What is MRR? Monthly Recurring Revenue for Your Business

As a business owner, not only is it beneficial to seek out multiple income streams, but offering products or services that can be renewed, also known as the recurring revenue model.

Monthly Recurring Revenue, often abbreviated as MRR, is a critical measure used by subscription-based businesses to calculate the total predictable revenue they can anticipate on a monthly basis.

MRR represents the most reliable income that a company can expect, not accounting for one-time or non-recurring revenues.

Recurring revenue model in simple terms is offering a product or service to customers that have a recurring fee.

A perfect example is subscription services like for membership sites or reseller web hosting. This type of revenue model is designed to help businesses to keep a constant flow of money in.

It is much better than say one-off sales because you only make money on time, instead of many times, until the customer cancels their plan. In fact, it’s becoming so popular that 63% of publishers are starting to offer readers a way to pay to access content, and in 2022, 41% of households are using subscription movie streaming services. In a way, it’s like selling your product many times over. Kind of cool, right?

In recurring revenue, there are a few types:

1. Fixed service charge over a period of time

This is where you pay one free over a period of time. For example, if you sell a WordPress theme or plugin license, that will give you unlimited access over a year’s time. When the year is up, you can choose to cancel or renew.

Many theme and plugin developers in the WordPress community offer this type of recurring revenue model. Yoast SEO is just one of many examples of this type of recurring revenue model.

2. Sunk money consumables

This is where you offer a product, and renew to keep using it. Services like Amazon Prime are perfect examples of sunk money consumables because you pay to access extra features on Amazon, from videos to free shipping, and all you do is pay a monthly subscription.

3. Automatic Subscription renewal

Automatic subscription renewal is pretty simple, as you purchase a subscription, and it will automatically renew the service until you cancel. Movie streaming services like Hulu and Netflix are great examples, as you can keep watching movies every month, until you cancel.

4. Billed per user

If you’re running an agency with several people on the team, and need to purchase a service for all of them to access the account, with their own individual login, you may need to buy a package based on how many users are needing access. SEMRush is a good example of a billed per user recurring revenue type.

5. Free lifetime access plan

Lifetime Access plans can be a good way to get customers in the door. You offer a free product or service that has limited features, and no expiration on the subscription plan. If the user exceeds the plan’s allotted features, then the company offers package upgrades.

Mailchimp offers a free forever plan, so if you never exceed what that plan offers, then you don’t need to upgrade. However, if your email newsletter list is super successful and has been growing, you can opt to pay for an upgraded account.

6. Multiple tiered pricing

A multiple tiered pricing type of recurring revenue, is where you allot the customer so much access, and give other levels to upgrade for more access.

If you take a look at the Verpex Reseller hosting plans, you’ll sell a few packages to choose from. The first package allows customers to host 15 cPanel accounts, 50GBs of disk space, and all sorts of other hosting features. However, if you need more cPanel reseller accounts, you can pay more to get more access.

Now that you’ve read about what types of recurring revenue types there are, here are some super easy ideas for you to consider. Each of these are really not too difficult to build.

Membership site

If you run an organization and would only like to offer access to those members for your services, you can certainly put together a subscription membership service. For example, if you offer private forums for your members, and access to limited to members merchandise, you can offer yearly subscription packages.

Product subscription service

Create a monthly product or care package of items to sell. Instead of selling them one time, you can offer it as a subscription, and ship out your merchandise each month, until your customer cancels the service.

Reseller web hosting

Reseller web hosting gives you the opportunity to sell a bit of web space to clients. You can choose how little or big of a web host package to sell, and give customers the choice to subscribe monthly or yearly.

Courseware

Like teaching? You can sell your full courses to people as a subscription service. You can sell as a one-off service or monthly renewal fee. Keep them as subscribers by gamifying the course, and giving completed lesson goers a certificate.

Sell licensed software

If you sell WordPress plugins or themes, or other online-based software, you can offer a yearly subscription. With a subscription, your users can get access to whatever you want to give them, including a year of technical support, or extra features. You can even sell plans to allow for your software to work on a specific number of sites or handle so many people.

Sell content

Got a blog or vlog? Got digital content like images or music or fantastic content that can’t be found anywhere else? You can sell access to these as a subscription service, much like Patreon. You can do this with your own website too!

The recurring revenue model is a smart choice for any business owner. If you’re not using it, you should start using it.

There are so many ways to offer a recurring service that will bring you automatic cash flow, which will save you time and money in the long run, so you can spend time either creating more content or other businesses, or just enjoying your life.

Convinced? Well, time to get cracking on planning your recurring revenue service, and making some moolah!