What is one growth strategy to increase recurring revenue in a small business?
To help small businesses increase recurring revenue, we asked small business owners and consultants this question for their best advice. From upselling with add-ons to solidifying a content marketing strategy, there are several growth strategies that may help your small business increase its recurring revenue.
Here are 12 business growth strategies to increase recurring revenue:
• Upsell With Product Add-ons
• Send Personalized Greeting Cards
• Do One Thing Well
• Convert Customers to Monthly Or Annual Billing
• Get More Leads
• Create a Referral Program
• Add a Yearly Pre-payment Plan
• Unbundle Items and Segment Timing to Increase Revenue
• Include Monthly Surcharges for Seasonal Services
• Consider All Relationships as Part of the CX Journey
• Use Remarketing to Increase Recurring Revenue
• Solidify Content Marketing Strategy
Upsell With Product Add-ons
We never miss an opportunity to try to upsell our patients on a special product or service add-ons. Not everyone will want these services, but some will gladly accept them. If these add-on services are offered at a special rate, you can get enough people to sign up for them and bring in a welcome amount of additional monthly revenue.
Henry Babichenko, European Denture Center
Send Personalized Greeting Cards
Sending personalized greeting cards, whether physically or digitally, can help with recurring revenue by making customers feel special and valued. Sending them cards to wish them happy birthday, happy holidays, etc. can show that you remember dates that are important to them, rather than only contacting them to encourage them to buy something from you. You can set up automatic campaigns to send your customers birthday cards, thank you cards, happy anniversary cards, and more so you never miss an important date. Including special offers like gift cards, extra money off future orders, free shipping, or bonus gifts the next time they purchase can help act as an incentive to continue to shop with you.
Maegan Griffin, Skin Pharm
Do One Thing Well
Don’t be tempted to jump from idea to idea and strategy to strategy, do one thing well and stick to it. When you pick one great idea and really stick to it – maybe testing and tweaking it along the way – that is the fastest route to success and replicable, recurring results. Don’t become “Jack of all trades, master of none.”
Stewart McGrenary, Freedom Mobiles
Convert Customers to Monthly Or Annual Billing
To increase recurring revenue in a small business, you have to increase the number of customers who are billed on a recurring basis, such as monthly or annually. This can be done by targeting new customers who may be a good fit for a recurring billing arrangement, or by encouraging current customers to switch to a recurring billing arrangement. Additionally, businesses can offer incentives to customers who sign up for a recurring billing arrangement, such as a discount on the total cost of services.
Matthew Ramirez, Paraphrasing Tool
Get More Leads
Your customers, who are a product of your leads, are the source of monthly recurring revenue. Inbound marketing tactics provide a high return on investment, but they take longer to attain optimum effectiveness; outreach strategies are more direct, but they require more commitment. More leads will mean more recurring income in either case, as long as you can quantify marketing ROI (comparing your marketing dollar expenditure to the recurring revenue it creates).
Gerrid Smith, Joy Organics
Create a Referral Program
Incentives like referral programs are always a great way to get your most loyal customers to buy in, time and again. However, to really make this strategy impactful, take the time to study the shopping behavior of your target audience so that you’ll know exactly what they’re looking for and how you can meet their needs. More importantly, make sure you’re always keeping them updated via emailers and newsletters so that your efforts aren’t wasted.
Demi Yilmaz, Colonist.io
Add a Yearly Pre-payment Plan
If you don’t yet offer a yearly pre-payment option you should invest in one. It’s a great way to achieve growth in revenue since yearly pre-payment options with some form of discount are bound to attract lots of long-term customers.
Say you offer a 30% discount on a 100 dollar/year product or service. That will give you 70 dollars for 12 months of service. It sounds like little return for your company, as that only gives you 5,80 dollars per month. But in the end, it’s still much better than only getting, say, 30 dollars for 3 months of service and then losing your customer to a competitor. So if you haven’t already, add an option for a yearly pre-payment plan with some sort of attractive discount.
Natalia Brzezinska, PhotoAiD
Unbundle Items and Segment Timing
Small businesses that are successful spend a considerable amount of time looking for ways of upselling additional products and services to increase recurring revenue. The most effective strategy to accomplish this comes in two parts, heightening customer interests and engaging them with the opportunity at the correct time.
To generate interest, unbundle packages to an a la carte format which allows you to offer upgrades, while dropping those features in a bundle that a customer does not view as adding value. When a customer has successfully completed the use of one of your products, the timing is perfect to create upsell opportunities by offering another feature to that model. By segmenting your offerings and monitoring purchase dates, you can create the most opportune revenue growth formula.
Woody Sears, Hearhere
Include Monthly Surcharges for Seasonal Services
If you provide services that are in demand in certain seasons, your profits may increase during those times year, but your operating costs may go up as well. This is why I encourage you to include monthly surcharges for those seasonal services. Even if you’re able to keep costs down, those surcharges can be seen as a convenience fee of sorts that will help you keep everything running smoothly the rest of the year.
S. White, Novus Maintenance
Consider All Relationships as Part of the CX Journey
The customer journey in a recurring revenue model is cyclical, with the client going through the basic processes of sell, renew, upgrade, and add-on or adapt. Customers stay engaged with a firm when it provides the right products/services at the right time and at the right price. This is what we refer to as the Continuous Customer journey. When a customer no longer derives value from the firm and seeks to end the relationship, the journey is broken. According to our model, this is a salvage point when proving the ability to give value and steadily build it over time can still bring the consumer back.
Sumit Bansal, TrumpExcel
Use Remarketing to Increase Recurring Revenue
Retargeting is a growth strategy that small businesses should be using to increase recurring revenue. Using remarketing tactics can actually be beneficial for both the brand and the customer because it offers brands the ability to market to customers in a more personalized way. For example, if a fitness brand offers products for different types of workouts, being able to showcase the most relevant products for each customer based on the pages they visited on your website or items they placed in their cart can help increase the chances that they make a purchase.
Brett Sohns, lifegoalinvestments.com
Solidify Content Marketing Strategy
Having a solid content marketing strategy is hugely important to help grow your business. Consistent, relevant content is key for building organic traffic. It also gives you a way to further connect with customers beyond blog posts, with interactive, educational content that establishes your authority on what you do. Additionally, becoming an authoritative resource in your industry will help gain new attention and attract customers.
Alyssa Berman-Waugh, Level Home, Inc.