Monthly Recurring Revenue Challenge

The shifting marketplace and IT business models are quickly evolving. Clients are requesting technologies be delivered "as a Service" ("aaS"). Recurring revenue is the lifeblood of any "aaS" or annuity services business. The metric that is used to track this pot of recurring gold is Monthly Recurring Revenue (MRR), sometimes known as Annuity Services Contract revenue. A healthy MRR makes a company more stable and predictable both operationally and financially. However, building a healthy MRR pipeline can present challenges for a company who is transitioning from a transactional revenue based model to an annuity revenue based model. As a company shifts to an annuity services model, they must infuse their pipeline with a high volume of managed services prospects customers build a steady stream of cash flow. Transitioning requires significant working capital and companies often will need to streamline their technical operations, determine a pricing strategy, restructure their sales teams, build a solid sales pipeline and rebrand their image.

Cardinal Points Group has helped a broad range of clients tackle these challenges and drive success throughout their business. One tool that we use to help you assess where you are in your transformation journey is our Monthly Recurring Revenue Tool. Using this tool we can help you assess your current position and enable you to analyze the scope and scale of your transformation. Here are just a few of the insights you can gain from engaging with this tool include:

  • Do you have enough multiyear contracts in your current pipeline?
  • Is your current MRR position enabling your goals for business growth?
  • Is your sales team positioned to generate the volume of opportunities to deliver bottom line results?

If you want to explore these questions and more take the Monthly Recurring Revenue Challenge. Enter a few key assumptions to establish your baseline results and discover the health of your current MRR. You will be able to review your results online and will also receive an email with additional analysis from our team.

Take the challenge. Good luck and good selling!
This number represents the total gross value of your average annuity contract.
Average standard contract terms typically range from 2 to 5 years.
A healthy gross margin can range from 35 to 65 percent.
Also known as Monthly Annuity Services Contract Revenue.
This represents the % of contracts successfully sold versus the total number of leads required.
Average conversion rates range between 2-20%.

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