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Recurring Revenue Is A Great Thing, But What Keeps It Recurring?

More and more, I hear business owners saying they want to do less “projects” and generate more opportunities for recurring revenue. If you are in the product business, that means “repeat business.” If you are in the service business, it means retainers or monthly or quarterly income. It”s hard not to get stars in your eyes doing the math: X number of clients times Y $ per month= Z revenue you can count on. Not so fast. What are you going to be doing to make sure your clients believe in the value they receive for that regular check they write?

The first thing is to have a system that keeps track of your clients and all the business they do with you and the products and services you provide. The second thing is to communicate regularly the value they say they are receiving when you ask them: the outcomes that they told you they wanted when they signed up. The third thing is to stay in touch; mail (electronic & otherwise,) phone calls surveys, and breakfasts or lunches if practical. You don”t want to be a pest but you don”t want to be invisible. The further your customers get from the pain or outcome that caused them to sign up the greater the chance they will begin looking at the monthly bill first with skepticism (Am I getting my money”s worth?) and then with the desire to cut it off. The very important thing is to never, ever, ever treat any client like an annuity. It is impossible to hide that attitude if you and your people have, just like it is impossible to hide the value they are getting if you make sure they know it. Look for ways to increase you company”s recurring revenue, but put the support structure in place to sustain it.