White Label Communications Blog

White Label VoIP and Monthly Recurring Revenue

Posted by Chris Griffith on Fri, Nov 16, 2012 @ 09:26 AM

A wide variety of different business models exist throughout the world, but the basic goal of obtaining profit is typically consistent. One of the most cost-effective ways of doing this is obtaining recurring revenue.

White Label VoIPWhat is recurring revenue?

Recurring revenue is a situation in which a customer repeatedly pays money for the continued use of a product or service. One of the most common examples of this is a subscription plan, such as a monthly fee for access to an entertainment service. Within the recurring revenue plan, different products offer different results. For example, a magazine subscription requires the continued creation of new content, the collection of photos, editing, printing, and assorted other costs.  A White Label VoIP solution requires customer service and ensuring that everything is running smoothly.

Recurring revenue is more common for things used daily or at least very often, but is less workable in situations where products are sold to customers once or infrequently, so areas like manufacturing have less ability to create recurring revenue situations than businesses that offer ongoing services. Despite the similarities, recurring revenue should not be confused with payments over time for a particular product. A situation in which a set number is reached and payments stop is not a recurring revenue situation, regardless of how much money is involved or how long it will be paid for.

Advertising and Customers

One of the key points of recurring revenue is that customers will almost always be loyal over a long period of time, which can significantly reduce the amount of advertising necessary to retain customers. This can vary somewhat depending on which realm a business is in, but basic services like white label VoIP rarely need to do more than keep prices competitive in order to keep customers and may not need to spend very much time or effort on creating new products or making current products better. The end result of this is that in many situations, expenses will be minimal and will not increase significantly per-customer. If new customers are purchasing the product in question and becoming subscribers, this can easily become a situation in which each month is more profitable than the last. A steady increase in the level of income also allows for more money to be directed towards finding new customers, which further enhances the viability of the recurring revenue model.

Expenses

One major concern for any company looking to add recurring revenue is the expenses associated with the start of the project, followed by any expenditure that may be necessary to increase the capability of the network. Creating an entirely new network is a huge (and therefore expensive) endeavor, and proper maintenance must be able to physically access the entire network within a reasonable amount of time in order to fix problems. However, obtaining recurring revenue from a White Label VoIP solution allows for a business model where the network being run by another company (including technical support), while the fees for use are covered by the recurring revenue from customers. As more customers join in over time, any associated ongoing expenses will continue to be covered.

The biggest expenses are usually at the start of any recurring revenue business plan, but the reliable income will ultimately result in the entire business effectively paying for itself in short order, after which it becomes a steady and reliable source of income for the company managing it.

Competition

As it turns out, surprisingly little. While some markets are effectively saturated, White Label VoIP technology and associated elements have not yet hit the maximum expected market penetration, and some areas have been only minimally explored. What this means for businesses is that a new business has the chance to start in a local area and branch out, while currently-existing businesses that already have a number of loyal customers can increase their offerings over a wide area and further enhance the income they receive on a regular basis from consumers interested in the products that they provide. Even within White Label VoIP, the variety of different business plans and multitude of regions currently unserviced makes providing these services a winning plan in an uncertain time.

Topics: reseller program

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