Photo by Carlos Muza on Unsplash
A monthly recurring revenue (MRR) is every small business owner’s dream. You can literally plan your business growth and trajectory and scale the business based on what your MRR is every month.
This is why every smart business owner looks for ways to either implement this or scale the one they currently have. In this blog post, we’ll share some powerful and proven ways to get more of that sweet monthly recurring revenue from your current and new customers.
Increase Your Product Pricing
If you own a SaaS company with pretty robust offerings you should seriously consider your pricing. Many SaaS founders tend to underprice their services because they feel it offers less resistance and helps people buy.
This usually comes from the pretty limited mindset of price wars. Also, they don’t spend time on properly figuring out ricing –many devote an average of 6 hours total to this important aspect of their business.
While you shouldn’t charge exorbitant rates, you also shouldn’t have to undercharge just because you want to get a slice of the market. If your offerings are pretty solid –preferably better than or at par with most in the market- then you should consider raising your prices.
If you’re scared of losing old customers, just lock them in at the current price for the next 3-12 months while notifying them of the impending price adjustment. But remember to justify this price increase for them by improving your features and adding new functionalities.
Get Rid of Unlimited Features
If you’re currently offering anything unlimited, consider eliminating those plans. It doesn’t matter if it’s unlimited hosting, credits, users… change the terms. Then, create new plans, label them accordingly –e.g. platinum, diamond, etc- and put some more value on them.
If you do this, you may experience a small amount of churn, but a sizable increase in revenues. Plus, removing the term ‘unlimited” increases the value of your offerings in the eyes of customers.
Create Smaller Subscription Plans
If you currently offer a wide range of features per account, maybe it’s time to reassess those, break apart the offerings, and either offer them individually or combine parts into one offering. This is how Mention, the brand monitoring firm, grew its average revenue per account by almost 300 percent.
For instance, let’s say your SaaS service includes a CRM, email marketing suite, email scrapers, lead warm-ups, and follow-ups all for the monthly price of $249.
You could break them up and create a separate offering for the CRM priced at $149, another one for the email marketing suite priced at $147, and a third offering that combines the email scrapers, lead warm-ups, and follow-up tools at $99.
As you can see, this alone has created two additional income sources with an additional $146 monthly revenue. That’s over 50 percent revenue increase that you got by simply unbundling your offering. Will you lose some customers? Sure, but the new revenue you’ll make from new ones will far mask the loss.
Upsell Your Customers More
Can your customers or clients benefit from new upsells like a monthly VIP plan that includes 1-on-1 coaching calls? Will they find a quarterly mastermind session very useful? Do you have unique industry insights that will qualify you as a specialist?
You could sell this as a service. Are you always testing various marketing strategies or elements and finding hidden gems? You could give customers access to these “lab results” for a monthly fee.
These are some of the things you need to consider when you’re brainstorming ideas that will increase your MRR. If you feel that they can benefit from these upsells, then you really need to get on that.
Create powerful product and service offerings that they will like and appreciate, and charge them accordingly. For instance, there are coaches who charge a monthly $200 fee for a monthly 1-hour call.
Everyone is billed at the beginning of the month, and the coach confirms your best time for a call. Not everyone jumps on all the time, but many are willing to pay that monthly for access to a great coach.
Conclusion
There are a ton of creative ways to increase your average annual revenue per account or monthly recurring revenue. Some extra tips include offering valuable add-ons for more fees, working on improving your website or landing page’s conversion rates, targeting better-paying prospects, generate more leads, and test your ads more.
Used correctly, these tips can significantly increase your bottom line and help you scale your business to the levels that you desire. And you don’t have to slash your prices to enjoy that level of growth too.
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