What is MRR?
The simple answer is that MRR is your Monthly Recurring Revenue and one of the key metrics that SaaS companies use to evaluate success.
BUT LET’S GO DEEPER
MRR is a way to normalize varying packages and terms.
MRR also directly correlates to dollars versus other metrics like users, accounts, or other ambiguous indicators.
Why does revenue need “normalized”?
You probably have multiple package levels or even custom packages.
Accounts may renew annually and monthly.
Accounts may renew on different dates or be prorated.
Accounts are lost – churn; and accounts are won – sales.
You may have upgrades and downgrades at different times.
MRR is frequently used in a number of critical subscription performance reports: Momentum, Customer Lifetime Value (uses MRR in the CLV computations) and MRR Cohort.
Some MRR formula examples.
GROSS MRR CHURN RATE
Total MRR At Start Of Month
3% ( .029 )
Gross MRR Churn
GROSS MRR GAIN
1,200 ) /
Gross MRR Gain
OK, NOW WHAT
Your goal is to reduce volatility of these numbers and ensure their trajectory.
MRR Volatility ( big gains and losses month to month )
can indicate unpredictable marketing, incorrect package terms, high churn and other underlying issues.
SaaS Founder Interview: Lindsay Tjepkema
Lindsay Tjepkema is Co-Founder & CEO of Casted, the first podcast solution for B2B marketers.
SaaS Founder Interview: Jessica Willis @ Pocketnest
Jessica Willis is Founder & CEO of Pocketnest, a venture-backed B2B2C SaaS platform that helps users achieve financial wellness, while strengthening their relationship with their financial institution.
SaaS Founder Interview: Matt McCarrick @ SkillSetz
Matt McCarrick is the CEO & founder of SkillSetz. SkillSetz offers businesses of all sizes a one-stop shopping experience for all of their Project-based Services needs.
Who's in Charge of Retention?
Retention plays an important role in the success of any company. It’s key to assign the responsibility to someone.
User Retention: Don't Wait Until They're Gone
Churn is a silent killer of the modern-day SaaS business. So, to avoid the loss of customers, we’ve come up with a useful list of customer retention strategies to consider.
Customer Feedback: Why You Need It
Customer feedback is a powerful guide that provides you with critical insights, and acting on it will take your business to a whole new level. Read all about the ins and outs of this valuable tool.
SaaS Website Design Consistency for Conversion
Our goal is to increase conversions into demos, trials, and purchases as well as downloads, webinars, and follows.Often a huge design mistake is not developing a consistent and predicatble experience that makes it significantly easier for visitors to traverse a site and know when to take actions.To get started, watch episode #8 of our SaaS
SaaS website scrolling to improve time on site and conversion
People are now more likely to scroll than click to another page — the influence of mobile browsing and social media sites has influenced all online behavior.
SaaS Screenshots & Product Tours for Conversion
Prospects want to be able see and feel a product before buying it and software is no different.For software, our goal should be to provide an experience that allows visitors to virtually touch and try on our product before they convert.
SOFTWARE + TECHNOLOGY MARKETING E-BOOK