Four Kitchens offers ongoing support services to clients. As the department grew, there was significant variability across contracts, leading to different terms for each of ~50 concurrent accounts: retainers vs. bill-as-used, monthly vs. quarterly vs. annually, variable rollover allowances, and expiration periods. This presented uncertainties in monthly capacity planning, high unbillable overhead, inefficiencies in billing, and difficulties for reporting.

Summarized Findings

In an effort to standardize our offerings, I discovered several opportunities:

• Business Development wanted input to sell more consistent, packaged agreements.
• Project management (billable) and account management (unbillable) time were disproportionately higher for smaller accounts and the former ate into retainer hours.
• On a time-and-materials basis, new automation tools slashed potential revenue per account but increased effective capacity for new accounts.
• Company’s target market strongly prefers quarterly agreements to monthly agreements. Flexibility to offer a quarterly contract would be a compelling differentiator.

New Tiers of Service

I recommended transitioning clients over to one of three different “plans” over the next 6-12 months.

Security Update Coverage: Keep your site on cruise control, rest easy.

A lower tier of service leveraging value-based, flat-rate billing for a partially automated level of service. For a client, this is insurance: a safety net during a time of transition and/or a consistent cost for a needed service. It also sets a lower expectation on touch-points for account and project management.

One client explained to me that her tendency to plan out hourly expenditures meticulously was due to the fear she would come up short if an urgent security release came out and she would be held responsible for an incident. Between this insight and the upcoming update automation, I decided to split security update coverage out of the hourly billing component of all support tiers. This first tier would be flat-rate completely and cover security updates automatically.

For the business, this provides cost splitting across accounts to grow a suite of automation and monitoring tools as well as R&D initiatives that allow additional capacity. Value-based billing realizes more revenue than hourly billing most months, building up reserves for high-labor months like major security incidents or another “Drupalgeddon.”

Security Updates and Support: Stay safe and exterminate bugs.

A medium tier of service offering a modest quarterly retainer of hours focused on bugfixes and low-burn improvements. It offloads security updates as described above to a discounted rider and project management to an established overhead percentage. Clients are offered additional touch-points with the team and direct access to tools to maintain their backlog of work.

For the client, this offers a predictable level of ongoing support attention in addition to the assurances of security monitoring and updates. They also feel more connected to the team.

For the business, this is essentially the MVP offering for “continuous improvement.” It offloads the need to account for project management and security updates within the retainer hours and offers a marketable package.

Security Updates and Continuous Improvement: Evolve your site while keeping it safe.

A further expansion with a deeper discount on security update coverage in exchange for a significant retainer commitment. Additions include touch-points to the team, tool access, and other offerings to build a premium, highly collaborative experience.

For the client, this should feel like “our team is your team.” For the business, these are the main revenue drivers with the most busienss development potential, this offering is geared toward treating them as such, including additional opportunities to propose additional services or audits.

Results

The company rolled these plans out in 2020H1 and successfully converted about 50% of their existing contracts to the new plans. Even before that, however, this structure allowed the department to adjust its qualifications process for new contracts and renewals.