MRR Strategies?

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gregg petruzzi
gregg petruzzi Member Posts: 2 Navigator
First Comment First Anniversary
edited October 2021 in Strategy & Planning
Hello All,

I am in curious if any of your CSM organizations are focused on MRR as opposed to ARR. I ask because I have not been focused on MRR as my experience in all my roles has been based on renewals for a year or more at a time. That being said, I have been asked about employing strategies where customers are billed on a month to month basis and to think about strategies which would make that model predictable. This is a new approach for me as I have not done this before and welcome the larger community feedback on strategies which you have employed.

Thank you in advance for your time and feedback.
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  • Jeff Heckler
    Jeff Heckler Member, CS Leader Posts: 80 Expert
    Photogenic First Anniversary First Comment Office Hours Host 2022
    edited November 2021
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    Hi Gregg,


    Your CJMs (Customer Journey Maps) will be the first place to examine - after thorough customer interviews, and cohort consumption, usage, and adoption analysis.

    Additionally, my intuition would tell me that the focus on an MRR base from an ARR base would mean you are managing a much longer tail of customers.

    As such, CS Ops and enablement channels supported by digital methodologies would be an area of focus.

    Best regards,

    Jeff

  • Dickey Singh
    Dickey Singh Member Posts: 10 Contributor
    edited November 2021
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    This is a go-to-market strategy question.

    MRR makes sense when your product is easy to get started with and time-to-value is much smaller. MRR is perfect faster growing companies too.  Customers are willing to try monthly subscription products rather than committing to an annual contract.

    You have several customers (or users) at lower price points, and it is easier for them to sign-on, self-onboard, try the product and become activated users.  Self-off-boarding (like slack) can also be built in.  

    You product employs digital product adoption technology for both users and buyers.  You would also want more automated billing using credit cards and stripe, for instance.  

    You can have MRR and ARR together.  You offer a discount for annual subscriptions to larger customers.  We are also setup as monthly for smaller customers and annual for larger customers.

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