What is MRR (Monthly Recurring Revenue)?
Formula: Number of Customers × Average Revenue Per User
Predictable revenue generated by subscriptions monthly. Key metric for subscription businesses. Used to track business growth. Companies monitor MRR as a primary health metric.
MRR growth depends on new customer acquisition, expansion revenue, churn rate, and pricing strategies. Track upgrade/downgrade patterns, trial conversions, and customer retention metrics to understand MRR dynamics.
Reduce MRR churn through proactive customer success programs, early warning systems, and engagement monitoring. Address customer needs quickly, optimize onboarding, and maintain strong product value proposition.
MRR impacts cash flow through predictable revenue streams, billing cycles, and collection patterns. Understanding this relationship helps with financial planning, resource allocation, and growth investments.
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