Quick Summary: In addition to the potential for increased revenue, digital agencies could reasonably generate an additional $5,000 per month in profit from the sale of white-label WordPress maintenance contracts to 35-45 sites at either $99 or $249 per month (with a wholesale cost of $55 to $65) for each site. There are three quickest methods that will allow you to achieve your goal; create bundled maintenance packages as part of all future website builds, offer complimentary site health checks to former customers to encourage them to come back into service, and develop multiple tiered pricing options for your customers.
If your agency is entirely dependent upon project-based revenue, then you are likely familiar with the cycle. A high-growth period includes three or four large projects. Then comes the lean time; no new business in the pipeline. Your agency will be working hard to find the next signed contract. Your cash flow is extremely unreliable. The utilization of your teams will fluctuate wildly from being completely overworked to having nothing to do. Long-term planning may feel like throwing darts at a dartboard.
Maintenance can help stabilize the equation. Maintenance does not eliminate the need for project-based work. It provides a stable source of monthly recurring revenue. This allows your agency to pay its fixed costs. With this level of stability, your agency can now make informed, data-driven decisions when it comes to hiring staff, investing in marketing efforts, and creating a plan for growth.
The greatest advantage of using maintenance revenue as a means of creating a steady stream of income is that you don’t necessarily need to create an internal maintenance department to generate this type of revenue. White label partnerships allow you to offer maintenance services through your company’s branding while allowing a white label service provider to handle the actual technical aspects of delivering these services. Below is a description of how the numbers add up for reaching $5,000 per month in maintenance revenue and some tips for selling maintenance to customers who have previously never been interested in purchasing such services.
The Problem: Project Revenue Is Feast or Famine
Many digital marketing firms are also structured as project-based businesses. This means that the client will pay anywhere from $10,000 to $50,000 to have a website built. This can take anywhere from two to four months. Once the website is launched the project is complete and so is your time with that client. Possibly you may get a smaller project back from them 6 months after the launch. Or possibly they disappear completely.
The Project Model has three structural flaws that create problems for how we run our businesses:
Irregular Cash Flow: Your cash comes in irregularly in big clumps; last week you got paid $40,000 and this week you’ll be lucky if you see $8,000. However, your fixed costs remain constant (your rent does not go down just because less money came in).
High Client Acquisition Costs: In order to earn the first dollar of revenue, you must find, pitch and win a new client/project. Therefore, since your clients/projects come and go at varying times, each dollar earned through this process will require the same high level of effort to acquire again. When you do not have some form of repeat/recurring income stream, you cannot use these dollars toward acquiring additional clients.
Short Client Lifetime Value: Since a single project results in a single payment, once the project is completed you never hear from that client again. All of the credibility/trust/relationship-building work done by you during the length of the project goes out the window.
Maintenance revenue directly addresses all three. It is predictable (same amount every month), efficient (no re-selling required once the client is on a plan), and sticky (clients on maintenance plans stay for years, not months).
The Maintenance Revenue Model
This is how the white label plan for maintaining wp sites works:
- Clients purchase a wp maintenance plan from you at a price you determine. Typically the monthly cost of wp maintenance will be in the range of $99-$249 based upon what services are included and/or the number of clients involved.
- A “white label” partner (such as Deutrix Care), performs all of the technical wp maintenance that you need done on your behalf at a lower wholesale price, usually around $55 to $75 per site, per month based upon volume.
- You take the remainder as revenue/profit.
You do not have to worry about inventory; you do not have to hire any more employees; and you do not have to spend money on new tools or equipment.
The Math: Building Your Revenue Base
Let us walk through three realistic scenarios.
Starter: 10 Client Sites
| Item | Amount |
|---|---|
| Client price | $149/month |
| Monthly revenue | $1,490 |
| Wholesale cost ($65/site) | $650 |
| Monthly profit | $840 |
| Annual profit | $10,080 |
Ten sites is achievable for almost any agency. If you have built ten or more websites in the past two years, you already have a client base to sell into.
Growth: 25 Client Sites
| Item | Amount |
|---|---|
| Client price | $149/month |
| Monthly revenue | $3,725 |
| Wholesale cost ($60/site) | $1,500 |
| Monthly profit | $2,225 |
| Annual profit | $26,700 |
At 25 sites, you are generating meaningful recurring revenue with improving margins thanks to volume discounts. This is enough to cover a junior team member’s salary or fund your marketing budget entirely from maintenance profits.
Scale: 40 Client Sites
| Item | Amount |
|---|---|
| Client price | $149/month |
| Monthly revenue | $5,960 |
| Wholesale cost ($55/site) | $2,200 |
| Monthly profit | $3,760 |
| Annual profit | $45,120 |
And if you offer tiered pricing with some clients on higher plans at $199 or $249 per month, reaching $5,000 in monthly profit from 35 to 40 sites is very realistic.
Getting to $5K per Month
Achieving $5,000 per month in maintenance profits is not a pipe dream. This goal will require anywhere from 35 to 45 client sites dependent upon your pricing model and your wholesale costs. Below are the strategic methods for achieving this goal.
Include Maintenance with every Build. The easiest client to sell on maintenance plans is typically the client who has recently purchased a new site developed by your agency. Include a maintenance plan with each new build project proposal and position the inclusion of this plan as a standard service (i.e. “every site we develop includes an ongoing maintenance agreement to ensure the security, performance and up-time of the site”). Make opting out of the included maintenance plan the exception rather than the rule.
Reach Back into Your Back Catalog. Every site that your agency has developed over the last three to five years is a potential sales opportunity. The fact that these clients have previously trusted your agency to develop their website provides you with a strong foundation for converting these clients into maintenance clients. Many of these past clients are currently using outdated versions of WordPress along with potentially vulnerable plugins and no backup process for their website. A simple e-mail or phone call explaining the risk associated with maintaining an un-maintained website can create opportunities to convert 5-10+ clients through a single marketing campaign.
Upsell Existing Clients. If you have a client on a basic level maintenance plan, educate them regarding the additional benefits of upgrading to a premium plan. For example, if they receive a monthly report identifying slow loading issues then a natural discussion regarding optimizing their websites performance begins. If your company identifies and resolves a security issue prior to impacting their business operations, then this is an excellent reason to provide the client with options for upgrading to a plan that offers more active monitoring services.
Offer tiered pricing. Your customer does not need to have a $249/month website maintenance plan. Create three (3) tiers for your customer base:
- Essential ($99/month): Daily Backups; Uptime Monitoring; Monthly Report; Updates.
- Professional ($149/month): Everything in Essential but also includes Security Hardening; Performance Monitoring; Support Time (30 min).
- Premium ($249/month): All of the above as well as Priority Support; Quarterly Website Performance Audits; Support Time (60 min).
You will be able to sell customers at all budgets using this method. You are creating an easy way for your customer to move up to higher priced optionsYou will be able to sell customers at all budgets using this method. You are creating an easy way for your customer to move up to higher priced options.
Package with other services. Many of these maintenance plans go hand in hand with SEO, content marketing, email marketing and/or hosting. Agencies that offer “Website Care + SEO” as an option for $399/month can create a much stickier offering then they would have been able to if each was offered separately.
How to Sell Maintenance to Existing Clients
Most agencies are having difficulty selling maintenance services to current customers due to them not having ever differentiated maintenance as a separate service. Below is an outline to help you sell maintenance to current customers.
Emphasize risk vs. Features. customers will not care about “plugin updates,” “daily backups” etc. Because those are just generic words. They will care if their website goes down, gets hacked, loses its ranking with Google, or has speed issues because their website is slow. Emphasizing what the maintenance service does (prevents) is key.
For Example: your website is currently using three plugins that have known security risks. If you don’t take action (maintain), any one of these three plugins can be compromised resulting in malware, loss of data, or your website being blacklisted by Google. Our maintenance service removes that risk.
Use their own website data. prior to meeting with your customer to discuss maintenance services, perform a quick review of their website. Document the wp version, outdated plugins, missing security headers, slow page loads, and backup lapses. Present these items as a free web health assessment. The problems speak for themselves.
Cost of not maintaining. the cost to clean-up a hacked wp website can range from $500-$3000. Restoring a website after a failed backup attempt can result in days of lost business and/or lost revenue. Frame the $149/mo maintenance service as low-cost insurance coverage for both of you against potential financial losses associated with a failed WordPress website.
Make it easy to say yes. consider offering a 90-day maintenance trial period for less than full price; or offer a first-month discount for all current customers. Reduce any perceived barriers and when customers see regular reports of pro-active work on their behalf, the renewal rates are very strong — usually greater than 90%
Deutrix Care White Label Pricing: Your Margin Calculator
Deutrix Care offers tiered wholesale pricing based on volume. The more client sites you manage through the partnership, the lower your per-site cost.
| Sites Under Management | Wholesale Rate | Suggested Client Price | Estimated Monthly Margin |
|---|---|---|---|
| 1-10 | $65/site | $149/site | $84/site |
| 11-25 | $60/site | $149/site | $89/site |
| 26-50 | $55/site | $149/site | $94/site |
| 50+ | Custom | $149-249/site | Contact us |
The costs of these services contain all of your standard core maintenance activities (updates, backups, uptime checking, security scans and monthly reporting for your brand). If you would like to add on additional features such as optimizing your site’s performance, removing any potential malware from your site or adding on extra hours of dedicated support then those can be done through an add-on service.
Deutrix also has a full service WordPress Development/Custom Build option for agencies who wish to provide their own development services in addition to our Ongoing Care Model
Part of the White Label WordPress Maintenance series.
Frequently Asked Questions
Yes. An agency with 2 to 5 people that has developed 30 or more sites can have enough clients to develop from 35 to 40 maintenance clients. Most likely it will take 6 to 12 months to get to that number.
Create tiered pricing options for each of your client’s budgets. Lead by explaining the risks and using data rather than just listing out all of the features. Keep in mind: clients that tell you they don’t need maintenance plans are probably going to be calling you as soon as possible when their website crashes. The goal of this process is to educate the customer, not to sell them something aggressively.
Yes. The wholesale pricing is how much we pay you for our service. You can set the pricing for your customers as low as $99 or as high as $299+ depending on what the marketplace will support. That decision is completely yours.
Cancellation of a maintenance plan is inevitable in any recurring revenue stream. What matters most is that your agency maintains a very high level of retention (above 90%) due to your consistent reporting, pro-active communication and evidence based reporting. Many of Deutrix Care’s clients retain service long term because they are able to measure the value of the care they are receiving month after month.
You bill your customers for services rendered. Deutrix Care invoices your company at the wholesale rate once per month.
