Looking for ways to strengthen customer loyalty and increase profit? Satisfy both by implementing a recurring revenue stream. While it may seem like a difficult endeavor, it doesn’t have to be. Here is a brief look into a few recurring revenue ideas spanning several industries and their benefits.
First, what is recurring revenue? Essentially, it is a service or product purchased on a predictable basis. The customers may pay monthly or annually for an ongoing delivery of goods. Companies employing this type of system find it easy to calculate accurate ROI projections while reducing the time and resources spent on attracting new customers.
There are numerous ways to add recurring revenue to almost any business, although some may be better suited toward specific industries. An organization can extend access to a program — a software as a service (SaaS) — based on a subscription. It can host online classes or offer a library of content. A highly effective method is to create a membership program. This overarching approach can be applied to almost any industry.
A recent study found nearly 25% of surveyed businesses had implemented a membership revenue model. What’s more, another 22% of the same group could see the value for a recurring model for their business, but just didn’t know how to put it into action. Such membership-based and recurrent services are everywhere. Everyday consumers are already accustomed to the cyclical payment structure for the products and services they enjoy.
The benefits for adding one to your business are plentiful. From predictable income and stable metrics to a higher customer lifetime value and an increased brand impact, the advantages add up quick. Other benefits companies see after implementing a recurring revenue stream is lower stress.
Instead of chasing sales or new customers, they can utilize a payment integration service to streamline their continual revenue from these “automatic customers.” Lastly, with guaranteed income coming in, it offers more time to focus on improving products, marketing strategies, and the business overall.
There are also numerous benefits for the consumer. Depending on the promotion, clients can access more content at a lowered cost, such as a music library or news outlet. They may also receive higher-quality products, since the business can devote more to product development.
Another benefit customers deeply appreciate is a sense of community. Membership programs can offer them access to a group of like-minded people to share their opinions and maybe even a bond. All the while, your business is booming from the increased attention and retention.
For additional recurring revenue ideas and ways to implement them, please see the accompanying resource.
Infographic created by Clover Connect, a payment integration solutions company