GUIDE: GROW YOUR BUSINESS | STEP TWO:
Increase Cash Flow with Recurring Revenue
Recurring revenue is income generated in a business that comes in regularly, usually monthly or yearly, and that is considered very stable. Recurring income allows revenue to come in with a high degree of certainty. With a recurring revenue model, businesses can predict what percentage of revenue may be lost each month and also how many new subscriptions are likely to join.
The freedom of this type of income stream also opens up new opportunities for your business, which might include:
- More time to develop the best customer service for your current customers
- Better customer service and overall experience increases referrals and brand loyalty, which brings in new customers naturally and organically
- Reduced marketing/sales costs because you no longer have to pitch new customers as often
5 common ways to create recurring revenue for your business:
Create a Membership Program
Unlike a website like Facebook or YouTube which offers free access to their platform, a membership site is a place where you can deliver content, build community, and offer coaching or consulting for a monthly recurring fee.
Physical Product Subscriptions
This is something we see all too often these days, and for good reason — it works! The box subscription model has changed how some industries are getting their product in front of customers. Perhaps you are a huge fan of coffee and love trying new flavors. You could subscribe to a service which sends you different kinds of coffee brands every month for you to try — or maybe you have your favorite brand sent to your front door every month. Could you replicate this in your business? Can you send your physical product, or aspects of your product, to your customers throughout the year to increase sales?Develop a Software as a Service (SaaS) Product Offering
Has your company created a custom made software to help you manage your projects? What about a software to identify client leads or track inventory? Consider allowing other companies to use your software for their own purposes. This will both create recurring revenue, and increase brand awareness as an industry leader.
Become an Affiliate for Other SaaS Products
Just because your company hasn’t created your own software doesn’t mean you can’t make money for promoting SaaS products! If your customers, or even random visitors on the internet visit your website, and you direct them to another company’s software and they subscribe, you could collect fees for discovery — or maybe even a portion of the monthly revenue generated from that customer!
Create Service or Retainer Plans
Just because your customer purchased your product doesn’t mean that the relationship has to end! Perhaps you could create a service plan where you regularly visit their office to conduct maintenance on the product. Perhaps you are a web designer and share new marketing materials or a website refresh every quarter. The possibilities are endless!
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GUIDE: GROW A BUSINESS
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