When it comes to improving your bottom line a predictable monthly revenue stream is key as it provides an ongoing income that can stabilise the business and allow you to plan better. Monthly Recurring Revenue (MRR) can inform budgeting decisions, help predict business growth and decrease volatility.
There are several ways to increase monthly recurring revenue and expand your business so you can start gathering more MRR streams. In this blog we discuss the ways channel resellers can grow their monthly recurring revenue streams, and the benefits of doing so.
Q: What is monthly recurring revenue?
Monthly Recurring Revenue is the income you can expect to generate every month from VoIP per user packages, Leased Lines, SIP Trunks and Microsoft Teams Direct Routing. You can calculate your MRR by multiplying your total subscribing customers by their actual monthly subscription value, or the average subscription value.
Q: How can channel partners increase monthly recurring revenue?
There are essentially four ways to increase monthly recurring revenue: gain more subscribing customers, upsell existing customers to a higher tier, cross sell additional services and reduce customer churn by making sure customers want to stay at the end of their initial contract term.
Gain more subscribing customers: Adding new customers is the most recognisable way of increasing MRR. By growing your customer base you increase the revenue coming in month on month. Adding new customers also helps to alleviate a loss in revenue if existing customers downgrade or cancel services.
Upsell existing customers to a higher tier: Upselling is the practice of encouraging customers to purchase a comparable higher-end product than the one in question. Each package is more expensive but offers a deeper and wider scope of features and usage limits.
Cross-sell additional services: Cross-selling identifies services and products that satisfy additional, complementary needs that are unfulfilled by the original service or product. For example, headsets could be cross-sold to a customer with a call centre hosted telephony service. Additional services help increase the value of your entire proposition, and helps you offer service features that meet the needs of all your customers.
Upselling and cross-selling are mutually beneficial when done properly, providing maximum value to customers and increasing revenue without the recurring cost of many marketing channels.
Reduce customer churn: By keeping the customers you’ve got you can maintain your MRR. Plus, it’s much less costly for a business to retain its current customers than to try and replace those customers with new ones. In fact, according to research, it can cost seven times more to acquire new customers than to retain current ones. Furthermore, customer churn decelerates your business’s growth, because for each lost customer, you must acquire one new customer just to maintain your current MRR.
Q: How can you guarantee the longevity of your MRR streams?
Keeping your current customers is just as important as signing up new customers. A customer retention person or team can help reduce customer churn and keep your current customers from moving to competitors or moving to lower tiers of service. For customer retention to be effective, they must have the power and independence to give customers what they need. When building your customer retention processes, think about:
Utilising feedback effectively: Your customer retention person/team is in the perfect position to gain valuable feedback. Give them tools to organise, communicate and utilise the feedback they receive.
The power to satisfy the customer: Your customer retention person/team should have the power to give discounts, extra features, free subscriptions and other incentives to solve problems and keep customers happy.
Inform your team: Your customer retention person/team plays a valuable part of many of the strategies previously mentioned such as upselling and cross-selling services. Keep your team updated and well-informed on these strategies as well as service enhancements, new services etc.
Sustainable long-term growth
Knowing how to increase your monthly recurring revenue streams, and actively working to do so, can help maintain your income and drives long-term growth.
Think creatively about your service offering, talk to your customers about their needs and monitor what your competitors are doing. With the right strategies, you can start to increase your MRR to drive long-term growth and sustainability.
Not partnered with us yet? Get in touch to talk about how we can help you grow your monthly recurring revenue streams!
