6 WAYS TO INCREASE MONTHLY RECURRING REVENUE
1. Improve Budgeting & Efficiency
Costs and expenses take away from your revenue, so reducing them will improve your MRR. A good place to start is reducing your customer acquisition cost. You will see that there is overlap because many factors that reduce customer acquisition cost will simultaneously improve MRR.
Detailed planning and documentation will catch potential pitfalls early, saving your company money and time, as well as allow your company to make more accurate cost estimates. Costs will need to be defined over the course of a project. This includes before a project, multiple times during a project, have a final estimate before completion and then have a definitive budget finalized upon completion. Planning and budgeting also lessens the chance for surprises within your control. In situations outside of you control, always have a contingency plan in place.
You can also improve efficiency for your company. Marketing automation software will lower costs and increase productivity for your company by automating repetitive tasks like customer emails, recommendations, and reminders. Your company can also work to streamline interpersonal operations, such as improving teamwork through virtual teams and outsourcing low cost work to lighten loads as necessary.
2. Keep Up with Trends
Try to keep in mind that anyone, anywhere could use your software, and possibly use it in an inventive or surprising way that was never even imagined by anyone at your company. It’s this innovation that often leads to new potential customer revenue for entire software industries.
Stay observant of social trends, economic advantages/disadvantages, as well as technological advances, and incorporate those into your marketing approach and software development. It’s all about being observant and capitalizing on potential opportunities and minimizing any threats. The company that strikes first and best (best is key) in an industry leaves a lasting impression on customers.
3. Unbundle Features
Think about TV cable bundle packages. Remember all the times were you wanted just one channel but it came with in a bundle package? It would be frustrating because the rest of the channels available in the bundle didn’t really appeal to you at all, but you had to take them because they were a package deal? Many people feel the same way about feature bundles.
Streaming apps thrived from picking up on this mentality and other companies should do the same. In the age of personalization, people want as close to a custom fit as possible or else they might take their business elsewhere. Allowing people to pick and choose what features they would like to add to the core software want makes them more likely to not only stay with your business, but also refer your software to someone else, leading to even more customers.
4. Raise Pricing (Under Proper Circumstances)
Building off the concept of unbundling of your features--helping your customers create a unique experience with your software will also allow you to raise prices. People are far more willing to pay up for a custom experience. What they don’t want is to pay a higher price for standard features and packaging offerings that can be found in any similar software in the industry.
However, when developing pricing for a custom user experience, be sure to be cautious about it at the same time. Research your competition’s features, advantages, and prices and weigh the pros and cons of raising your own prices. You will be able to gauge what kind of pricing your company can do in comparison.
If you’re from a trusted, established company, people will be more receptive to raised prices versus a startup just making themselves known—unless this startup is housing game-changing innovation. An incremental pricing change with the introduction of more custom selections is also an option.
5. Inbound Marketing
Inbound marketing is less costly than traditional marketing techniques and has a greater return on investment. It helps align what is valued by customers with the capabilities of your business, making for a better fit between customer and software, and happier customers.
Before any software is created, potential customers need to be interviewed, surveyed, and observed in their field to design high quality software. Ask them questions like: How they would use it? For what goals? And what challenges did they find in software from your competitors? Observation helps with improving overall software usability, including user interface development. Incorporate your findings into your software.
When you set out to make software that specifically helps people achieve their targets and face any tests that come their way, it shows, and potential customers appreciate the thoughtfulness behind it. Don’t let this stop with your software, but also post helpful content on your website and social media. It will build your company up as one that is knowledgeable and trustworthy.
You can also learn from your customers by observing trends. Customer Relationship Management software will allow you to observe how your customers are using your software and interacting with your company, down to your website or possible vendors.
CRM can be used to visualize groupings of how people are using your software. These groupings may be referred to as buyer personas. For example, you could use these groupings to create more core starter packages. Customers are really the best people to observe when trying to increase your profit, because they are who you’re trying to attract and making things better or easier for them will make them happier with your software.