Building Recurring Revenue | Why Your First Order Is Just Onboarding 

What would change if you stopped counting the first sale as revenue? 

That was the question at the centre of our latest All Together workshop, led by Volunteer Advisor Terry Hunter. The room was a mix of founders and CEOs at very different stages: from a learning and change agency two decades in, to a consumer e-commerce business built on high-consideration occasion purchases. 

There was a real mix of sectors, but interestingly, everyone shared the same problem. Almost all of the founders in the room were winning revenue the hard way – find a customer, sell them something then start again from zero. 

Terry has built his career on an opposite model. He took over as MD rebuilt the business into an e-commerce services company that he exited in 2012. Then started again from scratch with a laptop and a single contractor agreement, building a Salesforce Commerce Cloud professional services business that sold for around £85m in 2021. He is now Executive Chairman of Astound Commerce and leads an AI initiative within the business, alongside investment and advisory roles. 

Class the First Order as Onboarding 

“Treat the first order as onboarding and count the revenue afterwards” Terry opened to the room. 

No matter what an initial project earned, it was not the deal, it was the process of acquiring a client who would still be there in three years. The reason for framing it that way was psychological as much as commercial. If the team believes the first sale is where the money is made, they will squeeze it. If they believe the first order is onboarding, and a chance to really impress the client, they will focus on keeping the customer happy, and the recurring revenue looks after itself. 

The practical consequence is a different unit of measurement: stop valuing a customer at what they just paid you and start valuing them at total lifetime contract value. 

Map the Next Order Before You Chase the First  

The question that followed is one that several founders in the room found uncomfortable: “What, specifically, is the next thing this customer buys?” 

If you cannot answer that, Terry argued, you have found your first problem, and it may not be related to marketing. It could mean you’re selling the wrong thing, or to the wrong customer. A client who can only ever pay for one piece of work from you is a client you have to replace every time, and generating new customers is the most expensive activity in most businesses. 

Terry’s solution sat in the sequencing rather than the pricing. Build a first engagement that is cheap, fast and visibly valuable – a piece of mapping or diagnostic work that shows the client where they are and what is possible. Then a second touchpoint that gets them ready, and only then commence an ongoing relationship. By that point you have earned the trust that makes a retainer feel obvious rather than optimistic. 

For a consumer business, the same logic can be applied in a different manner. One founder noted that in his category the natural repeat cycle is annual, and that impressing a first-time buyer can secure not just their repeat purchase but the person they bought it for; turning one customer into two.  

Make It Costly to Leave 

“If you don’t make it expensive to leave, they’ll leave you. What are you giving them on a regular basis that makes them want to stay?” 

The advice Terry has used with his teams for years is make it expensive to leave. If you don’t, they will. 

He illustrated this point with his own experience. Clients were paying a premium day rate for development resource when they could, in theory, hire directly for a fraction of it. The only thing keeping them was the benefits surrounding the resource – speed, quality, flexibility across front end, back end and design, and credentials the client could not replicate internally. The moment that surrounding value begins to disappear; it became cheap to leave. 

Terry’s answer was to be deliberate about what the client would lose by walking away. Whether that’s the tools, the pipeline visibility, the ongoing oversight, or simply the work that keeps happening every month without them having to think about it. 

Retention When There’s Nothing to Subscribe To 

“Not every business has a natural subscription model.” 

For products built to last, the adjacent revenue often sits in care, maintenance and upgrade. This is a model luxury outdoor and functional brands have used for years. Storage, cleaning, protection, repair and refresh services are frequently higher margin than the original product, and they keep the relationship alive between infrequent purchases.  

For a subscription app, the balancing act is different again: give away enough free content to build the habit, but not so much that there’s no reason to convert. Terry shared that you need to study how the category leaders do it rather than solve it from first principles, think wallets, points, paywalls and unlockable content. 

Simple Enough to Actually Be Used 

For founders with deep expertise, Terry warned against a common trap: the more you know, the more you want your product to do, and the harder it becomes for anyone else to understand it. AI has made it dramatically easier to build more than you should. 

His advice was to reverse the product back two or three stages – strip it back to the high-level value, minimise the number of decisions the user has to make, and accept that the simplified version won’t contain everything you know. Something a customer can understand beats a platform that answers every potential question, particularly if one day you will want other people to deliver it without you in the room. 

Find the Time to Work on the Business 

Terry closed on the advice he gives every founder running a growing business: find time to work on the business, because all of us are busy working in it. 

Even while he was the sole salesperson in a company approaching eight figures, he pulled a small group offsite, including one person from outside the business, purely to brainstorm about the business rather than operate it. Every pivot in the room that day, and every pivot in his own career, came out of that kind of thinking rather than out of the day-to-day. 

He was also candid that none of this is easy. He remembers telling a chairman early on how impossibly hard building the first business felt, and he doesn’t pretend the second one was straightforward either. What changes is not the difficulty, but the willingness to keep looking at the business from an outside perspective, and to pivot when what you’re doing isn’t getting you where you need to be. 

Five Things to Consider: 

1. Reframe the first order as onboarding. Tell your team the first sale isn’t where the money is made. It changes how they behave in the delivery, and what the customer experiences, which ultimately determines whether there is a second order at all. 
2. Know what the next purchase is. If you can’t name the next thing a customer buys from you, that’s the gap. It may mean redesigning your offer or targeting a different customer entirely. 
3. Audit how expensive you are to leave. List what a client or customer would lose by walking away. If the honest answer is ‘not much’, you have found your retention roadmap. 
4. Look for recurring revenue in care, not just in product. For durable or infrequent purchases, maintenance, repair, accessories and upgrade services often carry better margin and keep the relationship warm between orders. 
5. Cut the product back until it’s usable. Expertise pushes you towards complexity, and AI makes complexity easy to build. Something simple enough to be understood, sold and delivered by someone other than you is worth more than something comprehensive. 

A huge thanks to Terry for hosting such a thought-provoking workshop. He is a Volunteer Advisor to All Together members. To access workshops like this one, or to speak with Terry directly, visit alltogether.company/memberships.