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Running your business without tracking recurring revenue is like driving a car with no map or navigation system. You would probably get somewhere, but you wouldn’t know where because you don’t have any markers to show you where you are or going.
A lot of small businesses rely heavily on their income being generated through various types of monthly subscriptions or memberships. This makes sense since it is easy for most people to be subscribed to an online streaming service like Netflix, or a membership site like Squarespace or Shopify.
But what if someone cancelled their subscription? Or what if they only used one of the services they paid for part-time?
You lose money when this happens! Because now you have to spend resources ensuring that person re-subscribes or finds another provider them, then you have to market these products to them, etc., which costs money. It also means you lost sales potential down the line.
Recurrent revenue is a crucial piece in making sure your business has enough income to survive. Luckily, there are ways to track it effectively. In this article, we will go over some tips and tricks for doing just that using the free tool at The Humble Bookseller.
The Humble Bookstore is a very popular digital book store that doesn’t make any profit off of selling books (they earn their revenues from affiliate marketing).
Recurring revenues are defined as those that occur regularly, with little to no interruption. This is clearly not the case for most large corporations, but it is becoming more common among startups and small businesses.
Recurrent revenue streams are usually business models or products that you offer your customers on a regular basis. For example, software companies such as Adobe, Box, or Microsoft offer their product free of charge to users while at the same time earning money from advertisements or additional paid features.
Many startups use the AdWords program to launch their business by creating an account with Google and spending funds to start advertising. Many people have heard about Dropbox because they always offer 2GB of free space!
These types of businesses depend heavily on repeat purchases, so they designed their system to keep offering their service free or discounted indefinitely. Technically, these services earn their ‘recurring’ designation every time someone uses their product.
The important thing to note here is that none of these products require payment during the initial usage, which makes them different than apps and gadgets that need to be purchased after the first use. These things cost upfront, but give away the goods for nothing in return!
This article will talk more about how to track recurrent revenue using analytics tools.
Supporting a business’s ongoing success with what it offers its customers is one way to identify potential high-paying services or products that can be resold over and over.
This is an excellent strategy for entrepreneurs who are looking to start their own businesses or are already running theirs but want to increase their income.
Many large companies use software as a service (SaaS) to offer their clients online applications, platforms, or tools to help them run their business.
By offering this service through a subscription model, your company gets paid every month without having to buy additional equipment or software.
These types of businesses depend on users downloading the app or tool and creating an account so that they can access all of their features.
They also benefit from repeated exposure because even if someone doesn’t actively use the app or program, they still need it to do his job.
Research shows that nearly half of smartphone users check out new apps at least once a week! This makes recurring revenue a powerful option for startups.
A few weeks back, I gave you my tips for how to increase your phone calls per day. One of the things that can make or break this strategy is keeping track of who you’ve called already and what happened after you left a call.
I mentioned using an app likeHubSpotto track all your touch points- we’ll cover that in more detail here soon. For now, though, know that there are three main types of touches during the sales process: meetings, conversations, and presentations.
Meetings are just plain old chats where two people talk for a while. Sometimes they’re between one person and another, but sometimes it’s as part of a group chat with several people. It could be face-to-face, over the phone, via video, or even text only.
Conversations are probably the most common type of contact. You have a conversation with someone about something. Maybe you made a strong argument, or you found a shared interest, or you both agreed on something. Or maybe you didn’t! Either way, you spent some time talking to each other and you remember the end result being a business meeting or transaction.
Presentations refer to when one person talks at length about something. This could be you giving a PowerPoint presentation, or a speaker doing so at a conference you attended, or a teacher asking questions in class.
A marketing touchpoint is any activity or event that encourages you to perform an action for Marketplace’s products and services.
These can be advertisements, messages, offers, statements, conversations, etc. that promote Marketplace’s products and services.
Most marketers spend time thinking about how they can create new touches, but what many don’t consider are the things we already do every day that help market Marketplace’s products and services.
We all interact with brands frequently – from listening to music produced by their artists to reading reviews of their products online. By looking at these interactions data-wise and analytics-based, we're able to determine if those brands are performing well and whether there's anything we can change to make sure everyone has a positive experience.
A product touchpoint is any activity or action that your company performs to promote an item or service. They can be done directly through marketing channels, like social media posts or advertisements, or they can be indirect, such as hosting a conference about the product.
Product touches happen every time you offer a coupon for the product, every time you launch a new version of the product, and every time you communicate how much value the product delivers. All of these things are examples of products having engagement events.
Tracking these event occurrences allows you to connect all of the different pieces of information about the product to determine what parts of the product are working and what could be improved. This way, you can make changes in the product to enhance its sales and/or use while still keeping it within the confines of legal requirements.
Hubspot is a popular online advertising software used to create, manage, and optimize websites and digital campaigns. It is very common to see companies using Hubspot to track their recurring revenue and conversions. These tracks can easily be modified or removed at any time, but understanding why and how can help you better understand the effectiveness of the program.
A financial touchpoint is any activity or event that can prompt you to think about money, include an indirect cost like buying coffee, and/or create a sense of expectation around your spending (like receiving a monthly salary update).
These types of reminders are important because they influence how you feel about yourself and your money. For example, if you get a pay rise announcement, it may make you happy and boost your self-confidence, but it might also give you a little bit more money to spend!
Recognizing these instances and being aware of their effects will help you to stay in control of your finances. If you’re conscious of what could be triggering a bout of overextending, you can take steps to avoid it.
By becoming familiar with these triggers, you’ll know exactly what needs to be done to keep yourself from overspending. It’s better to recognize them early than to lose control once they’ve got a hold of you.
Another way to measure how successful your business is is by looking at year-over-year (YoY) growth in recurring revenues. This can be done for both sales and subscription services!
Recurrent income comes from customers that pay you regularly, typically monthly or yearly, but not necessarily both every month. These types of clients are loyal and continue to spend money with you because they perceive value from what you offer.
Most businesses rely heavily on sales for recurrent income, which is why most startups don’t always have the luxury of staying within budget. It's great to earn a lot one time, but not if you want to keep doing it.
That said, there are ways to increase spending through repeat purchases, even when budgets are being cut back. You just need to know how to market yourself.
Starting a recurring income source is not as difficult as many make it seem. In fact, most successful entrepreneurs have several strategies for generating recurring income.
Most of these strategies are done through the use of an online platform or software that they develop or market themselves. This way, their hard work gets recognized and then others can take what they create and enhance it to fit their needs.
By offering your services via a service or software that people pay for on a regular basis, you open up new opportunities to make money.
