Insights — Channel Creation & New Revenue Streams — 3 min read
How to Move from One-Off Consumers to Recurring Commercial Contracts
The ultimate goal for many businesses is to move from the unpredictability of one-off consumer sales to the stability of recurring commercial contracts.
In short
Move from one-off sales to recurring contracts by identifying the ongoing needs of your B2B clients and packaging your services into a subscription or managed service model that provides continuous value. This requires moving away from 'fix on failure' to 'preventative maintenance' or 'continuous support', ensuring your pricing reflects the value of the reliability you are providing rather than just the time spent on individual tasks.
One-off consumer sales are great, but they require constant marketing effort to maintain. Recurring B2B contracts provide the stability that allows a business to plan for the long term.
Making this transition requires a shift in how you package your services and how you sell them.
Packaging for stability
To create a recurring contract, you must find a reason for the client to pay you every month. This could be for maintenance, for access to expertise, or for the guaranteed availability of your services. Your job is to make your service an essential part of their business operations.
Commercial reasoning: Capacity and margins
Recurring revenue allows for better capacity planning. You know exactly how much work is coming in next month, which allows you to manage your staff and resources more efficiently. This often leads to higher overall margins, even if the individual hourly rate is lower than for a one-off job.
Validate before you build
Before launching a full recurring model, offer it as an option to your existing B2B clients. See how many are willing to trade the lower cost of a one-off job for the peace of mind of a recurring contract.
When NOT to do this
Do not promise recurring service if you do not have the capacity to deliver it. A recurring contract is a promise of availability; if you are already at capacity, you will fail to meet that promise and damage your reputation.
Could your business support another route to revenue?
Evans Channel Creation identifies, validates and builds additional revenue channels from capabilities a business already has — B2B to D2C, D2C to B2B, product to service, recurring revenue or partners — and says so plainly when a channel should not be built. Programme from £1,995 + VAT per month over six months.
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