I am thinking about recurring revenue possibilities and would like to see your thoughts on that sometime. Especially residential and small business clients. What services/peace of mind will they pay for monthly and how much?
This has been something on my mind recently as well, so I thought it would be a great opportunity to kick around some ideas for recurring revenue opportunities and get your thoughts as well.
Why Recurring Revenue?
Work as a consultant can be sporadic and unpredictable. Without rhyme or reason you can go from hardly any work to being drowned in requests and then back to nothing. Because of this, it can be hard to budget your money or predict your future revenue. Consultants live under the constant threat that the floor can fall out from under their thriving business at any moment.
With recurring revenue, that is revenue that comes in at a predictable and consistent schedule, you can alleviate some of this anxiety. Having some steady regular money means you can continue to have the freedom that independent consulting gives you along with the piece of mind that a regular paycheck provides. For this reason, recurring revenue is an important part of any computer consultant’s arsenal.
How do you go about getting your customers to pay you on a predictable schedule? After all, computers don’t break at fixed intervals. Here are some ideas.
Computer Maintenance Plan
A computer maintenance plan can be monthly, quarterly, yearly, or whatever frequency you and your customers agree upon. You’ll basically perform a predefined series of tasks designed to keep the customer’s systems running in top shape. This can mean running tune-up software like defrags and registry cleaners. You may also want to update drivers, make sure all the latest patches are installed, and run some virus scans. It’s up to you and your customer. The biggest thing to remember here is that these tune-ups will happen on a regularly scheduled interval.
For residential customers, backups to the cloud offer the protection of offsite replication with minimal intrusion. The best way to get a small recurring paycheck from these backups is to become a “white label” affiliate for a cloud backup provider. White label just means that you’re able to put your branding on the software so it looks like it’s being provided directly by your company. You’ll then receive a percentage of the monthly fee that your customer pays for the service. Get enough of your customers signed up with your white label backups and you’ll have a nice passive stream of supplemental income coming in. If you’re a member of the Association of Computer Repair Business Owners (ACRBO), they have a couple good preferred vendors that provide white label builds.
This is a burgeoning industry in the computer consulting field, and a trend that you may want to include yourself in. In my recent interview with Mike Hurst of Mouse Mate, he told me that he was targeting this niche specifically for his small business clients. This is the perfect opportunity for recurring income because computers will inevitably get dirty. This is especially good for offices that have shared computers.
Block of Hours
Some service providers offer pre-purchased blocks of hours at a discounted rate. This is perfect for those customers of yours that seem to call multiple times a month. Simply create a few tiers of service blocks, maybe 3, 5, and 10 hours a month. Sell them ahead of time, maybe even in bundles of 6 months or a year, and offer a good discount over your regular hourly rate. The discount will be made up by the fact that you have a guaranteed stream of income from these clients. If they don’t use the allotted blocks of time, offer to come make a visit to perform a computer tune-up or computer cleaning. I wouldn’t recommend rolling the time over to the next month because the customer may end up accumulating more time than you have to give them.
The way to make this work is to show your customers that this is a valuable investment. In the question at the beginning of the article, the reader mentions “peace of mind”. That’s exactly how you’ll need to market these services. Preventative maintenance is important to avoid catastrophe later on. I’m not saying that you need to be a fear monger and make your clients afraid of touching their computer without calling you, but it is your job to educate them as well as make them aware of your services.
The reader also asked about pricing. My advice is to make the prices a good deal less than what it would cost for the one-off service. So say, for example, that you normally charge $80 for a computer tune-up. If your customer signs up for a monthly computer maintenance plan, you may want to charge them $40/month for the service. This may seem like a larger than normal discount, but again, this is guaranteed money and you want to give your customer an incentive to buy it.
Ideally you’ll want to include all of these techniques in your catalogue of service offerings. Recurring revenue is the lifeblood of a consulting business and can help you survive the lean times.
Do you offer any services that bring in recurring revenue that I haven’t covered? Let us know in the comments!