earned.
That’s not a revenue engine. That’s an ongoing negotiation.
The three layers
There are three layers to a real recurring revenue engine. You probably only have the first one, which is why churn and margin problems keep showing up.
Layer 1: The contract
The contract is the bare minimum. It doesn’t create retention on its own. But without it you have no guardrails.
Here are four things your contract needs.
Minimum term. Three months absolute minimum. Six or twelve months preferred. If a client won’t commit to three months, they’re probably not the right fit for retained work. They’ve one eye on the exit and this doesn’t breed trust.
Notice period. 30 days minimum. This gives you a buffer. You see churn coming before it hits your bank account.
Payment in advance or automated. Never chase retainer invoices. Set up direct debit or take payment on the 1st. If they’re paying in arrears, that’s a project, not a retainer. By the 5th of the month, if payment isn’t in, you pause work and redistribute resources. There’s little risk to you.
Clear boundaries. What’s included, what’s excluded, what costs extra. This is where it falls apart for nearly everyone. You sell a “retainer” but you never define the edges. So the client brings random priorities, scope creeps in quietly, and six months later you’re doing twice the work for the same fee.
Write your boundaries on one page. Literally one page. What you deliver each month. What the client is responsible for. What triggers additional charges.
If you can’t explain your retainer in one sentence, it can’t be sold, staffed, or valued properly.
Layer 2: The delivery rhythm
This is the layer nearly everyone skips. And it’s the reason clients leave.
A contract reduces uncertainty. It doesn’t create retention. What creates retention is recurring moments of value. The client needs to feel, every single month, that you’ve delivered something meaningful. Not just activity. Outcomes.
Here’s a simple monthly cadence that works time and time again.
Week 1: Planning and priorities. You meet with the client, 30 minutes maximum, and agree on this month’s three priorities. Not a list of 47 tasks. Three priorities that will move the business towards their commercial goals.
Week 2: Execution and iteration. You do the work. The client sees progress midway through, not at the end. Show them something in progress. It builds trust and kills the “big reveal” risk.
Week 3: Reporting and insight. You report on results from last month’s work and current progress. This is where you earn the right to next month’s fee. Don’t just send numbers. Explain what the numbers mean and what you’d recommend changing.
Week 4: Strategy and next month commitment. You present next month’s priorities. The client signs off. You’re already planning before the current month ends.
Weekly updates. I have one client where at 10am every Monday morning, all client-facing team members down tools and send their clients a status update email. What we’re working on, what we will supply this week, and what we need from the client to complete this.
The worst thing you can ever hear from a client is “where are we with XXX?” That weekly email puts the ball back in their court. Fewer emails from the client, more time working on the project.
This four-week rhythm does three things. It makes the client feel like they’re getting value every week, not just at month end. It gives you natural checkpoints to manage scope. And it makes renewal a non-event because the client is already committed to next month before this one finishes.
I have worked with multiple agencies who introduced delivery rhythms. Client retention went from about 60% to over 85% annually. Not because the work got better. Because the client experience got more consistent.
Layer 3: The commercial staircase
This is where real growth comes from. Not chasing new leads, although that’s important. But by growing the clients you already have.
The commercial staircase is a path from starting out to serious business. It has three tiers.
The entry point. Your lowest-commitment retained offer. An audit. A monthly review. A specific, contained service. The price should be low enough that the decision is easy but high enough that you’re not losing money. For most creative agencies, that’s £1,500 to £3,000 a month.
The purpose of this tier isn’t just profit. It’s proof. You’re proving you can deliver consistently, that you understand their business, and that working with you is straightforward.
The operator layer. Your core retainer. Full execution on a defined scope. Monthly cadence, clear deliverables, regular reporting. This is where your margins live. For most agencies, £3,000 to £5,000 a month.
The move from entry point to operator layer should happen naturally. After three to six months, the client sees results and wants more. You don’t pitch it. You present it as the logical next step based on what the data is showing. But don’t move from one step to the next without increasing the price. Your ability to spot and stop scope creep here is key.
Many of my clients use this as the trojan horse to get bigger and more profitable project work alongside moving up the commercial staircase.
The growth layer. This is strategic partnership territory. You’re involved in planning, not just execution. You have a seat at the boardroom table and your input shapes the commercial results of the organisation. £5,000 to £10,000-plus a month, depending on your specialism and the client’s size.
Not every client will reach that level. And that’s fine. But every client should have a visible path from where they are to where they could go. It’s your job to map this out and to continue adding value at each level.
The critical piece: you need two to three upgrade triggers defined in advance. Not “when the client feels ready.” Specific, measurable triggers. Like: “When monthly traffic exceeds X, we recommend adding conversion optimisation.” Or “When you’re running campaigns in more than three channels, the management layer becomes necessary.”
If you don’t build the staircase, you force the client to re-decide you every month. And eventually, they’ll decide to try someone else.
Packaging it together
Packaging your service into retainer tiers isn’t marketing. It’s an operations control system.
When your service packaging is weak, clients bring random priorities, your team context-switches, scope creeps in, margins leak, and churn arrives “unexpectedly.”
Here’s the bare minimum. Eight fields on one page.
- Offer name
- Who it’s for
- The outcome the client gets
- Inputs required from the client
- Cadence
- Boundaries (what’s in, what’s out)
- Price and term
- Upgrade triggers (when they move up the staircase)
If you can’t fill in all eight for your core retainer, you don’t have a package. You have an arrangement. And arrangements don’t scale.
A client story
One of my coaching clients had a project client who’d been working with them for years. Every couple of months, a new brief would land. Website update, a campaign, some branding for a sub-brand. Good work, decent fees. Standard enough story.
But the gap between projects was killing them. They’d finish one job, send the invoice, and then hear nothing for eight or ten weeks. They’d allocate resource elsewhere expecting no new project, then drop everything when another job came in.
I made a suggestion. What if we pitched a retainer. Not a discount. Not “pay us less per month for the same work.” A properly structured retainer with monthly priorities linked to the commercial ambitions of the business, a fixed scope, a fixed price, and a notice period.
The client thought they’d say no at best and ruin the relationship at worst.
They said yes in about ten minutes. Turned out, the gaps between projects were annoying them too. They wanted consistency. They just didn’t know how to ask for it.
That was the first one. Within six months, they’d moved four more clients onto the same structure. The feast-or-famine cycle smoothed out. December stopped being a near-death experience. And the conversations changed. Instead of “can you do this project for us?” it became “what should we focus on this month?”
What to do this week
Write down your current core retainer on one page. Offer name, who it’s for, outcome, inputs, cadence, boundaries, price and term, upgrade triggers. Fill in every field. If you get stuck on any of them, that’s telling you something.
Then answer one question honestly: how many of your current clients, if forced to decide today, would renew for another 12 months?
That’s your renewal intent score. Track it monthly.
The gold medal position with retainers is that your expenses are covered with recurring revenue. This stability is the platform for growth and the core focus if you want to scale or exit your agency.
If you want to see how your recurring revenue model affects what your agency could be worth, take the free Agency Valuation Assessment. It takes about 10 minutes and gives you a clear picture.