10 Ways to Increase Your SaaS Monthly Recurring Revenue [Grow Your Business]

how to increase your saas mrr

Is your monthly recurring revenue (MRR) plateauing? 

Your MRR is shaped by your SaaS marketing strategy & indicates your financial health.

If your MRR flatlines, not only will growth stall but you may also experience extremely low gross profit margins that can sink your business.  

In fact, 42% of SaaS companies experienced revenue declines in 2023, according to a Capchase study, which shows the dire extent of the struggle. 

If you’re to make your business profitable and successful, it’s important that you learn how to increase your SaaS MRR very quickly and sustainably. 

When you improve your MRR, you can increase overall revenue for your SaaS business. This can, in turn, enable you to expand your product line and scale into lucrative new markets that can further increase your bottom line.

In this article, we’ll discuss ways to increase your SaaS monthly revenue and therefore turbocharge growth for your business. 

Let’s get started.  

1. Use yearly payment plans 

Monthly contract plans can increase customer attrition. 

Compared to a yearly subscription plan where your customer is faced with a renewal decision once each year, they are now faced with twelve in the same period.

So if you exclusively offer a monthly payment model to your customers, you may be giving them more opportunities to back out of a purchase.

A YouGov survey discovered that only 3 in 10 consumers are fully in favor of monthly software subscriptions, which indicates that the majority of your customers may prefer a different payment model like an annual subscription option.  

Increase SaaS MRR - Use yearly payment plans

So what’s the secret on how to increase your SaaS MRR? 

Well, I recommend that you start by offering a yearly prepayment plan. To reduce user hesitation due to the huge initial upfront costs, you should also include generous discounts to help sweeten the deal for users.

There are other similarly powerful ways to generate more MRR for your SaaS such as leveraging SEO to grow your digital presence. So partner with us so that we can help you drive sales via strategic SEO.

Click here to book your free discovery call so we can learn more about your business and how we can assist you in raising revenue. 

Klipfolio, which is a business intelligence platform, changed its focus market and therefore required a new pricing strategy. 

They were able to increase their MRR by offering yearly payment plans for their customers and by also increasing their average starting subscription value, both of which contributed to this growth in revenue. 

2. Unbundle your features

Do you give everything away in one package? 

If you’re just starting your SaaS company, it’s extremely tempting to bundle all your features in one plan in order to provide more value to your customers and gain a competitive advantage. 

However, if you offer all your features in just one package, you’ll miss out on revenue that you could be getting from users paying for upgrades. 

OpenView established that 98% of SaaS companies who changed their pricing and revised their plan offerings realized a growth in revenue. This happened partly because they unbundled features to create higher-tier plans.

So simply splitting your features into separate pricing packages may just be what you need to do to finally crack how to increase your SaaS MRR. 

Increase SaaS MRR - Unbundle your features

First, you should have a plan that has only core features that your users will need to perform basic tasks to help them get acquainted with your software.

Then you can offer higher-tier plans, with more advanced functionalities that your users may need.

For instance, if you provide a PDF editing software, you can offer lower-tier users basic features like editing. You can then include more powerful features like digital signatures and redaction in a separate plan to incentivize upgrades.

Mention, which is a SaaS brand monitoring solution, wanted to increase their average revenue per account (ARPA) and raise revenue. 

They eventually increased ARPA by 296%, which translated to a big boost in their monthly recurring revenue. They achieved this by primarily splitting up their software features into two separate premium plans. 

3. Remove unlimited features 

Unlimited features instantly cap your revenue. 

They already set a ceiling on how much you can make with a feature, so they completely rule out the possibility of you earning more money with that functionality. 

Besides the initial bump in revenue from acquiring new customers, you’ll notice that your monthly recurring revenue flatlines if you offer unlimited features. 

In fact, only 13% of SaaS startups make $10 million in annual recurring revenue within a decade, according to a study by ChartMogul. Part of the reason for this is software underpricing stemming from companies providing unlimited features to users. 

If you want to figure out how to increase your SaaS MRR revenue, the first thing you need to do is to revise all your unlimited features. Instead, you want to set a limit and charge your customers extra if they exceed it. 

Increase SaaS MRR - Remove unlimited features

For instance, if you offer a generator tool for creating excellent SaaS names, you can charge for your services on a per-use basis rather than implementing an unlimited per-user model. 

With such a system in place, you’ll ensure that the more value customers get out of your platform, the more money they’ll have to pay you in return.  

WootRecruit was initially generating $43,000 a month in recurring revenue but they felt that there was a lot of room for improvement. 

Within six months, they attained an MRR of over $100,000. They achieved this by capping their features, optimizing their content marketing strategy, and revising their product offerings as well. 

4. Introduce software add-ons 

Not offering complementary solutions for your tool? 

A lead may turn to you for a document management software, but they may also require an electronic signature solution. If you don’t offer this, they may switch to a competitor that provides a more holistic tool.

Therefore, you’ll not only be leaving money on the table if you don’t provide complementary software products but also risk losing customers entirely. 

A study by BIA discovered that 61% of businesses generate their revenue from repeat customers rather than new ones, which shows that you have a great chance of making more money from your user base with add-ons. 

So in this guide on how to increase your SaaS MRR, I recommend finding opportunities to expand your product offering using software add-ons.

Increase SaaS MRR - Introduce software add-ons

You can provide an add-on for a complementary product which can help you reel in more income from your existing customers. For instance, if you offer a graphic design platform, you can create an image compressor add-on and charge extra for it.

Alternatively, an excellent SaaS marketing strategy you could try out is to offer your users extended features in exchange for referrals. This can help you bring in new sales for your SaaS business. 

ConvertKit, which provides email automation and monetization tools, was struggling to grow in a very competitive space.

In five years, they grew to $1.7 million MRR from a previous MRR of $5,000. They achieved this by expanding their product line with software add-ons, niching down on a specific market, and performing strategic promotions. 

5. Improve customer experiences

Customer experiences are at the heart of SaaS sales. 

If you don’t address customer concerns with regard to challenges that they may be facing with your software,  they may become dissatisfied and you could potentially lose these renewals. 

Worse yet, if they go on to leave negative feedback on third-party review websites, this can also hinder your ability to acquire new customers. 

A survey by PowerReviews discovered that 99% of people read online reviews when they’re looking to buy products online, which goes to show just why it’s very important that you ensure stellar customer experiences.

But what’s the best way to improve customer experiences? 

Increase SaaS MRR - Improve customer experiences

Well, if you’re unable to provide timely customer support, I recommend that you outsource to a dedicated third-party service that helps you out with this while you take care of running your day-to-day. 

If you’re up to the task, you can choose to write killer case studies and surveys, which can help you gather feedback directly from your customers about how they’re finding your software.

With this information, it becomes easier for you to spot and fix bugs and also make improvements that can improve customer loyalty and encourage new referrals. 

Agicap, an automated cash management platform, was finding it difficult to grow their revenue, partly due to highly ineffective customer support strategies. 

They eventually increased MRR by 600% within one year by turning to a customer management platform. This enabled them to collect the feedback they needed to make product improvements and enhance customer experiences.

6. Leverage content marketing 

What strategies do you use to generate sales? 

If content marketing is not one of them, you may find it very challenging to build brand authority, keep your audience engaged and grow relationships with your customers.

Moreover, with your SaaS blog presenting a lead generation goldmine, you may be losing opportunities to grow your MRR if you don’t utilize content marketing.

In fact, SaaS businesses that blog experience 126% higher lead growth compared to their non-blogging counterparts, according to a survey by HubSpot. So if you want to generate more leads and therefore sales, you need to blog more often.

Increase SaaS MRR - Leverage content marketing

Fortunately, you’re spoilt for choice when it comes to SaaS content marketing tactics. You can write product round-up posts and original research articles, for instance, which can help you attract and convert leads into paying customers for your SaaS.

While content marketing delivers great ROI, you may find that it’s very time-consuming and requires a data-driven approach to be successful. So you may need a growth partner like Boterns to lend you a hand. 

Click here to book your free discovery call so we can discuss your growth challenges and help you put together an excellent content marketing strategy.

FileCenter, a document management platform, had a very low conversion rate from its organic search traffic and their MRR had therefore plateaued.

However, we helped them drive $10,200 in license sales within three months, while also increasing their MRR from organic search traffic alone by 15%. We achieved this through meticulous content marketing. 

7. Create a pricing strategy 

A poor pricing strategy may be shackling your MRR. 

You can put a lot of effort into choosing a great SaaS name, building brand awareness and marketing, but all that can easily be undone with pricing mistakes.

When you charge too high or too low for your SaaS software, you risk scaring away potential customers and undermining your profit margins.

Paddle discovered that 94% of pricing leaders update their SaaS pricing at least once annually in response to fluctuating market conditions. This has helped them keep their profit margins healthy, so you should borrow a leaf from their book. 

Want to nail your SaaS pricing strategy? 

This guide on how to increase your SaaS MRR has you covered. 

Increase SaaS MRR - Create a pricing strategy

Your price should generally reflect the value that your users will get from your software and cover the costs that you incurred to develop, maintain, and market your product.

Additionally, I advise against flat-rate pricing and instead recommend that you offer usage-based pricing. This way, the more customers use your software, the more revenue you stand to generate. 

You should also take a look at your competitors’ pricing models, which can help you find success in a highly competitive market.

Zappier, which is an online productivity tool, decided to provide a usage-based pricing model for some of its higher-tier plans. 

By the end of 2022, they raised annual recurring revenue to $140 million, and they did this by charging customers per task completed with the software, and implementing overage fees when task limits were exceeded.

8. Upsell your customers

Do you have an upselling strategy? 

You may focus on drawing in prospects using powerful SaaS lead magnets, but you could miss out on revenue that’s right in front of you from existing customers.

With your users unlikely to upgrade to a higher tier plan on their own, failing to nudge them in this direction can cause you to lose sales. 

Pacific Crest revealed that up to 32% of new annual contract value for top SaaS companies comes from upselling their existing customers. This means that you cannot afford not having an upselling strategy if you want to grow quickly.

With upselling involving you leveraging your existing client base, I find that it’s one of the best tips on how to increase your SaaS MRR effortlessly. 

Increase SaaS MRR - Upsell your customers

In terms of tactics, I recommend that you give customers time-limited access to higher-tier plans. This will give them a feel of what they’re missing out on and it may motivate them to level up their subscription. 

You can also increase your upselling success by incentivizing upgrades with bonus offers. For instance, you can provide an additional add-on that they would normally pay for for free, which may further convince them to upgrade.

Sales Transformation Group, which offers a variety of sales management solutions, wanted to scale very quickly into new markets.

By revising the sales strategies, they improved MRR by 500% in one year. They achieved this partly because they also shifted focus from majorly concentrating on new customer acquisition to upselling their existing subscriber base. 

9. Offer free software trials

The lack of a free trial may also be your undoing.

While you can achieve a lot by increasing product demo bookings, this alone may not be enough because some prospects are not usually as receptive to demos as they are to free trial offers.  

Without free trials that allow your leads to try out your software in a risk-free way and on their own terms, you may also experience stunted customer acquisition. 

Totango discovered that over 25% of the revenue of top SaaS companies comes directly from free trials. This means that you can raise your monthly recurring revenue by one quarter with such offers. 

A free trial is the equivalent of test-driving a car, and it can help your leads feel more confident about choosing your SaaS tool. 

Increase SaaS MRR - Offer free software trials

Want to create high-converting SaaS free trials? 

If you’d like to crack how to increase your SaaS MRR using free trials, I recommend implementing trials that don’t require a credit card because this can encourage more sign-ups for your software. 

You should also set up an email drip campaign, which can help you nurture free trial leads and hold their hand to the very end so that they don’t fall off your sales funnel.

AI Carousel, a web-based carousel maker & generator, wanted to reach $2,500 MMR within one year of starting their business. 

However, they surpassed that goal and attained $3,333 MRR within just three months of launch. This accelerated success largely stemmed from the fact that they used freemium offers to turbocharge their conversions. 

10. Implement dunning systems

How does your SaaS platform handle payment failures? 

Your customers may have every intention of continuing with your solution. However, they may face problems with their credit cards and other payment options that can result in failed payments

If your software automatically cancels a subscription upon noticing a failed payment, you may lose loyal customers to involuntary churn. 

In fact, up to 53% of SaaS churn is passive or accidental, according to a study by Brightback. These involuntary churns occurred due to payment issues arising from problems with credit cards & other payment options, which shows the need to follow up. 

This is why I believe implementing a dunning management system is a very critical part of this guide on how to increase your SaaS MRR. 

Increase SaaS MRR - Implement dunning systems

To prevent payment failures in the first place, you should craft credit card expiration email sequences that can help your customers fix any potential payment problems before the renewal date.

You should also monitor past-due accounts and send reminders to prevent customers from slipping through the cracks.

Moreover, I recommend implementing proven SaaS blog post ideas that can help keep loyal customers engaged and active.

Barn2, which provides WooCommerce plugins, had a 4% churn rate but it desired to do even better within the same financial year.

So they implemented a dunning strategy and saved $5,000 in one year that they would have lost to customer attrition resulting from involuntary churn. With this strategy, they eventually reduced their churn rate to 1.7%. 

Conclusion 

You may need funding to grow your SaaS business. 

However, investors tend to scrutinize your monthly recurring revenue to determine if you’re worth the risk. 

If your MRR is very low and therefore unappealing to investors, you may really struggle to raise capital and grow your SaaS business.

McKinsey established that 80% of businesses struggle with growth, and therefore eventually fail within the first five years. A massive contributor to this situation is cash flow problems. 

This is why you need to learn how to increase your SaaS MRR so that you can secure more funding. If you require a growth partner to help you increase your MRR, Boterns is at your service.

Click here to book your free discovery call so we can discuss your brand’s needs.

During this call, we’ll learn more about your software and brainstorm excellent SaaS marketing solutions that can help you break out of your growth plateau. 

About the Author

David Kostya

David Kostya is a seasoned growth hacker specializing in SaaS SEO at Boterns. With a proven track record of elevating online presence and driving significant user growth for software startups, David's innovative strategies and insights make him an invaluable asset to SaaS SEO marketing. Join him on a journey to unlock the full potential of your SaaS platform.

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