With customer acquisition costs on the rise, it’s crucial to incorporate revenue-generating strategies like these to make the most of your customers and keep your revenue on the rise.
This not only enables you to scale your operations and invest in innovation—increasing your earnings also allows you to forge lasting customer relationships, which is pivotal in today’s economy.
In this article, we'll provide actionable tips to analyze and improve the three most important revenue metrics for your business: monthly recurring revenue (MRR), average order value (AOV), and total net sales.
While there are other revenue metrics you should monitor, AOV, MRR, and total net sales offer a view into all aspects of your business, including financial performance, customer behavior, and growth potential, helping you optimize your revenue-generating strategies.
Monthly recurring revenue
Monthly recurring revenue is your business’s reliable revenue stream—but why is it important to focus on MRR as a key performance indicator?
This KPI provides a holistic view of your company's predictable revenue generation, performance, and growth potential. Analyzing and improving your MRR helps you anticipate challenges, plan for the future, and communicate effectively with investors and stakeholders.
Step 1: Use Recharge features to help you increase MRR
You can increase your MRR through a number of strategies, including expanding your customer base, focusing on customer retention, and offering new types of subscription programs. As a first step towards leveraging these strategies to increase your MRR, implement the following Recharge products and features.
Memberships: Turn customers into loyal fans and increase your overall customer spend by incentivizing your members with benefits, such as free shipping, exclusive product access, member-only events, and more. Remember: Loyal customers are more likely to refer others to your business.
Discounts: Incentives can attract new customers and encourage existing ones to buy more frequently or in larger quantities. With Recharge, you can implement a variety of discounts—event and seasonal, first-time shopper, free shipping, volume, and customer-specific discounts—on a single purchase or a recurring subscription.
Multi-currency: Reach new customers and expand your global reach through multi-currency. This gives your customers a better experience that allows them to have subscriptions in multiple currencies, and choose which currency they want to be billed in when adding a new address.
Step 2: Implement these tips from our Recharge experts
If you’ve already implemented the above features and products, take a look at the following tips we’ve collected from our MRR experts here at Recharge.
Tip #1: Ensure you’re offering the right products as subscriptions, with the right shipment intervals
To stay competitive in the subscription industry, conduct frequent market analyses to ensure you’re giving your customers the product they want, at the correct shipment interval. As a rule of thumb, subscription products should be consumable, priced appropriately, and high-quality. You should also always take other factors, such as your competitors’ shipping rates and return policies, into consideration.
Tip #2: Continuously test and improve your subscription landing page
To figure out what resonates with your customer base, consistently A/B test your subscription landing page. For example, use A/B testing to determine which color, layout, headlines, CTAs, and product images are moving the needle.
Tip #3: Cultivate a recurring mindset through customer relationships
Find meaningful ways to connect with your subscribers to not only strengthen trust in your brand but also create a feedback loop that leaves your customers feeling heard. Consider launching podcasts that educate and entertain, responding to customers’ content on social media, or creating a community platform where users can interact with your brand and each other.
Average order value
When someone lands on your website, there is only a 2.8% chance they convert into a buyer. By increasing your average order value, you can not only maximize earnings from each coveted transaction, but you can also track which customers are purchasing more or higher-priced products, and strategically implement your future upsell or cross-sell opportunities.
Step 1: Use Recharge features to help you increase AOV
The following Recharge features have been designed to help you increase AOV without reinventing the wheel. Before you try anything else, make sure you’ve taken advantage of the following Recharge tools:
One-time products: Make it easy for your subscribers to try new products and increase the value of their orders by offering a one-time purchase version of your subscription product and promoting it both on your website and in your customer portal.
Upsell & cross-sell: Increase the value of customers’ orders with targeted product recommendations at the right time and location. In addition to promoting product recommendations in the customer portal, also incorporate these recommendations in your emails. If you use Klaviyo, Quick Actions allow you to promote one-time product additions to subscriptions, or in other email providers, direct checkout links are a great solution for improving upsell conversion.
Bundles: Increase your AOV by combining multiple products into one curated box—such as a best-sellers or seasonal box—or allowing your customers to personalize their own bundle, adding order value for both your one-time and subscription customers. *Note: This feature is available free of charge to all merchants on the Pro or Customer Pricing Plan, and available to merchants on the Standard Plan as an add-on.
Step 2: Implement these tips from our Recharge experts
After implementing Recharge's AOV-driving features, it's time to delve into these curated tips from AOV specialists.
Tip #1: Offer payment plans
Offering a payment plan for higher-priced items or product bundles is a great way to incentivize your customers to choose the more expensive item. This not only expands your customer reach but allows your current customers to shop more freely. In fact, in one study, 30% of shoppers said a flexible payment plan meant the difference between making and forgoing a purchase.
Tip #2: Make customer service a top priority
Implementing live chat not only improves your customer experience, but according to Forrester, it can help you sell 10–15% more per cart. Although live chat is associated with an overhead cost, it’s always important to take your bottom line into consideration. Want to learn more? Check out our podcast episode on how to grow revenue with customer support featuring our Tech Partner, Gorgias.
Tip #3: Personalization is key—upsell and cross-sell your customers with dynamic content
Take your cross-selling and upselling to the next level by introducing personalized picks based on how much your customers spend. For those who spend less, cross-sell them with essential and complementary products. For those who spend more, upsell them to a more expensive version of a product, or invite them to a loyalty program.
“We typically see 10–15% of customers take advantage of a cross-sell opportunity, immediately boosting AOV.” –Electriq Marketing
Total net sales
Total net sales represent the total amount of sales revenue your company has earned from its products or services after accounting for any discounts, returns, or allowances. This is an important KPI because it acts as a clear measure of your company's revenue generation, and indicates the effectiveness of your sales and marketing efforts.
By tracking your total net sales along with other KPIs, such as MRR and AOV, you can gain holistic insights into the effectiveness of your campaigns and overall market share.
Step 1: Use Recharge features to help you increase total net sales
Increasing total net sales is an ongoing process that requires continuous monitoring and testing. That said, enhancing your customer experience, broadening your product reach, and offering discounts are all proven tactics to improve your net sales.
To help you implement these strategies, we recommend leveraging the following Recharge features and products.
RechargeSMS: Retaining existing customers is key to increasing MRR. Transactional SMS solutions, such as RechargeSMS, increase your LTV by allowing customers to manage their upcoming orders with a quick text, save time for your CX team, and integrate with your existing CX solutions.
One-time products & Upsell & cross-sell: Make it easy for your subscribers to try new products that align with their needs. Be sure to offer one-time products and target upgrade recommendations at the right time and place, such as within the checkout process or through a targeted email campaign.
Prepaid and gifting subscriptions: Enable new ways for your subscribers to shop, such as prepaid or subscription gifting opportunities, to help enhance your cash flow month-to-month.
Step 2: Implement these tips from our agency and tech partners
To further enhance your net sales, we gathered tips from our agency and tech partners. If you’ve already implemented the Recharge features and products mentioned earlier, these expert insights will provide you with actionable strategies to boost your net sales.
Tip #1: Analyze the biggest dropoffs on your website
To improve your sales, leverage data to gain insights into your customers’ purchasing behavior. For example, to understand customers’ reservations about making a purchase, analyze their website behavior and determine their biggest drop-offs.
An A/B testing program is a great way to experiment with different strategies to increase your website conversion. A good place to start? Look at optimizing your subscription flow, pricing, and messaging.
Tip #2: Invest in your unboxing experience
Increase your sales by thinking outside the box when it comes to your marketing strategy. One way to do this: Level up your unboxing experience. This won’t just encourage customers to share this “unboxing” across their social channels—it’s also likely the first real-world experience they have with your brand.
This is when they’ll decide what type of relationship they'll have with your brand, and by introducing an incredible unboxing experience, you’re turning your acquisition investment into a high-returning customer.
“Pro tip: If you choose to invest in unboxing, you can help protect your profit margins by offering alternatives to initial customer discounts, such as free shipping or double points events.” –LoyaltyLion
Tip #3: Introduce a product calculator
Introduce a product calculator that makes recommendations on subscription amount and frequency based on your customer’s expected consumption. This can be used to not only drive new subscriptions but also upsell your customers to increase your net sales.
Maximize your growth opportunities with our checklist
Leveraging revenue-generating strategies can have a significant impact on your business's success, especially considering the current rise in customer acquisition costs. Strategies like implementing live chat or introducing a product calculator can boost your sales and make a difference in customers' purchasing decisions.
Now that you have a taste of how to maximize your revenue, be sure to check out Recharge’s growth checklist to continue to establish lasting customer relationships and forge new ones.