In a world where revenue swings can make or break a business, recurring revenue models offer a stable, scalable path forward especially for service-based companies.

They allow you to shift away from chasing one-off projects and instead focus on building long-term client value. At DataCose, we help growing agencies and service firms implement smarter systems and recurring revenue is one of the most powerful strategies in that toolkit.

‍

What Is a Recurring Revenue Business Model?

A recurring revenue model means you’re paid repeatedly on a scheduled basis (monthly, quarterly, or yearly) for ongoing access to a product or service. This could be through a subscription, a retainer, or metered usage.

It creates:

• Financial predictability: Easier planning, hiring, and investing.
• Higher customer lifetime value (CLTV): More revenue per client over time.
• Increased business valuation: Investors love consistent revenue streams.

Read More: Why Every Service Business Needs a Recurring Revenue Model

‍

8 Recurring Revenue Models That Actually Work

Let’s break down the most effective recurring revenue models for agencies with clear examples and how you can apply them to your service business.

‍

1. Fixed-Term Service Contracts (Hard Contracts)

How it works:

You offer services on a locked-in timeline — e.g., 6 or 12-month contracts — with fixed monthly pricing. Clients commit upfront, and cancellations carry penalties.

Why it works:

Predictable cash flow and less churn. Great for foundational services like SEO, content, dev retainers, or system support.

Example:

• Elegant Themes offers a $89/year subscription for access to all their WordPress themes and plugins. It’s a 12-month commitment with a clear value exchange.

How you can use it:

Agencies can package strategic services like:

• 12-month SEO + analytics plans
• Quarterly automation audits
• Annual web hosting + maintenance bundles

By locking in duration, you reduce admin overhead and build deeper client relationships.

Free Resource: The Service Business Owner's Escape Plan: Productize for Freedom & Scale

‍

2. Perpetual Use With Ongoing Purchases (Consumables Model)

How it works:

Clients pay once for a product or setup, but continue paying for usage-based add-ons or upgrades.

Why it works:

You get both upfront revenue and future recurring sales tied to value.

Example:

• Amazon Prime Video lets users buy or rent content on top of their Prime membership.
• Peloton sells bikes, but the recurring revenue comes from the $44/month content subscription.

How you can use it:

Say you build a custom CRM for a client. Upsell recurring services like:

• Ongoing reporting dashboards
• Automation enhancements
• New feature rollouts
• VIP support

This model works well if you build proprietary tools or white-label software.

‍

3. Automatic Subscription Renewal (Auto-Renew)

How it works:

Clients pay on an ongoing basis until they cancel. Payments are processed automatically.

Why it works:

It reduces churn and makes renewals frictionless.

Example:

• Netflix charges a flat monthly fee, automatically renewing until the user opts out.
• Calendly Pro auto-renews each month unless canceled,  simple, seamless billing.

How you can use it:

• Monthly retainer for marketing or development
• Software tools (e.g., internal dashboards, scheduling apps)
• Monthly “Done-for-You” packages (like landing pages or sales emails)
  

Pair this with excellent onboarding and reminder systems to improve retention.

‍

4. Usage-Based Billing (Metered Model)

How it works:

Clients pay based on how much they use your service — e.g., number of API calls, GBs stored, or hours of support.

Why it works:

Pricing scales with usage, so you’re rewarded for high-value clients.

Example:

• DigitalOcean bills per hour of server use and bandwidth.
• Twilio charges per SMS, voice minute, or authentication transaction.

How you can use it:

Let’s say you run a reporting platform or provide ad management:

• Bill per ad account or click volume
• Charge for number of integrations used
• Bill hourly for support tickets

This model requires clear reporting and dashboards so clients understand what they’re paying for.

‍

5. Per-User (Per-Seat) Pricing

How it works:

Your pricing scales with the number of users who access the service.

Why it works:

It aligns your pricing with client growth.

Example:

• Slack and Microsoft 365 both charge per user, per month.
• ClickUp and Notion offer pricing tiers based on team size.

How you can use it:

If you’ve built internal tools (e.g., a CRM, analytics portal, or approval workflow system), offer per-user pricing.

You could also use this model if your agency builds:

• Team-based SaaS products
• Collaboration dashboards
• Client portals with multi-user access

‍

6. Tiered Pricing Plans

How it works:

You offer several pricing packages (Basic, Pro, Enterprise) based on access level, usage volume, or feature set.

Why it works:

It allows you to serve both small and large clients without custom quotes every time.

Example:

• Roketto, a HubSpot agency, offers retainer plans in clear tiers:

Starter, Growth, and Scale with increasing deliverables.

• Canva Pro starts at $12.99/mo, but larger teams pay more for brand kits and admin control.

How you can use it:

Package your services:

• Basic: Monthly content + reporting
• Pro: Everything in Basic + funnel strategy
• Enterprise: All above + fractional CTO support
  
  

Let clients grow into higher tiers as their needs expand.

‍

7. Hybrid Billing Models (One-Time + Recurring)

How it works:

You mix models, a one-time setup fee plus ongoing monthly charges. Or combine multiple recurring structures (e.g., per-user + tiered).

Why it works:

It gives you upfront cash flow while building long-term income.

Example:

• Slack uses both per-user pricing and feature tiers.
• Appcues blends per-user, usage, and access to premium tools.
• Refine Labs, a B2B agency, charges high flat retainers but adjusts pricing based on ad spend tiers.

How you can use it:

Offer:

• $2,000 one-time onboarding + $500/month retainer
• Base subscription + success fee for lead conversions
• Tiered plan + per-seat fee for access to strategy sessions

It’s flexible and easier to pitch than rigid contracts.

‍

8. Freemium Access (Free Plan With Upsell)

How it works:

You offer a free tier with basic functionality, and clients upgrade to unlock more features.

Why it works:

It’s a frictionless way to attract users and show your value before asking for money.

Example:

• Mailchimp offers a free plan for up to 500 contacts with upsells for automation, testing, and analytics.
• Buffer allows you to schedule up to 10 posts for free, then charges for expanded features.

How you can use it:

If you’ve built internal tools, calculators, dashboards, or templates:

• Offer a limited version for free
• Upsell advanced reports, branded versions, or integrations
• Add premium support or monthly audits
  

This approach works great for lead generation and showcasing your value.

‍

The Strategic Value of Recurring Revenue

Here’s what recurring models bring to your agency:

• Predictable income smooths out seasonal slumps and surprises.
• Less time hunting new clients, more time delivering value.
• You can confidently invest in hiring, tech, and marketing.
• Recurring revenue increases your agency’s market value, crucial if you plan to exit or raise funds.

‍

Smart Ways to Implement Recurring Revenue in Your Agency

Service-Based:

• Retainers for site maintenance, reporting, or growth audits
• Bundled “strategy + execution” packages with monthly billing
• Resell software licenses, analytics tools, or web hosting
  
  

Product-Based:

• Develop a micro-SaaS tool for one niche problem
• Offer unlimited design, dev fixes, or email writing for a flat fee
• Sell custom Notion templates, client onboarding kits, or UI kits

‍

Ready to Turn Your Custom Service into a Scalable, Recurring Offer?

Recurring revenue isn’t just for SaaS companies. With the right structure, your service business can earn predictably, grow sustainably, and even increase its valuation.

‍

Get the exact playbook we use with our clients:

👉 The Service Business Owner’s Escape Plan: Productize for Freedom & Scale

Inside, you’ll learn:

• How to shift from project-based chaos to predictable monthly income
• The first steps to turning your service into a valuable offer
• Examples from agencies already doing it

Start building a business that runs (and grows) without constant hustle.

‍