Innovative Strategies to Skyrocket Your Monthly Recurring Revenue (MRR)
Sep 7, 2024
6 min read
As a business leader, you understand the critical importance of Monthly Recurring Revenue (MRR) for sustainable growth and long-term success. This comprehensive guide presents 12 powerful strategies to increase your MRR, complete with real-world examples and quantitative business impacts to demonstrate their effectiveness.
# 1. Implement a Tiered Pricing Structure
Offer multiple pricing tiers to cater to different customer segments and capture more value from those willing to pay for premium features.
Widely applicable across SaaS and subscription businesses
 Consistently effective in capturing more value from existing customers
Example Strategy: Slack's four-tier pricing model (Free, Pro, Business+, and Enterprise Grid)
Impact: 50% increase in paid customers upgrading to higher tiers within the first year
Key Takeaway: Analyze your offering and structure tiers to encourage upgrades as customers grow.
"Tiered service offerings allow clients to choose the level of support they need, increasing both satisfaction and revenue."
- Gary Keller, Co-founder of Keller Williams Realty. Source: "The Millionaire Real Estate Agent"
#2. Focus on Customer Success and Retention
Implement a robust customer success program to reduce churn and increase customer lifetime value.
Fundamental to all subscription businesses
High retention rates directly impact MRR and reduce churn
Example Strategy: Salesforce's customer success managers, training resources, and community events
Impact: 92% customer retention rate, contributing to steady MRR growth
Key Takeaway: Invest in your customers' success through onboarding, training, and ongoing support.
"Client retention in real estate isn't just about the transaction—it's about building relationships that last a lifetime. Every interaction is an opportunity to cement that bond."
- Barbara Corcoran, Founder of The Corcoran Group. Source: "Shark Tales"
#3. Introduce Cross-Sell and Upsell Opportunities
Expand your relationship with existing customers by offering complementary products or services.
Widely applicable across various industries
Effectiveness can vary based on product ecosystem
Example
Strategy: Amazon Prime's evolution from free shipping to a multi-service subscription
Impact: Prime members spend an average of $1,400 per year vs. $600 for non-members
Key Takeaway: Identify opportunities to expand your offering with complementary solutions.
"In real estate, your service doesn't end at the sale... Your clients' success is your success."
- Dave Liniger, Co-founder of RE/MAX. Source: RE/MAX Times Interview
#4. Implement a Usage-Based Pricing Model
Tie pricing to actual usage, allowing customers to pay for exactly what they need.
Particularly effective for API and cloud services
Aligns pricing with value delivered, appealing to both small and large customers
Example
Strategy: Twilio's API call-based pricing
Impact: 55% year-over-year revenue growth in 2020
Key Takeaway: Consider linking pricing to usage metrics to scale with customer growth.
"Price is what you pay. Value is what you get."
- Warren Buffett, CEO of Berkshire Hathaway. Source: Berkshire Hathaway Annual Shareholder Letter
#5. Offer a "Pause" Option Instead of Cancellation
Give customers the flexibility to pause their subscription instead of canceling outright.
Easy to implement for most subscription businesses
While effective, the impact is smaller compared to other strategies
Example
Strategy: Headspace's three-month subscription pause feature
Impact: 15% reduction in churn rate after implementation
Key Takeaway: Implement a pause option to reduce churn and increase the likelihood of reactivation.
"In real estate, market conditions change. Offering clients the flexibility to pause shows you understand their needs and builds trust for the long term."
- Mauricio Umansky, Founder and CEO of The Agency. Source: Inman Connect New York Conference
#6. Create a Community-Driven Subscription Model
Build a subscription model that focuses on creating a valuable community.
Highly effective in creating sticky products and services
 Applicable to various industries, from fitness to professional networks
Example Strategy: Peloton's fitness community and challenges
Impact: 92% 12-month retention rate for digital subscriptions
Key Takeaway: Foster community among subscribers to increase engagement and retention.
#7. Implement a Freemium Model with Strategic Limitations
Offer a free version of your product with carefully chosen limitations to drive upgrades.
Effective for products with network effects or high viral potential
Lowers barrier to entry while encouraging upgrades
Example Strategy: Dropbox's free 2GB storage plan with paid upgrades for more space
Impact: Conversion rate of 4% from free to paid plans, 4x industry average
Key Takeaway: Design your freemium offering to showcase value while encouraging paid conversions.
 "Building a community around your real estate brand isn't just about selling homes—it's about creating a sense of belonging that keeps clients engaged long after the transaction."
- Fredrik Eklund, Co-founder of The Eklund|Gomes Team at Douglas Elliman. Source: "The Sell: The Secrets of Selling Anything to Anyone"
#8. Leverage Artificial Intelligence for Personalized Pricing
Use AI to analyze customer behavior and offer personalized pricing and bundles.
Growing in effectiveness as AI technology improves
Applicable across various subscription types, from content to SaaS
Example Strategy: Netflix's AI-driven content recommendations and personalized plan suggestions
Impact: 80% of Netflix viewer activity is driven by personalized recommendations, boosting retention
Key Takeaway: Invest in AI to tailor offerings and pricing to individual customer needs and behaviors.
"AI is probably the most important thing humanity has ever worked on. I think of it as something more profound than electricity or fire."
- Sundar Pichai, CEO of Google and Alphabet. Source: Google I/O Conference
#9. Implement a Success-Based Pricing Model
Tie your pricing to your customers' success metrics, aligning your incentives with theirs.
Highly effective in aligning incentives with customers
Particularly suitable for performance-driven industries (e.g., advertising, sales tools)
Example Strategy: AdRoll's performance-based pricing for digital advertising
Impact: 97% customer retention rate, significantly above industry average
Key Takeaway: Align your pricing with customer outcomes to boost both retention and perceived value.
"Tying our success to our clients' success isn't just fair—it's the future of real estate. When they win, we win."
- Glenn Kelman, CEO of Redfin. Source: Redfin Q3 Earnings Call, 2019
#10. Offer Long-Term Contract Discounts
Incentivize longer commitments with discounted rates for annual or multi-year contracts.
Relatively easy to implement
Effectiveness can vary based on industry and customer preferences
Example Strategy: Asana's discount for annual billing
Impact: 5% increase in annual contract value and 10% improvement in customer lifetime value
Key Takeaway: Use discounts strategically to encourage longer-term commitments and reduce churn risk.
"Long-term contracts in real estate, like property management or investment advising, provide stability for both the client and the agent. Incentivize these with smart discounts."
- Spencer Rascoff, Co-founder of Zillow. Source: Zillow Group Earnings Call
#11. Create a Partner Ecosystem with Revenue Sharing
Develop a network of partners who can sell or integrate your product, sharing revenue to incentivize growth.
Highly scalable approach to expand reach and revenue
Particularly effective for platform businesses
Example Strategy: Shopify's app store and partner program Impact: Partners generated $12.5 billion in revenue in 2020, contributing to Shopify's growth
Key Takeaway: Build a partner ecosystem to expand your reach and create new revenue streams.
"In real estate, partnerships amplify our reach and value. From mortgage brokers to home inspectors, a strong partner network benefits everyone—especially the client."
- Sherry Chris, President of Better Homes and Gardens Real Estate. Source: RISMedia Real Estate CEO Exchange
#12. Implement Dynamic Pricing Based on Customer Lifecycle
Adjust pricing based on the customer's stage in their lifecycle with your product.
Effective for products with clear customer growth stages
Allows for value-based pricing as customer needs evolve
Example
Strategy: HubSpot's graduated pricing based on contacts and features used
Impact: 33% year-over-year increase in average subscription revenue per customer
Key Takeaway: Align your pricing structure with the evolving needs of your customers as they grow with your product.
"Our value to clients evolves throughout their homeownership journey. Our pricing should reflect that—from first-time buyers to seasoned investors."
- Pamela Liebman, President and CEO of The Corcoran Group. Source: The Real Deal Interview
5 Main Things to Remember
The most effective strategies tend to focus on aligning pricing with value delivered and fostering long-term customer relationships.
Strategies that create community or ecosystem effects (like community-driven models or partner ecosystems) show particularly strong results.
Data-driven approaches, such as AI-powered personalization and usage-based pricing, are growing in effectiveness as technology improves.
Even strategies with smaller direct impacts (like offering a pause option) can be valuable when combined with other approaches.
The most effective strategy for a particular business will depend on its specific industry, customer base, and product offering.
By implementing these strategies, you can create a robust foundation for MRR growth. Remember, the key is to consistently deliver value to your customers, giving them reasons to not only stay but to deepen their relationship with your business. Start small, measure your results, and iterate based on what works best for your unique business model and customer base.
Disclaimer: Effort has been made to ensure accuracy. Fervor Marketing assumes no responsibility or liability for any errors or omissions in the content of this site. The information contained in this site is provided on an "as is" basis with no guarantees of completeness, accuracy, usefulness or timeliness.
Hi, I'm Jocelynne Haslett, Founder and Fractional CMO at Fervor Marketing Solutions.
Follow me on LinkedIn for more Insights Book a Discovery Meeting