Episode 39: How to create more recurring revenue

I speak to a lot of consultants and when I jump on the phone with them and ask what they need to work on most.

Creating more recurring revenue is probably the top answer I hear.

And that's why, in this podcast episode, I'm going to explain what your action plan should look like and there are three steps.

Step 1: Create packages that generate recurring revenue 
Step 2: Sell those packages to as many of your existing clients as you can 
Step 3: Sell those packages to as many new clients as you can

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Okay so let's jump straight in and talk about step 1.

So when consultants tell me they need more recurring revenue.

The first thing I say is to ask if they have subscription-based packages.

They say no.

I then don't say anything for a little while and let there be a bit of an awkward silence to let that settle in.

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If you need more recurring revenue, you need packages that create recurring revenue.

It really is as simple as that.

So, how have consultants tried to create subscription-based revenue in their businesses before?

Well, they've tried to cram everything a client could possibly need from them into one package and it's never really worked.

It doesn't work for you to do it in this way because it's literally impossible to manage...

I hear the same concerns, such as...

I don't want to offer unlimited support 
What if they asked this...
What if they needed this....
This could take an hour, or a day 
How would I protect myself from being abused by clients
How would I make sure that I'm being profitable 
How do I move away from offering a certain amount of hours in each package

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I was having this exact chat with one of my clients in early 2024.

We were discussing her packages and we were going through all of the concerns and questions she had.

I realised that what we were trying to do was impossible.

As an industry, we've been trying to cram everything a client could possibly need into one package and it wasn't going to work, nor was it the right thing to do.

So, I said to my client that before we can even start to think about packaging up her services, we must first figure out a way to break HR as a service down first.

We discussed lots of different ways to do this and we decided that doing it via HR roles was the best.

And that's when I created the HR Service Pyramid which is now a registered framework for HR consultants to use.

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So think of a pyramid for a second.

At the bottom, we have HR Admin

This could include HR software, starters and leavers, all the general admin stuff and payroll.

On the next level, you have HR advisory which is there to answer the low-level questions that business owners have - this is your advisory helpline.

You then have HR management which is day-to-day operations.

You then have HR Director level – which is the strategic thinking stuff.

You then have HR specialist level –  this will include more specialist project work.

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There's lots of ways to use the HR Service Pyramid, but I want you to think about using it to organise your different services in the eyes of your clients...

Not how you might necessarily deliver the work.

An example of this is an investigation.

In the eyes of your clients, this sits at the top of the pyramid as a specialist service.

But how you deliver this, internally, may span all of the different levels.

With that in mind, put yourself in the shoes of your clients and think about how your services might be organised via the HR service pyramid.

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Now that you've arranged your services via the HR service pyramid, you now need to think about how to package them up.

So there are 4 different revenue types that you can tap into.

Passive, subscription, time-based and one-off.

Each revenue type belongs to a different level of the HR Service Pyramid.

So admin, if you're focusing on HR software, is perfectly suited to passive income.

But as soon as you add in any sort of management, then this will become subscription-based.

Advisory is definitely the level that is subscription-based.

Management may be subscription-based, but most likely time-based, and you might like to get a retainer in here.

Director is time-based / maybe one-off work too.

And specialist is also time-based and off work too.

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So using the HR Service Pyramid, we can see that you should package up HR Admin and HR Advisory into your subscription-based packages.

And to help you do this, I have created the "How to package up and sell HR to make more recurring revenue training programme"

It's just 40 minutes of watching time and I'll explain exactly how to create these packages and answer every single question that you're likely to have.

The course includes all of the HR Service Pyramid resources, templated admin and advisory level subscription-based packages that have been field-tested and approved by my successful clients...

AND a templated promotional deck to help you sell these new packages to your new and existing clients.

You can literally copy and paste these packages and start making recurring revenue today if you want to.

So to learn more about this training course, please visit my website thehrmarketingguy.com and go to the 'get ready to grow' tab at the top.

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Okay so once you've created packages that generate recurring revenue, you now need to sell them.

And that brings us nicely onto step 2 and that's to sell those packages to as many of your existing clients as you can.

Selling to people that you have an existing relationship with is far easier than trying to sell stuff to people who have never worked with you before and that's why I suggest doing this first.

Now I know this can make you feel a bit uncomfortable...

But all you need to do is have a check-in with clients you're currently working with and have worked with in the past to see how they're getting on.

And if there's an opportunity to help them, whether that's a project or by selling these new subscription-based packages to them then great!

To help you do this, there's 3 ideas I'd like to run past you...

My first idea is to create a profit matrix.

The profit matrix is a management tool to help you see at a glance what services your clients have bought and what opportunities there are to upsell to them.

 It's a very, very powerful tool, and it's basically a big table.

And you can do this in Excel or on a whiteboard or whatever.

On one axis are all of your clients, on another axis are all of the services you provided. You then highlight which clients are buying which services, and it's just a really lovely and beautiful way for you to see what clients are and aren't buying from you at a really easy glance.

The second awesome idea I have is that there should be someone in your consultancy responsible for doing the account management role.

Now I'm saying that with little bunny fingers.

Okay, so in the marketing agency world when it comes to looking after clients, there would be an account manager and a project manager. I think this is the same in most industries, to be honest.

The account manager is the person that looks after the account, so they're in charge of retention, upselling and profitability.

The project manager is the person that does the actual work, and then the account manager and project manager work closely together to ensure work is done on time, within margin, and that the client is happy.

You guys are really good on the project management side of things, but I think there needs to be someone that has the time in order to step back and look at the bigger picture.

So for startups, independent consultants, and smaller consultancies, you as the business leader will probably be the best person to take on this role.

But for larger consultancies, you may decide to get one of your staff to do this.

As an account manager, it's your job to look at each account to make sure that they're happy, to contact the business owner on a regular basis, to discuss what their goals are, and to suggest other ways to help.

So what's a great way for the account manager person to chat with business owners on a regular basis?

Well, now we've come to my third and final awesome idea, and that's by having regular strategic reviews with clients.

You can call these meetings whatever you want, but they should be wrapped up as part of the service you provide.

That's really important and should be completed on at least a quarterly basis. The agenda of this meeting is simple and is arranged by three questions.

What's going well what's not going so well and what opportunities or problems are there that we could help with. You'll be amazed at the great conversations you'll have with your clients by asking these three simple questions.

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Okay so now you've created opportunities for yourself to sell your new subscription-based packages to your existing contacts...

Your 3rd step is to sell your new packages to new clients.

And this requires a very focused 'funnel'.

The first thing you need to do is find a company segment to target that has the right number of employees.

You then need to 'feed your funnel' with these types of business owners.

So you basically need to connect with them on LinkedIn and do a bunch of other things to get them to opt into your email marketing list.

Then you can nurture those leads until they're ready to buy - and that's where the HR Marketing Box content comes in.

And then finally you can convert those nurtured leads into happy clients.

Sounds simple, right?

Well, the strategy of it actually is.

You grow multiple audiences like your LinkedIn connections and email list.

You build a relationship with them over time.

And then you convert them into happy clients.

However, there are lots of details that make your funnel a success or a big fat flop.

And that's why I created the Prepare to Grow Mastermind.

It's a 10 week mastermind to help you 'build the business' behind your consultancy and put the essential foundations in place you need to start going out to new business owners and asking them to start working with you.

I am absolutely loving delivering this Mastermind.

So much so, that I've decided to start a new cohort in September.

So if you'd like to learn more about this Mastermind, please visit my website to check it and book a call in with me to make sure it's right for you.

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Okay, so that brings us to the end of this week's podcast episode.

If you need more recurring revenue then,

1: Create packages that actually generate recurring revenue
2: Sell those packages to your existing relationships 
And then 3: Create a very focused funnel to sell those packages to new clients in the future

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If you need any help with anything I've discussed today, please feel welcome to book in a free discovery call and let's have a chat.