How to increase your Monthly Recurring Revenue (MRR)

How to increase your Monthly Recurring Revenue (MRR)

As your business grows, so should your Monthly recurring revenue. Your Recurring revenue will give you more capital to grow your business.

But what should you do if you notice that your monthly recurring revenue (MRR) isn’t increasing?

We’ll show you 6 simple but effective tips you can do to increase your monthly recurring revenue for your business!

First, let’s go over what exactly is a monthly recurring revenue and how to calculate it.

What is a monthly recurring revenue?

Your monthly recurring revenue (MRR) is the predictive measure your business or SaaS will make in a month.

So for example, say you have 100 customers that pay $50 for your product or service, your MRR would be $5000.

How to calculate your monthly recurring revenue (MRR)

Calculating your MRR is pretty simple! You only need 2 numbers:

  • The average revenue per customer
  • Total number of customers

The MRR formula

Now that you have both numbers just multiply them together to get your MRR.

Monthly recurring revenue (MRR) Formula

Say your average revenue per customer is $150 and the total number of customers for the month is 1000. Your MRR would be $150,000.

6 tips for increasing your monthly recurring revenue

Now that you know what your MRR is and how to calculate it. Here are 6 tips you can use to increase your recurring revenue:

  • Create more upsell opportunities
  • Have different pricing plans
  • Customer Retention strategies
  • Create more upsell opportunities
  • Give your customers what they want
  • Get more leads/ potential customers

Now let’s go into detail about each.

Increase your prices

One easy way to increase your recurring revenue is to increase your price. However, if you do increase your price, you will need to ensure that you improve your product or service. This can include better features, better customer support and improvement to the product.

When you tell your customers why you’re increasing your monthly price, some will have a negative reaction to it.

But if you give a reason why you’re increasing your price, your customers will stay if they enjoy the product or service.

Have different pricing plans

You should consider having different pricing plans. Some companies will have a business model of having a free product, then have several premium plans that have more features than the basic plan.

When you have different plans, this allows your customers to choose which plan fits their needs. Be sure to split or increase your features for each plan, and make your most valuable features are part of the premium plan to influence people to make a purchase.

Create more upsell opportunities

Going back to having different pricing plans, you should find more opportunities to upsell. This can be limiting some of your features, and when the customers need it, this can be an opportunity to upsell them to a premium plan.

For example, say you’re an email marketing software. Your free plan allows you to have 1000 emails on their list. When customers gain more emails, this can be an opportunity to sell them to the premium plan. Since they need the premium features, they will be more likely to upgrade.

Give your customers what they want

When comparing your company to your competitors, are you the best choice? Do have everything your customers want or need?

One of the best ways to increase your recurring revenue is to give what your customers are looking for. Be sure that your product or service is the best for that price point.

You should implement a customer feedback strategy. This way you can fully understand what your current and past customers like and dislike about your product or service. Once you understand what your customers want, you’ll be able to decide which improvements to make.

Have customer retention strategies

You should find ways to keep your current customers. Besides, you cant be increasing your recurring revenue if you’re losing customers.

Having a customer retention strategy will help you increase your recurring revenue as it will help you grow your customer base.

Strategies like:

  • Implementing a CRM
  • Loyalty program
  • Customer success strategies
  • Customer care
  • Increasing your value by offering bonus perks

These customer retention strategies can be implemented right away!

Get more leads/ potential customers

Revisit your marketing plan and see what can be improved. Your marketing strategy when you first started will be different as you may have a bigger budget because your business started became bigger.

Marketing tactics like:

  • PPC ads
  • Content Marketing
  • SEO
  • Deals and promotions
  • Social media marketing

All of these marketing tactics can help you get in front of new customers to discover your brand!

Increase your recurring revenue today!

Now that you know what your MRR is, use these tips to increase it! You should always plan and research to find what works best for your industry.

What will work for one industry may not work for another.

How will you increase your monthly recurring revenue?