As a technology service provider, you’re constantly faced with a never-ending list of business challenges. The most difficult one can be increasing monthly recurring revenue (MRR). Many service providers struggle to increase their MRR because they don’t have a clear sales strategy in place.
In this blog post, you learn about the most common sales challenges service providers face when it comes to increasing MRR. By reading through our tips and advice on overcoming these issues, you can adopt the strategies that work for your business to gain more MRR over time.
Before we move forward with talking about those sales challenges, let’s look at what MRR is.
Monthly recurring revenue is a metric that measures the amount of money a company earns from monthly subscriptions to its products and services. This number can help determine a company’s success and is essential for understanding whether it can survive without any long-term projects.
MRR has many benefits for companies:
Prospecting for new leads can be a time-consuming and challenging process, especially if you don’t have a solid lead generation strategy in place. Fortunately, there are many ways to find new customers. It’s essential to tailor your approach to your business.
Common methods of prospecting for new leads include:
One sales challenge that many service providers face is building effective pricing models. This task can be daunting because it requires knowledge of your customers and their needs. It also requires an understanding of the value you’re offering them in exchange for payment.
While there are several ways to set your prices, here are some standard methods:
Regardless of the method you choose, make sure you have a system, like Goolash from Zomentum, to audit accounts on a monthly basis to ensure client billing matches any expenses you incur from your vendors.
Many companies still run on outdated technology. Or they might manage entire business processes, such as accounting, manually rather than using software to complete them more efficiently and accurately.
One of the best ways to overcome this sales challenge is to build relationships with these prospects before you even try to sell them your product or service. Show them you understand their business and the challenges they face. Be prepared to offer a solution that will make their life easier.
Once you establish a relationship with them, pitch your product or service. Instead of talking about its features, focus on improving their business process and saving time.
Another challenge service providers face when increasing MRR is handling repetitive tasks without automation. Automation involves using software that manages various business functions or processes. You can use it for everything from billing clients to sending invoices and creating quotes for prospective customers.
While you can use many different applications to automate your business, finding the right ones for your needs is crucial. For example, you can use:
Zomentum is a revenue management platform that helps service providers increase MRR by tying their various systems together. With Zomentum, you can automate billing reconciliation, quoting, and order management tasks. This single platform saves you time and enables you to focus on more critical tasks, like selling your services.
Now that you understand these four sales challenges, it's time to get to work and overcome them. With a little effort, you can increase your MRR and take your business to the next level.