How to price a recurring service

Set the price of a recurring service from your own cost baseline, then decide the billing period, which charges repeat and what the price leaves out. The same method works for a maintenance plan, a retainer or a membership. The baseline shows what you need to cover; what the market will pay is a separate business decision.

Quick answer

Price a recurring service by first working out what one billing period costs to deliver: your hours multiplied by your internal hourly cost, plus tools and provider costs, plus an allocated share of overhead and a buffer for variation in effort. That baseline is the floor for the recurring price, not the price itself. Then choose the billing period, keep one-time costs such as setup separate, and write down what the price excludes. The method is the same whether the service is a plan, a retainer or a membership. Komashi does not set a market rate for you; you enter the inputs and the price, and check them against your own delivery experience.

Work out the cost of one billing period

Add up, for one period: delivery hours multiplied by your internal hourly cost, the tools and provider costs for that period, an allocated share of overhead and a buffer for variation in effort. Write the formula with your own values. The result shows what one period costs to deliver, and the price has to cover it before margin and tax.

Choose the billing period

Monthly, quarterly and yearly periods change how often the customer pays and how much each charge carries. A monthly price follows monthly delivery and is easy to review. A yearly price means fewer billing events, but you carry a full year of cost from the start, so the exclusions and review dates need to match. Price every period from the same baseline, so a yearly price is not a monthly price with an unplanned discount.

Separate setup fees from the recurring price

Onboarding, a first review or initial configuration is a one-time cost. Charge it as a one-time item rather than spreading it across the recurring price, unless the customer should pay it over time. Keeping the two apart makes the recurring price easier to compare and shows the customer which amount repeats.

Write exclusions and plan price changes

Name what the price leaves out, such as urgent requests, replacement work or a new site, and the price for that extra work. Before you raise a price, decide whether existing customers keep their current price until renewal or move at a set date, and tell them in writing before the change takes effect.

A check with illustrative values

Care Plus is the example monthly website care package used across this site, at $190 per month. An Extra pages add-on costs $30 per month, and setup is $150 once. Enter your own hours, rates and buffer into the cost baseline. If the monthly baseline is above $190, Care Plus does not cover your modelled cost. If it is below, the difference is what remains before margin and tax. The add-on is priced separately, so a customer who takes Extra pages pays $220 per month, and that combined price should be checked against its own extra hours.

The cost baseline formula

Every input is your own figure. Replace each term with your value, then compare the result with the price you are considering.

monthly cost baseline = (delivery hours × internal hourly cost) + tools and provider costs + allocated overhead + buffer

Three common pricing mistakes

  1. Starting from a competitor's price

    Another provider's price says nothing about your hours, tools or overhead. Build your baseline first, then compare.

  2. Folding setup into the monthly price

    The customer cannot see what repeats, and a later price change becomes hard to explain.

  3. Leaving out the buffer

    Effort varies between customers and months. A baseline without a buffer for busy periods and exceptions understates the real monthly cost.

How Komashi fits

In Komashi each package has its own price and billing period, and add-ons can be recurring or one-time. Setup and other one-time charges sit apart from the recurring price, so the customer sees which amount repeats. You enter the numbers; any price suggested by Komashi AI is a starting point for you to review.

Set up packages and billing periods

What to check before you publish a price

  • The baseline uses your own hours, internal cost and overhead method.
  • Each billing period is priced from the same inputs.
  • Setup and other one-time charges are listed separately from the recurring price.
  • Exclusions and the price for extra work are written next to the package.
  • Existing customers know when and how a price change applies.

Ready to put this into practice?

Create a service with Komashi.