Add subscriptions and service contracts

Who this is for

Founder led lower-middle market companies with 5 to 50 million in annual revenue that want steadier revenue and closer customer ties.

The quick answer

Add a contract when customers have a recurring need and care about uptime, response time, or predictable results. Define a clear service level and what is included. Price to value rather than to hours. Start with current customers and a short pilot. Watch attach rate, churn, and gross margin. Avoid custom promises that are hard to deliver at scale.

The method in seven steps

Choose the right use cases
Look for recurring pain such as maintenance, monitoring, refills, updates, or training. Confirm that buyers value speed, uptime, or compliance and will pay for predictability.
Write the service level
Response times, coverage hours, replacement rules, and what is included on one page. Keep limits clear to protect margin.
Price to value with tiers
Use Good Better Best coverage. Add a floor price for very small sites.
Create offer materials
Plan card, order form, delivery checklist, and a calculator that shows value versus current spend or risk.
Pilot with current customers
Invite a small cohort. Run for one quarter. Measure attach rate, service levels, cost to serve, and net revenue retention.
Enable sales and success
Teach discovery questions, upgrade paths at renewal, and field sales cards if you have teams on site.
Operationalise and review
Schedule staff, parts, and tools to meet service levels. Review margin and churn each month. Retire custom promises and fold repeat needs into standard plans.

Example

An equipment company launched three plans. Basic had business hours response and annual inspection. Plus added same day response and parts at cost. Premium added four hour response and a loaner unit. Fifty eight percent of customers adopted a plan in six months and emergency callouts dropped.

Pitfalls and fixes

Plans that look like hourly blocks. Sell outcomes and response levels.
Custom plans that strain delivery. Standardise and update tiers when patterns repeat.
Weak handoffs. Use a one page checklist and a welcome call.

Checklist

Use cases and value confirmed
One page service level and limits written
Tiered pricing with a floor price
Offer materials and calculator ready
Pilot cohort and measurement set
Sales and success enablement complete
Delivery plan aligned to service levels