Monthly recurring revenue is a valuable asset because it is a stream that is foreseeable, consistent, and dependable, notes Telarus' Patrick Oborn.

Channel Partners

November 3, 2016

  • Reasons to Love Monthly Recurring Revenue

    Agents and VARs are always searching for the best way to leverage existing networks to create new income streams. Monthly recurring revenue is a valuable asset in this regard because it is a stream that is foreseeable, consistent, and dependable.

    In this gallery, Patrick Oborn, co-founder of master agent Telarus, runs down the types of MRR, how to expand your base, and why consistency is so critical.

    Patrick Oborn is a co-founder of Telarus, Inc. and an important driver in marketing and communication efforts. “What’s next” is what Patrick does, and has done since the beginning. Patrick wouldn’t take “no” for an answer during the startup phase of the company, coming up with the idea for GeoQuote (real-time quoting), lead sharing and more.

  • Reasons to Love MRR: The 3 Types


    Monthly recurring revenue is income that a company can reliably anticipate arriving every 30 days. It comes in three main categories:

    • New monthly recurring revenue is earned from new customer acquisitions.

    • Expansion of a current monthly customer base comes from upselling and cross-selling. Expansion revenue is derived from existing customer base versus new customer acquisitions.

    • Churn is revenue lost from customers who downgrade or fail to renew their services.

  • Reasons to Love MRR: Why You Should Care


    There are three benefits:

    Your budget process is more predictable. Monthly recurring revenue cash flow can provide a better handle on budgetary objectives than companies that conduct transactional business. You have a greater opportunity to determine what’s coming in the next few quarters.

    For example, since new spending cuts preceded current spending, new customers may lag, but MRR continues monthly income from existing customers.

  • Reasons to Love MRR: More Precise Budgeting


    MRR enables you to calculate your expenses accurately relative to your revenue. For example, can you hire an employee? How much can you spend on advertising this month? What is the financial outlook for the rest of the year?

  • Reasons to Love MRR: It Enables Higher Touch


    Recurring-revenue models provide a way to reach out to customers more frequently and to build brand loyalty.

    Companies with recurring-revenue models can also capture and analyze data that tracks consumer trends and preferences on a much more detailed level than is possible with traditional models.

  • Reasons to Love MRR: Business Expansion


    Expansion is a result of up-selling and cross-selling to your existing customer base. There are several ways to successfully do that in your business:

    Listen to your customers. Understand their problems and show them you take complete ownership of any issue. Provide each customer primary and secondary solutions. In turn, the customer will likely use you as a telecom consultant in the future.

  • Reasons to Love MRR: Share Upsell Opportunities


    You have upsell opportunity if you have products with additional or enhanced features. We all have a tendency to want a little more than we have; informing customers of certain enhanced features is a good way to entice them.

  • Reasons to Love MRR: Don’t Be Shy


    Share with customers the breadth of your company’s offerings to encourage cross-sell and more MRR. Your customers might have come aboard based on the strength of one of your solutions. They might not even realize you have other products to help solve some of their additional pinch points. Always educate customers about your full slate of offerings.

    While doing so, focus on the overall value versus the net cost and help the customer identify the big picture.

  • Reasons to Love MRR: Improve the Churn Rate


    Churn results in monthly revenue lost from customers that downgrade or fail to renew their services.  How can you improve the churn rate and increase customer retention?

  • Reasons to Love MRR: Consistently Deliver on Your Competitive Advantage


    There is no surprise as to why your customers became customers: Your products deliver an advantage that others do not.

    Once this advantage falters or fails, customers will look elsewhere. Consistent delivery is paramount to MRR. Don’t be complacent. Take advantage of today’s available customer communication and feedback technology. Do not communicate with customers only when they have a problem or a great upsell is available.

  • Reasons to Love MRR: If You Do Lose It …


    … find out why.

    If you do not understand why a customer canceled a service, how will you know what to improve on in order to prevent future churn?

    Proactively assure customers that you are delivering the best possible solution for their “problem.” Provide hard facts that back up their decision, like CAIDA rankings, case studies and references.

  • Reasons to Love MRR: It’s Foreseeable, Consistent, Dependable


    Agents who work to build an MRR business model enjoy the benefits of a revenue stream that is foreseeable, consistent and dependable. This, however, is not the end of the job. It takes constant existing customer care to prevent churn and a continual commitment to expanding the greater customer base.

  • Reasons to Love Monthly Recurring Revenue

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