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Use These Flexible Financing Strategies to Increase ARR

November 3, 2022
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Annual recurring revenue, or ARR, is a subscription-based metric that reflects the total amount of revenue a company can expect to receive on a yearly basis. Growing and tracking ARR is crucial for all SaaS companies as it gives a high-level view of how your business is doing and the rate at which you need to grow for continued success.

Flexible financing that is available for tech companies offers startups time to strategize on how to grow revenue, and Gynger has the tools to turn those strategies into reality.

Ways to Increase ARR Growth with Flexible Financing

If you're looking for ways to increase your company's annual recurring revenue growth, offering flexible financing options to your software buyers can be a great way to shorten the sales cycle and close more deals.

According to a survey by G2 Research, 55 percent of buyers need less than three months to make a decision on a software purchase of $20,000 or more. By offering flexible financing options, you can help your buyers close the deal even more quickly.

Flexible financing refers to the ability of your customer to pay for their subscription over a period of time that works for them while providing the money you need to provide the services upfront. Sales reps encourage potential customers to partner with Gynger for their financing, Gynger pays for the subscription upfront and handles the ins and outs of the loan.

Here are some ways that flexible financing can help with ARR growth.

1. Increase Customer Base

The long-term success of a SaaS business depends on many things, including the ability to attract and maintain a diverse customer base. This protects against the risks that come with having too few customers accounting for an outsized portion of your sales.

Through the use of Gynger's sales acceleration tool, we give you the ability to offer your customers flexible monthly payment terms while being paid upfront for the sale, enabling your team to reach out to a wider range of customers.

2. Reduce Churn By Offering Solutions

While getting customers in the door is crucial to your company, retaining them is equally crucial to the long-term success of your business. As noted, most companies only need about three months to determine whether to purchase a product. You can reduce churn by ensuring customers can sign up for a full year, providing them with the ability to use your product longer in order to utilize its full value. 

3. Develop New Pricing

Flexible financing gives you the ability to develop new pricing strategies that can help increase your company's ARR. If you're selling a product for a subscription price of $100 a month, having the ability to offer a financing plan that allows the customer to pay for the product over 12 months at a price of $10 a month will likely increase your customer base and help you close more deals.

You can further your efforts by extending meaningful financing offers with set expiration dates to provide a sense of urgency. If a customer understands that they can get a year's worth of service for $10 a month through flexible financing rather than paying $100 for the service if they sign up by a certain date, your sales team will be better positioned to close more deals.

4. Offer Financing Instead of Discounts

You don't need to train your customers to expect discounts or price reductions. Instead, offer flexibility in payment terms to circumvent pricing objections.

Gynger's flexible financing tool gives buyers the ability to finance software spend and pay for their subscription over a period of time that works for them.

Through Gynger's flexible financing tool, you receive full payment for the subscription upfront, which makes it money you can count on, and better yet: money you can use. Instead of holding off budgetary items until you've received payments, you can prepare your budget with ease due to the increased cash flow.

5. Initiate Orders Faster

Gone are the days when a SaaS business was built on the notion of landing a few really big corporate clients. Instead, the industry is leaning heavily toward product-led growth and landing smaller -- and faster -- sales. By harnessing a culture of data-driven experimentation, user feedback, and laying the proper groundwork for lasting relationships between the customer and company, your team is able to initiate orders faster and reach the desirable ARR needed for continued financing.

6. Offer a Better Financing Solution

Offering financing via a partner like Gynger can help you close deals quickly by cutting through the red tape that is often associated with traditional methods of obtaining financing (like banks and other debt providers). By directly offering financing through a partner, you’re able to provide your customers with a simple and effective way to finance their subscription without having to go through the lengthy and complicated process of talking to a traditional lender.

7. Boost Flexibility

Giving your customers financing options provides them with the flexibility that they need to choose an option that best fits their unique business. Gynger provides several financing options, customized to fit the needs of your customers so they can get the most out of the products and services you provide without breaking the bank.

8. Increase Productivity

When you offer flexible financing, you're not only increasing your company's ARR but also boosting the productivity of your sales team. By automating the process of offering financing to customers, your salespeople are able to focus on other aspects of the business, such as increasing close rates and building relationships with customers.

9. Improve Customer Support

On average, the churn rate of a SaaS firm is around 6-10 percent, and around 42 percent of SaaS customers state that the quality of customer support they receive is the main reason they decide to stop using a SaaS application. Gynger’s software financing tool helps you reduce overhead by enabling you to offload billing and account receivable, because we handle the financing and collections while you receive payment for the product upfront. We underwrite, approve, and issue loans directly with your account, which allows your sales team to focus on selling the product and supporting the customers.

10. Growth Strategy

Due to the double-digit annual increase the SaaS market in recent years, as well as the increase in competition for customers, successful SaaS businesses are those that harness the increased demand by using our sales tool to provide a sense of predictability that better informs their growth strategy.

11. Create Predictable Revenue

As software vendors already know, the volatility that comes with each sale and the numerous variables of each contract can make it difficult to accurately forecast revenue. By using Gynger, you are eliminating the risk of customers defaulting on payments and getting paid upfront on every deal, removing the uncertainties.

12. Resource Allocation

Using our software financing tool provides you with the full amount of the customer's subscription upfront. This means there is capital available to be allocated to your sales reps when they need it.

13. Increase Net Retention

Increasing ARR is not merely about bringing in new customers. Upselling and cross-selling within the company's existing client base is also important. The key to retaining customer subscriptions is to continue offering an array of services to meet the needs of a number of businesses. This means growing and expanding the accounts they have available. Flexible financing provides a powerful incentive for existing customers to make larger purchases.

14. Defer or Reduce Payments

One of the many selling points you can provide when offering flexible financing to your customers is the ability to defer or reduce payments as needed. However, without Gynger, this means that someone on your team will be spending time billing monthly payments or even pursuing collections if they don't pay. With Gynger, you can leave the lending to us.

15. Ease and Speed Up the Budget Process

Flexible financing can help simplify and expedite the budget process for your leads. By providing buyers with a way to finance their subscription over a period of time that works for them, you make it more likely that they'll be able to stay subscribed to your product for the long term. In that way, it is a great sales acceleration tool.

Flexible Financing is a Powerful Tool to Boosting ARR

When it comes to increasing ARR, flexible financing is a powerful tool that can help you close more deals and increase growth. By offering customers the ability to defer or reduce payments, you can increase sales and generate cash flow to grow your business. With Gynger, you can streamline the process by leaving the lending to us so you can focus on selling and continually growing your ARR. Sign up today to learn how Gynger can boost your ARR.

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