MRR (Monthly Recurring Revenue) - Sales Glossary - Upnify
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MRR (Monthly Recurring Revenue)

Monthly Recurring Revenue (MRR) is a key metric used in service and subscription-based businesses to measure income generated predictably and regularly through the periodic billing of their customers. This metric is particularly important in companies that offer services or products under subscription models, such as Software as a Service (SaaS), content streaming services, software services, web hosting services, and more.

Key features of Monthly Recurring Revenue (MRR):

  1. Periodic Billing: MRR is based on recurring billing that occurs on a monthly (or other defined time period) basis when customers pay for their subscriptions or services regularly.
  2. Stability and Predictability: MRR provides a stable and predictable income stream for the company, facilitating financial planning and sustainable growth.
  3. Includes New and Existing Customers: MRR can come from both new customers subscribing and existing customers renewing their subscriptions or services.
  4. Excludes One-Time Revenues: MRR does not include non-recurring revenues, such as one-time sales or occasional income from additional services. It focuses on regular income generated by subscriptions.

Monthly Recurring Revenue is a critical metric for subscription-based businesses because it reflects the long-term financial health of the company. Companies often strive to increase their MRR through acquiring new customers, retaining existing customers, and expanding their services or subscriptions. In addition to MRR, related metrics like Churn Rate and Expansion MRR are also used to assess the growth and stability of recurring revenues.

The Sales Glossary is a compendium of all the most commonly used terminology in sales strategy. Many of the concepts listed here are used when implementing a CRM system or a digital sales funnel, no matter if they are legacy systems or an online CRM. See also our blog that deals with sales techniques, marketing and sales culture.