Knowing how to predict the expenses and income of a business with a good accuracy rate is one of the most sought-after skills for professionals working in management positions.
After all, this gives the company better conditions to plan and carry out actions focused on growth.
In addition to all the experience and knowledge of decision makers, it is essential that the business model contributes to good sales performance.
Therefore, a recurring revenue scenario is one afghanistan email list 168973 contact leads of the most favorable.
In this post, we are going to understand why having predictable billing is so important for companies.
We will see what its main advantages are and how the technology segment has taken advantage of it by providing Software as a Service (SaaS).
Happy reading!
How to achieve recurring income and why is it important?
When we refer to recurring revenue, we are talking about a business's ability to sell continued access to a service provided over a certain period of time.
We can also call it a signature model.
This time window will depend on how the company decides to collect from its customers.
There are cases where the consumer pays monthly installments for as long as he wants to enjoy the solution, being free to interrupt the payment, and consequently, cancel the service whenever he wants — without penalties or additional fees.
The idea is to establish a long-term relationship with the base, which really generates benefits for the clients and does not keep them tied to a contract.
Another example is organizations that work with providing access to customers for an entire year.
This annual plan is provided through a charge every 12 months or by dividing the amount into 12 monthly installments.
This prevents one-off purchases from customers who may take a long time to purchase the products or services again or may not even return.
Dealing with such revenue spikes makes growth much more difficult because it leaves room for assumptions that undermine predictability.
On the other hand, it is a model defined by the challenge of keeping people engaged with the brand, to the point of making them renew their subscriptions frequently.