To fit a wide range of companies, Upsales can be tailored to different sales models, such as monthly (MRR) or annual recurring revenue (ARR), Contribution margin (CM), or actual order value.
This article covers:
- How to activate or change a sales model
- Actual order value model
- Contribution margin model
- Recurring revenue model
How to activate or change a sales model
- You need Administrator status
- Click Settings → Account → Account settings:
- Under Sales model, select Actual order value, Contribution margin (CM) or Recurring revenue, then click Activate sales model:
Actual order value model
For most companies, this sales model is sufficient, so it's also the default. The sales figures shown in Upsales will be the product's sum and prices.
Contribution margin model (CM)
The Contribution margin model (CM) shows you how much profit you're earning per product or order. The calculation is:
Selling price - Purchase cost = Contribution margin
When this model is activated, a Cost tab is added to your products. The cost you set there is the default, and you can change it in your orders and opportunities. With this model you can:
- Configure whether to display CM value or actual order value across Upsales
- Set purchase price for your products
- Set sales targets based on contribution margin rather than just order value
Combining CM with recurring revenue
If your account has the Subscriptions product, you can use the Contribution margin as your main sales model, and use ARR/MRR. Turn on Combine with the annual recurring revenue (ARR) sales model. or Combine with the monthly recurring revenue (MRR) sales model. For example, you can add a purchase price, selling price, and recurring ARR/MRR price for your products.
Use case: If you're outsourcing a monthly resource, analyse the return on the monthly resource separately to the costs of retaining the resource
Upsales then gives you:
Product choices:
- Cost of purchase
- Selling price
- Product type: One-off
- Product type: Subscription
- Ability to set order frequency (for example every 6, 12, 24 months)
Reporting:
- Contribution margin reports (in the Report centre)
- Recurring revenue reports (in the Report centre)
Targets:
- Set targets for Subscriptions, One-offs and CM
Sales pipeline & order management:
- Display CM/ARR/MRR values inside opportunities
- View opportunities in sales board based on ARR/MRR, one-offs, Total order value and CM
Recurring revenue model (ARR/MRR)
This model is used by businesses offering subscription-based products. It requires the Subscriptions product. Use it to:
- Display ARR/MRR values for your opportunities, orders and reports
- Set up one-off and subscription-type products
- Add a default length for your subscription products
- Set targets for both one-off and subscription products for your teams
- Define how to calculate your recurring revenue (option to include lost customers and contraction)
Combined ARR/MRR with CM
You can combine the Recurring revenue model (ARR/MRR) with CM to measure sales on both ARR/MRR and CM within Upsales. Turn on Combine with the contribution margin (CM) sales model.
Use case: If you're outsourcing a monthly resource, analyse the return on the monthly resource separately to the costs of retaining the resource
Choosing the option to combine ARR with CM lets you get more granular with:
- Products: Add costs to your products
-
Sales & Pipeline:
- See both ARR/MRR and CM value as well as edit costs for order rows in Opportunities, Orders, Subscriptions
- See opportunities in sales board based on ARR/MRR, One-offs, Total order value and CM
- Company list: Access data on sales and sales growth for both CM and ARR/MRR values
- Report centre: Follow up on both Recurring Revenue and Contribution margin KPIs
- Targets: Set targets for Subscriptions, One-offs and CM