The Significance of Avoiding Losses in Monthly Recurring Revenue
Hey there I'm Eric Olsen and I'm Kevin days. Join us on our journey to building in your one hundred million dollars company what's happening. It's airtight Olsen here. We keep some pretty detailed. K._P._I.'s here K._p._I.'s for key performance indicators. We just started doing this probably about a year ago and over the course of the year we have refined them in refined them to give them to the point where they're actually meaningful to us in the first quarter of two thousand nineteen we had a K._p._i.. That was change in 'em are are. You're so what that actual K._p._i.. Met was how did our M. R. R. Month recurring revenue increase and decrease over time now we had a goal that you would increase by fifteen thousand dollars over the course of the first quarter. We didn't ask you start tracking that until March twelfth. which was the first time that we actually have a number for that before then we hadn't thought of this K._p._i.? We. Into quarter up about eight thousand dollars it was great for the second quarter which is April May and June of two thousand nineteen. We got a little more sophisticated kid on that K._p._i.. And we split up into two we have new 'em or are so this is new work that we've won and we also also have lost am are this is work that we already one and we're performing and we lost it for one reason or another now. We could have lost it for many reasons. The client could have fired us. We could have fired the client. The client could have gone on a business. That's actually happened to us before. There's there's lots of reasons while we could lose. 'EM are but what we found. Is that in the second quarter we were shocked at how much em or are are. We actually lost now. We gained twenty five thousand dollars in new monthly recurring revenue in the second quarter but we lost twenty one thousand dollars of monthly recurring revenue in the same type time period. Food so we gained twenty five. We lost twenty one for a difference of only four thousand dollars. Now we lost twenty one thousand dollars of monthly recurring revenue. That's about two hundred and fifty thousand dollars a year a quarter of a million dollars in revenue that is just poof gone. We don't have it anymore. We had it. We were working at and it's gone every time we you lose a client and we lose monthly recurring revenue every single time. I call a meeting with the management team and we dissect and deconstruct looked exactly what happened. I WANNA find out why who said what when where why and how and we write all that up in a lessons learned document and if there is something that we did which is usually the case we did something or we didn't do something or we weren't very good assault than we documented humanit and we figure out how we're going to avoid that from ever happening again other times. There are things that are out of our control kind of like. The time where the business actually went out of business because they had taken too much auto loans. We were doing a fine job for them. It just didn't work out overall but when they're something something that we can learn we documented and then we change process. I do not want to go into the third or the fourth quarter or ever again and lose that much revenue a quarter million dollars of revenue in one quarter does not good where at the very beginning of the third quarter on record in this this on July fourth. Yes Independence Day. I'm in here because there's no one else in here and the goal is only ten thousand dollars of of lost for the third quarter so we've got three months to go. I'm going to be pushing really hard to keep all these clients because sales is bringing bringing new work and we gotta make sure that we don't lose that work. Thank you for listening. Is it time for new website. If so we'd I love to help you out. Check out our website services at this array dot com.