Economic uncertainty is a way of life for most small business owners. From small swings in the sales pendulum such as seasonal changes, to large swings brought on by recession, you can be sure that circumstances outside your control will try to wreak havoc on your business. However, thanks to recurring revenue, you can guard yourself so that when the pendulum swings, it doesn’t strike down your business in its path.
One of the best things about recurring revenue is that it provides predictability to balance the unpredictable. When you have clients signed up to purchase a certain amount of goods or services at regular intervals, you can provide a bit more cushion between your company’s bottom line and an economic downturn.
Better With Age
We’ve discussed before in previous blog posts that it is less expensive to make a repeat sale than to acquire a new customer, but the beautiful thing about repeat customers is that they tend to increase their interest in your business over time. In a study of over 18,000 E-commerce sites, Kissmetrics found that repeat customers spend more than twice as long on a site as first-time visitors, and viewed nearly 43% more pages per visit. More views, more curiosity, more services/products purchased, more revenue for your business. Win-win-win-win.
First-Time vs. Repeat Customer Website Behavior
This information isn’t just great from an immediate sales perspective, but repeat customer behavior on your site can also boost your SEO, lowering your new customer acquisition costs. Considering that repeat customers have a higher chance of telling others about your services, becoming free brand ambassadors, it’s easy to see how recurring revenue can keep your business profitable in any economic climate.
While recurring revenue doesn’t exclude the need for businesses to continue grow and acquire new customers, recurring customers can be a lifesaver during times when unpredictable pendulum swings slow down that process. Ready to add a recurring revenue stream to your business? Give us a call at 816-287-2010 or contact us here.