Monthly Recurring Revenue

What is Monthly Recurring Revenue (MRR)?

It is the measure of a business’s predictable revenue earned every month.

Why is MRR important?

To forecast finances.

MRR is essentially a stable metric thanks to subscription models, making financial projections more accurate.

To measure growth.

A month-on-month increase of your MRR is a clear indicator of a thriving business.

A declining MRR is a direct signal for employing better strategies.

How to calculate MRR?

Types of MRR

New MRR ⁠— the MRR given by new customers.

Add-on MRR ⁠— the MRR given by existing customers, by buying additional features.

Churn MRR — MRR lost from cancellations and downgrades.

Tips to increase MRR

Have your sales team close more qualified leads.

Have variable pricing schemes and charge users based on their engagement levels.

Have seasonal offers that can interest more users into buying your product.

Consider decreasing your burn rate.