Stop Selling RMR
Posted on Thu, Oct 07, 2010 @ 08:13 AM
A crazy statement from a SaaS company, huh? Here is why service providers should not focus on RMR.
Recently I received a proposal from a SaaS provider wherein the fee for the monthly service was described as… Recurring Monthly Revenue. Maybe I’m being an overly sensitive consumer, but I find this to be an absurd inversion of focus. I want my service provider to be focused on my needs, not their type of revenue stream.
How would you feel ordering fast food by saying, “I’d like one of your 80% margins and two 20% margins please. That’s how I felt signing a proposal that listed my service as RMR.
I humbly propose that we stop talking about RMR and flip the focus to where it should be: on the buyers. Customers are not shopping for Recurring Monthly Revenue; they’re acquiring a recurring service relationship. They’re getting capabilities they need and paying on a periodic basis. Service providers are not selling RMR, they’re selling a vendor-vested service relationship. Customers derive benefits from on-going service relationships that have distinct value over transactional relationships. Among the benefits are 1) committed service providers, 2) service costs that are pre-defined and stabilized, 3) Access to services they could not afford to build on their own
So let’s try out a few new terms like Recurring Service Relationship (RSR) or Continuous Service Program (CSP), something other than teaching our salespeople to sell customers Recurring Monthly Revenue.
- John Szczygiel