How to Maximize Your Monthly Recurring Revenue (MRR) in 2023

Maximizing recurring revenue is the pain point for which many subscription-based businesses are looking for a solution. Why? Because maintaining the steady flow of the revenue stream is not an easy task.

• It becomes more challenging when revenue is to be maintained in the subscription businesses.

• Subscribers come for the purchase again and again. Every time, retailers have to offer them maximum customer experience.

• Subscribers change subscription plans. When plans are changed, there are needed adjustments in billing.

• Hiccups in payment processing can affect the flow of recurring revenue.

• Payment recoveries can be difficult if you do not plan for communication with the subscribers.

• Any change in the pricing plans can also affect the monthly recurring revenue.

If you are facing a leak in the revenue stream because of such issues, then the ultimate solution is the subscription billing software. If you are already using one, then it is probably time to move to a more robust platform that can fulfil your increasing business needs. And here is why:

Accurate Recurring Billing

Payment processing is not a standalone process rather it starts from even billing and invoicing. You need to make sure that billing is done accurately. And subscription-handling platforms do that feasibly. One of the major reasons for the fame of the subscription business model is that the customers find it economical. They pay for SaaS platforms for exactly what they use. They do not pay a penny more or less than what they have used. So, recurring billing platforms not only bill customers accurately but they also generate accurate invoices so that the customer can pay against these invoices in time and the flow of the revenue is maintained.

In-Time Payment Processing

When billing and invoicing are accurate, the chances of getting paid from most of the customers in time are high. How? The customer gets the invoice in time, he knows what to pay and when has to be paid. So, you have done everything rightly from your side. However, any mistake while billing and invoices mean you have lost the chance yourself to get paid on time. So, in-time recurring billing ensures in-time recurring payment processing.

Proration Management

Proration means the change in the subscription plan, and when the subscription plan is changed:

• Changes in the billing are made

•  Pricing plans are changed

• Payment methods may also change

• The amount already paid and the amount yet to be paid need to be adjusted

And all these changes when need to be managed automatedly, and recurring billing management platforms play their role. When proration is managed the way it should, the flow of monthly recurring revenue is maintained.

Friction-free Payment Processing

When payments are to be processed, payment gateways are a must. They are needed to ensure online payment security. However, sometimes payment gateways are down. So, if you use a subscription billing system, you can easily integrate third-party applications and payment gateways. These gateways ensure that payments are processed without any friction or hurdle. Payment gateways are very important if you want to maintain the flow of recurring revenue every month. Not just one but get more than one gateway integrated with your subscription management system. Even if one gateway is down, the others will help in smoothly processing the payments.

Third-Party Applications

Revenue management is not a one-step process. There are involved various stages. Sometimes, businesses need not just a subscription management system. They need other software and systems as well to smoothly process the recurring payments, the flow of revenue, and management of expenses etc. For that, they need advanced accounting and finance software and applications. These applications and software can only be used if you have a flexible and scalable subscription management system that can easily integrate with these applications. When these applications are integrated, you get a business solution that you can use to run the entire business.

Data Tracking

Another important feature that subscription businesses need to get paid in time is customer data tracking. You need to track the customer data so that you know the detail of the customers who have already paid you and the ones who have yet to pay the recurring charges against their invoices. This customer data tracking will help you identify the loyal customers and those who are about to churn. When customer activity falls, it clearly indicates that the customer is about to churn. And customer churn is another name for the leak in recurring revenue. So, track the customer data so that you know which customers need to be treated in which way. So, you get three types of information from customer data tracking:

• Customers who are about to cancel subscriptions.

• Customers who are loyal to you

• Failed payments

• Delayed payments

When you have this data, it becomes easier to streamline different business processes—churn management etc. so that you can receive payments in time and the flow of revenue is maintained.

Payment Recoveries

Subscription management platforms are needed so that you can deal with cases of failed payments and delayed payments. As has been mentioned that customer data tracking tells about the customers who are about to cancel subscriptions. When you have customer segmentation regarding customer data, it is easy to recover payments from customers. Payment recoveries also stabilize the flow of recurring revenue. So, retailers in the business industry, need to pay heed to the payment industry as well.

So, a subscription management system is compulsory for stable monthly recurring revenue (MRR). And what subscription handling software does for revenue has been discussed above. It is high time to opt for the right subscription management software. Even if you are already using one such platform, you need to keep analyzing if the system is fulfilling your needs or not. Sometimes, the business needs to change the subscription billing platform because the one that they use cannot fulfil business needs anymore. However, finding the right software can be taxing as well.

Refference: https://www.subscriptionflow.com/2020/09/what-is-mrr-and-why-is-it-inevitable-for-measuring-recurring-revenue-for-subscription-businesses/