Make MRR Your Insurance Policy for the Next Recession
Business was tough from 2008 to 2010. More than 17,000 companies went out of business during this time. But how did a legacy Midwest communications company persevere during the downturn?
Midland Communications opened more than 50 years ago in Davenport, Iowa – first selling Victor-Animagraph Projectors, before adopting the interconnect model in 1978. There are a lot of things special about Midland, including the story of when they interviewed Walt Disney for a job.
Photo courtesy: Midland Communications
What is most remarkable is Midland's endurance. Their livelihood relies on a healthy economy and their clients have to be successful in order to make purchases – like business communications. So what is the secret to their success? It happens to be the same thing so many businesses are striving for today – Monthly Recurring Revenue or MRR.
The transition to an MRR model goes back about 10 years, when Midland first partnered with GreatAmerica. Initially, Midland was looking for a way to provide equipment to customers who didn’t want to pay cash. Midland quickly realized the benefits of financing including being able to differentiate themselves from their competitors. When Midland fully evolved to packaging service and equipment into a rental, they became an MRR machine.
The bundled rental swiftly became the primary way Midland sold both equipment and services – offering their customers a single payment for their communications solution. It wasn’t just the MRR that Midland was enjoying. They gradually increased margins, which have grown more than 28 percent. They also cut in half the time it took to get their customers into new, more reliable equipment, a direct result of the bundled rental offer.
Midland CEO, Jason Smith credits their established stream of recurring revenue with the GreatAmerica rental program for helping them survive and thrive during the economic downturn. Don’t underestimate the power of financing as an insurance policy against the next recession. Read more about the Midland story by downloading the full case study below, and let us know if you have questions.
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