Why is monthly recurring revenue (MRR) an important metric for a business? MRR not only guarantees monthly revenue for the business, it also makes it easier to plan for the future in terms of income. Recurring revenue via subscription models provides stability for the business by knowing what to expect in revenue each month. For example if you have 10,000 subscribers who pay you $9.99 per month, then there is a guaranteed revenue of $99,900 each month.
The MRR model allows you to automatically bill your subscribers on a monthly basis, which in return lowers your administration costs as a good subscription billing software does all the work for you. Basically, a business charges the value it offers its subscribers so it’s a win-win situation.
There are multiple ways to start earning money via MRR such as:
- Converting one time services into subscription services
- Providing your subscription services under contracts for predictable revenue for a fixed time period
- Providing physical products subscriptions (e.g. subscriptions for coffee or food)
- Provide software as a SaaS offering
- Provide premium services as a subscription (e.g. unlimited express shipping or premium loyalty offers)
- All-you-can-eat models for restaurants
CRM.COM is a global specialist in subscription billing and provides all the features needed to set up a subscription business. CRM.COM secures and helps increase your revenue by allowing you to have a recurring relationship with your subscribers and engage with them with personalized services, products and offers.
by Frini Pouyiouka
Senior Sales & Marketing Consultant