Many agencies and managed service providers (MSPs) operate with a mix of two pricing models: one-time projects and recurring retainers. It’s the right approach, but how you structure that mix can have a significant impact on your financial resilience and overall client value.
When we analyzed data from 165 high-performing agencies across the web services industry to understand what actually drives long-term client value (LTV), it became clear that how you blend projects and retainers meaningfully shapes both LTV and operational stability. The research—conducted in partnership with Promethean Research, a firm specializing in performance benchmarking for digital agencies—revealed that pricing model mix is one of the structural drivers shaping agency growth and retention.
As part of our series exploring the 12 key drivers of client lifetime value for agencies and MSPs, this post looks at how pricing model mix influences client longevity—and why even small recurring services can have an outsized impact on retention and profitability.
Projects vs. retainers: two very different LTV profiles
Agencies and MSPs often rely on projects to drive growth. Projects generate upfront revenue, create momentum, and fund expansion. In fact, our research found that many fast-growing agencies operate with a 2:1 ratio of projects to retainers.
But projects, by nature, are finite. Once delivered, the revenue ends. For businesses that rely primarily on project work, sustaining growth means consistently winning new engagements. When deals slow down, revenue often follows. Over time, it’s easy to fall into a “feast-or-famine” cycle: a strong quarter fueled by a few big wins, followed by a quieter stretch spent pursuing the next opportunity.
Retainers operate differently. Because they bring in recurring revenue each month, they make the business more predictable. Instead of starting from zero every quarter, you have a steady base to build on. Client relationships also tend to last longer under a retainer model, which naturally increases overall lifetime value.
And retainers don’t replace project work. They often generate more of it. Ongoing relationships surface new needs: a performance issue becomes a redesign, a growth initiative becomes a new build, an upgrade turns into a broader strategy conversation.
Where projects might run for 6–12 months, retainers often last two years or more.
Projects as entry points, not endpoints
Among the high-performing agencies we surveyed, projects rarely mark the end of the relationship. Instead, they’re designed as the starting point of something bigger. Rather than treating projects as isolated engagements, these firms structure them as entry points into recurring work—where trust is earned, value is demonstrated, and longer-term partnerships begin to take shape.
A website launch leads into hosting and ongoing maintenance. A build opens the door to performance monitoring and conversion rate optimization (CRO). Infrastructure setup transitions into managed oversight. From the very beginning, projects are scoped with a clear next step—one that extends the relationship beyond the initial engagement.
As those ongoing services take hold, the agency’s role begins to shift. When an agency or MSP manages a client’s web maintenance, infrastructure, security, or other digital assets over time, they move beyond being a project vendor and become part of the client’s day-to-day operations.
That shift changes how future work happens. When new needs arise—whether a redesign, feature build, marketing initiative, or infrastructure upgrade—the existing partner is already part of the conversation. With system access, context, and a deep understanding of business goals, additional work becomes a natural continuation of the relationship rather than a brand-new sales process.
A low-effort service that quietly drives retention
So, if projects are the on-ramp to long-term relationships, recurring services are what reinforce them. The closer your agency sits to a client’s core infrastructure, the more durable that relationship becomes. Some recurring services have an outsized impact on retention—and domain management is one of them.
Every client depends on a domain. It sits at the center of their digital presence and requires ongoing attention. Unlike optional add-ons, domains are foundational infrastructure.
They:
- Connect websites, email, and core digital systems
- Require renewal, oversight, and configuration
- Anchor brand identity and online continuity
When agencies and MSPs bring domain management in-house, the benefits extend beyond the service itself. It allows you to:
- Reduce friction around ownership, renewals, and DNS management
- Prevent client leakage to competitors who offer domains
- Create consistent touchpoints throughout the year
- Strengthen control over the broader digital ecosystem
Even if domain management generates only modest direct revenue, its retention effect can be meaningful. And when set up properly, it’s one of the easiest recurring services to implement, with a client loyalty impact that far outweighs the effort.
Our OpenSRS Storefront solution, for example, was built with agencies and MSPs in mind, so you can add an on-brand domain search and checkout to your website in minutes, no coding required.
Small cost, significant returns: the domain management math
Let’s walk through the example highlighted in the report that shows how domain management can directly increase client lifetime value.
Imagine a client on a $7,000 per month retainer. At a 35% gross margin, that client generates $2,450 in monthly gross profit.
Now, consider adding domain management as a recurring service.
If we assume
- a $15 annual cost, and
- approximately one hour of labor per year to manage at $100/hour,
- the total annual cost is $115.
That means the cost is minimal relative to the retainer. So, even if domain management only extends the relationship by one additional month, the financial impact is substantial.
The report conservatively calculates an additional $2,335 in lifetime value.
In other words, a modest recurring service can unlock significant incremental lifetime value if it contributes even a small extension in client retention.
Balancing growth and stability
The Promethean data doesn’t suggest that agencies or MSPs should move away from project work. But the agencies with the strongest LTV profiles weren’t purely project-driven. They combined project work with ongoing services and structured their pricing to support longer client relationships.
In other words, they used projects to generate new opportunities, and retainers to provide ongoing stability.
Ultimately, the goal is not to eliminate the natural fluctuations that come with growth, but to plan for them. With a healthy pricing mix, agencies and MSPs are able to:
- Fund expansion through projects by generating the upfront revenue needed to hire, invest in marketing, and take on larger opportunities.
- Stabilize cash flow through retainers with consistent monthly income that makes forecasting and planning more reliable.
- Increase average client lifespan by extending relationships beyond one-off engagements into ongoing partnerships.
- Reduce dependence on constant new business by growing revenue within existing client relationships instead of always chasing the next deal.
Over time, these effects compound. Each retained client reduces pressure on the pipeline. Each recurring service strengthens the relationship. Each additional month of retention meaningfully lifts lifetime value. The result is not just growth, but durable, sustainable growth.
Final thoughts
Pricing strategy isn’t just about what you charge—it shapes how your business grows.
The way you combine projects and recurring services determines how long clients stay, how often they expand, and how predictable your revenue becomes. Even small, well-placed services can have an outsized impact when they help turn short-term work into long-term relationships.
Domain management is a clear example of how this plays out. When it’s brought into your service mix, it reinforces retention, strengthens client relationships, and creates another layer of ongoing value. Solutions like OpenSRS Storefront make it easy to resell domains through your own branded experience and without adding operational complexity.
For a deeper look at how pricing structure and other key factors shape client lifetime value, explore the full report.
Frequently asked questions (FAQs)
Client relationships tend to last longer under a retainer model, which naturally increases overall lifetime value.
The agencies with the strongest LTV profiles weren’t purely project-driven. They combined project work with ongoing services, using projects as entry points—where trust is earned and value is demonstrated—to naturally lead into retainer work. It’s a structure built for relationships, not just transactions.
Many fast-growing agencies operate with a 2:1 ratio of projects to retainers.
A “feast-or-famine” cycle is marked by a strong quarter fueled by a few big wins, followed by a quieter stretch spent pursuing the next opportunity.
Every client depends on a domain. It sits at the center of their digital presence, connecting websites, email, and core digital systems, anchoring brand identity, and requiring ongoing renewal, oversight, and configuration. That kind of foundational infrastructure isn’t an optional add-on, and the closer your agency sits to it, the more durable the client relationship becomes.