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What is Monthly Recurring Revenue

Recurring revenue (RR), recurring monthly revenue (RMR), or monthly recurring revenue (MRR) is the idea that there is some known, fixed, revenue an integrator can expect to earn with certainty from the same customer, each and every month, for multiple years into the future. MRR is one of the most ideal and sought-after types of recurring revenue in technology solution sales.

Why Do System Integrators Want MRR?

 

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1. Known Revenue

With MRR you start every month and year with known revenue. This provides financial strength to weather the notoriously unpredictable nature of project sales which can evaporate completely in economic downturns. 

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2. Higher Margins

Service sales that generate monthly recurring revenue have much higher margins than one-time project sales.

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3. Sell Less Make More

You do not need as many wins to generate the same level of revenue or margin as one-time project sales.

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4. Business Valuation

Your business is worth more. If you try to sell your business, buyers will pay as much as 10x more for recurring revenue than they will for revenue from one-time project sales.

 

Why Do Integrators Hesitate to Sell MRR?

Unfortunately, many integrators express hesitation about attempting to make recurring revenue sales, like a technology-as-a-service solution sale, because they falsely believe . . .

  • They will have to wait to receive all of the revenue for the system portion of the sale.
  • They will have to internalize all of their cost to suppliers and distributors.
  • It will take too long to build meaningful immediate revenue results.

All of these concerns can be avoided when partnered with the right as-a-service financing partner.

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MRR Basics

Watch the following three short videos to learn more about what monthly recurring revenue is, why it is so important for system integrator leaders, and how exactly MRR works with the right financing partner.

Selling Services to Build MRR

To build recurring revenue with a technology system or hardware solution sale you must sell multiyear maintenance, support, and service contracts bundled in at the point of sale. These, traditionally, high margin sales, create predictable and sustainable monthly recurring revenue integrators can depend on for multiple years.

However, a multiyear support service contract sale is one of, if not, the hardest sales in the industry. It's not conducive to a one-time transactional sale. However, when proposed as a monthly technology-as-a-service payment, you alter the entire dynamic of the sale. It becomes an easily digestible way to pay for the use and access of the hardware and support services.

Quantifying the Value of MRR

Learn in more detail the value monthly recurring revenue brings to a technology system integrator business. These videos unpack the numbers and show examples of how building recurring revenue sales creates larger margins, more profitability, and increases your business valuation.

The system integrator's playbook call to action button to download a guide on how to make the pivot to a service sales model & build monthly recurring revenue

3 Ways TAMCO Helps Integrators Build Recurring Revenue

TAMCO has nearly 30 years in the technology hardware industry helping integrator partners make the pivot to selling more services and building recurring revenue. There are three main ways a TAMCO partnership contributes to building sustainable and predictable monthly recurring revenue for your business.

3 Ways TAMCO Helps Integrators Build Recurring Revenue

TAMCO has nearly 30 years in the technology hardware industry helping integrator partners make the pivot to selling more services and building recurring revenue. There are three main ways a TAMCO partnership contributes to building sustainable and predictable monthly recurring revenue for your business.

 

1. More Maintenance & Support 

Most technology solution sales include the first year of maintenance and support. Then, the solution provider tries to go back to the customer in month 13 to offer more. This is rarely successful and if the customer does want support, there is no guarantee you will be the provider.

Working with TAMCO remedies this problem. When you propose TAMCO's technology or hardware as-a-service solution, you can bundle in the monthly support services with our pass-through maintenance option. Bundling support right into a monthly payment option makes the entire sale more palatable for the customer and easier for you to sell.

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FUN FACT: Partners who position and recommend a TAMCO payment option during the proposal gain a five-year support commitment with their initial solution sales on 60-70 percent of transactions.

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2. Greater Customer Loyalty

TAMCO helps solution providers contractually guarantee customers return to you for future technology solution sales. One of the benefits to a customer using a TAMCO Shield, technology equipment-as-a-service monthly payment, they must come back to the original solution sales integrator to utilize its full benefits, such as; upgrade, migrate, or look at new solutions.

This is not the typical MRR you think of when trying to gain your recurring revenue streams, but it is revenue that has longevity and you can be sure will not be lost to competitors.

 

3. Longer-Term Customer Relationships

A convenient, value-added monthly payment option, peace of mind from technology obsolescence, protection from natural disasters, control over their solutions, flexibility to make good business decisions on technology. All of these are positive attributes you are able to provide your customer when working with TAMCO, offering our exclusive as-a-service program. While there are competitors who try, we have yet to find anyone who can offer this same value. Providing this type of care and differentiation to customers will result in you building highly satisfied fans. So much so, you may find your customers coming back to you for similar payment options on their other technology needs (security, surveillance, AV solutions, video, voice, data, IoT, etc…). And TAMCO will gladly work with you to pursue any technology equipment needs.

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Download the Full Ebook:

3 Ways TAMCO's Partner Program Will Create Recurring Revenue

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Contact Us Today 

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We partner with solution providers selling all types of technology equipment; security, AV, voice, video, data, IoT, digital signage and more. Let's discuss if TAMCO is a good fit for your company and talk details about building recurring revenue for your organization. 

Call us today: 888.350.1842

Give Customers Technology They Demand While You Build Recurring Revenue

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Ebook: How TAMCO's Partner Program Build You Recurring Revenue