In my opinion, from having observing the industry of the internet at large, this is what the ideal website maintenance retainer would look like, in theory.
In order to clarify my thinking, I'll use a specific scenario.
In this fictional story, there's a property management group for Salesforce Tower, or something similar: https://salesforcetower.com/. They have a website maintenance budget that is flexible, but not unlimited. They want a brochure site that is also functional for the different groups involved. In a sense, it's kind of like a foundation website with a lot of stakeholders. It's not a revenue or business-generating website.
So let's set up what the ideal retainer looks like. In order to do that, we need to consider the needs and motivations of both parties involved.
The buyer wants a responsive, positive, nice web agency. They want to interact with someone smart, and engaged, and maybe even someone who comes into the office from time time time.
The website agency owner wants strong profit margins, a customer that doesn't ask for too much such that it hurts their margins. The website agency owner wants to have a very good salary from this, not be overworked, and golf every Friday from 12:30-4:30pm. He wants a very healthy lifestyle business for now. But he also wants to sell in 3-5 years and do something ambitious. But with his young family in tow now, he needs things to not be super stressful. The owner runs a 12-person boutique agency. He lives in Santa Cruz, but visits clients in Silicon Valley 2x a week. His team is hybrid and meets 2-3x a week in the office. They have a strong overseas support staff, and leverage outsourced services. But they have a strong, core, in-person management & project management team.
So here's what I think the ideal retainer looks like:
- The flat rate for the retainer is $2,500 – 5,000 for maintenance. Add-ons for more.
- The agency rate is competitive at $150 an hour for any overflow work, as they leverage different skillsets and levels of expertise.
- The client gets these productized services built in:
- 24/7 website monitoring (using more advanced tools like https://littlewarden.com/)
- Security monitoring and backup (Leveraging Sucuri, Wordfence & Vaultpress) – have very secure backup teams for any counterattacks (reinsurance in a way)
- SEO change tracking – make sure pages and SEO aren't down
- Reputation monitoring – see if anything negative is being said in general
- Media monitoring – see if anything negative is being said about the brand in the news
- Social listening – see if brand is being mentioned on social – risk prevention
- And then an important piece would be the website management and monitoring of content, pages, landing pages
- Setting up and connecting the marketing technology on the site is key – such as analytics and tags
- Maintaining the email systems, form systems, and any other communication infrastructure
- Manage automations and connections, via tools like Zapier
This retainer would ideally take the agency about 8 hrs a month to service, but they should have the capacity to reserve another 8 hrs a month for emergencies.
The important thing here is that it's in the client's best interest for the agency to have 60-70% gross margins on a per unit basis, to eventually have healthy 30-40% net margins, from which a healthy chunk of that percent can be reinvested into growth initiatives.
The owner should be paid very well because of the stress that might pop up. Also, if the agency owner is paid well, they can relax an pay more attention to their clients, because they are secure and motivated to serve them. When more relaxed they can be more confident and creative in their problem solving for the client.
Important concept: Growth plans are separate.
As someone who focuses on a lot of growth marketing, I see the importance of nailing the foundations above first before trying to push growth.
I would actually be worried in having a maintenance company and a growth company under the same roof, unless they were special.
Maintenance, monitoring, and security should be stable and risk-adverse.
Growth agencies should be pushing the needle for changes.
They are not the same thing.
Inspiration from Crossing the Chasm Interview on Lenny's Podcast
This interview was amazing an illuminating for me. I'm currently reading the book Crossing the Chasm, but this interview really summarizes the cogent points and bring the author to life. It also applies the ideas in a more modern way since Lenny is super plugged into how startups are run in 2024.
The big lesson from this interview as it applies here is the concept that for a small company that is currently doing custom project work to cross the chasm, they need to own 30-40% of the market for a certain defined sector.
Market dominance of your defined market is key to cross the chasm and become a performance company with healthy growth and margins.
An example here, would be website maintenance for one of these industries where there is a good audience pool but room to be the #1 player:
- Websites & maintenance for business lawyers
- Websites & maintenance for venture capital firms
- Websites & maintenance commercial real estate firms with 10-50 people
- Websites & maintenance for CPAs for marketing and creative agencies (they want to appear cool to their clients)
My take from his interview was that these are not billion dollar markets, but they might be $10, 20, $100 million markets. A healthy website maintenance service agency/firm should specialize and niche down well enough to become the dominant player, solving a painful problem for that is meaningful for their buyer.
An example might be that you provide the website, storage, and cybersecurity for business law firms, where getting that right is critical to their operations. They can't have any client data leak out, so that portion is really important. They may need to send and store client information confidentially. They may use technology like Clio to do so, but there might be custom solutions, needs and integrations as well.
Last Updated on February 1, 2024 by Joe