Subscription-based SaaS businesses must consistently and accurately track their MRR (monthly recurring revenue). As the name implies, monthly recurring revenue (MRR) is subject to monthly fluctuations based on new revenue generated and revenue lost due to churn. Tracking changes over time, the net MRR is a crucial performance metric every B2B SaaS business must monitor.
The net MRR growth rate considers new revenue, upgrades, downgrades, cancellations, and other crucial elements to ensure the overall profitability of a business. Achieving the best outcomes requires focusing on important performance indicators. These include decreasing the MRR churn rate, encouraging current customers to upgrade, and drawing new paying customers to your sales funnel.
This article will explore five main MRR growth strategies that SaaS enterprises can leverage.
#1. Remind customers why they chose you
Your company’s most loyal customers may not appreciate receiving a constant stream of emails throughout the day. However, failing to follow up may also create a similar sentiment toward your brand. Therefore, it is imperative to strike a balance through messaging and regularly communicating with customers to emphasize why they chose you in the first place.
Leverage push notifications: Help your current B2B SaaS customers stay up-to-date with the latest software versions to enhance your device’s performance and user experience. For this, send them notifications of updates to help them enjoy the benefits of improved functionality. By incorporating in-app lessons and notifications, your app can offer a seamless user experience and a gentle reminder of its value to the client.
Achieve a state of balance and stability: Establishing a meaningful connection with your consumers at crucial moments can pave the way for a successful partnership. In today’s competitive market, meeting the demands of consumers is crucial to SaaS customer retention and driving their loyalty.
Doing so may lead to customers discontinuing your product use during the initial onboarding phase. Therefore, keep potential customers from competitors by incorporating effective onboarding and communication to alleviate their experience.
Add a dash of kindness: Incorporating acts of kindness into your communication strategy goes a long way. Consider occasionally sending polite and gracious emails to show appreciation and build positive relationships. Moreover, think of proactively notifying customers of an upcoming credit card expiration date, ideally one to two months in advance. Such acts ensure that they have ample time to update their payment information and avoid potential disruptions to their service. Expressing gratitude for a gentle nudge can make all the difference in avoiding an untimely departure contributing to reduced MRR.
#2. Use data to make informed decisions
Data analytics allows marketers to determine what initiatives are directly impacting revenue. Hence, it is critical to include advanced data analytics in your revenue marketing efforts so that the sales and marketing teams can attribute their campaigns directly to the revenue goals.
Identify areas of enhancement by analyzing data trends and observing customer behavior (and interactions) with the service. Such information enables understanding the features and services that resonate most with clients, offering ways to tweak products and drive innovation based on user preferences.
Important indicators include customer turnover, acquisition cost, client lifetime value, and average revenue per user (ARPU). Leverage such indicators to get a bird’s-eye view of your company’s performance and to inform strategic choices. The best way to raise MRR is by conducting A/B testing for SaaS products and attentively monitoring the statistics.
#3. Ensure product enhancement
Enhancing your product is another highly impactful approach to boost MRR since it optimizes user satisfaction. Moreover, it may be necessary to introduce novel functionalities, refine current ones, or elevate the overall user journey.
Imagine a scenario where your customers witness a consistent enhancement in your product, resulting in increased value for their business. By doing so, users are more likely to maintain their SaaS subscriptions and upgrade to a premium tier. Consistently seeking input from your customers and incorporating their ideas can effectively improve products in a significant way.
#4. Offer premium feature trials
Maximizing revenue from your clientele is an excellent strategy to boost expansion revenue. Offering users the opportunity to test advanced features before purchasing can simplify the decision-making process. It can help determine whether those additional capabilities are necessary to enhance their experience. This can incentivize individuals to upgrade their plans to continue accessing these added features beyond the trial period.
In today’s market, providing free trials can be a powerful tool to encourage users to upgrade their plan, contributing to MRR growth. By offering a taste of the premium features, users will likely switch sooner rather than later.
#5. Encourage referrals
Next, you can test the power of referrals to increase monthly recurring revenue for your B2B SaaS product. Tap your current users to provide critical product reviews or references that promote building a positive brand image.
Alternatively, a referral program can encourage your clients to refer you to others. Since your customers understand your product and its benefits, they can easily encourage others to subscribe to your packages.
Moreover, consider including discounts to increase word-of-mouth advertising wherein you provide commission to existing clients if new consumers sign up (through their reference). Offering a free month’s service for each referral is another great method to thank loyal customers.
There are several factors to consider when crafting a plan to boost MRR. Using the abovementioned tactics, B2B SaaS businesses may consider boosting their MRR as a key SaaS growth strategy to ensure long-term growth and profitability.
Remember that the most prosperous SaaS businesses prioritize their customers above anything else. They work tirelessly to satisfy customers’ needs, improve their offerings in response to suggestions, and forge enduring bonds. When you prioritize customer experience, MRR growth follows as a byproduct.