It helps you estimate your expected monthly profit. Leading SaaS companies use this metric for the following purposes:
Making a financial forecast and plan. Due to the fact that the monthly regular income is relatively constant, it is much easier to assess the development prospects and financial position of the project. Forecasting becomes more accurate and justified.
Growth assessment. It does not matter whether the project uses its own resources or depends on investors' investments. For SaaS companies, MRR is the most important indicator of financial growth or stagnation.
Read also!
"Examples of Marketing Strategies: From Apple to Barack Obama"
Read more
Processes that can be managed with MRR
Attracting new customers
MRR can help you understand chinese malaysia phone number list how effective your marketing campaign is and whether it brings in new customers. To increase interest in the product, many projects start with a free trial period.
Building long-term partnerships with clients
MRR helps to understand whether users remain partners of the company for a long time or refuse cooperation. On this basis, it is possible to develop measures aimed at retaining customers.
Income planning
MRR allows you to calculate profit for a certain period relatively accurately. This greatly simplifies the planning of short-term and medium-term business strategy.
Formation of strategy
Source: shutterstock.com
Controlling customer churn
If MRR has started to fall, this indicates the need to take a closer look at the deal making process, analyze the sales funnel, and find out the reason why potential clients are refusing to cooperate.
Development of product range
MRR makes it easy to identify the most profitable products and use this information to adjust your sales strategy.
Rapid response to changing market conditions
Monitoring the dynamics of MRR allows you to notice changes in the commercial situation in a timely manner and respond to them appropriately.
Note that in its pure form, this metric will not provide a comprehensive picture. It is only one of the indicators that allow you to determine the profitability of the project. However, its advantage is that it allows you to identify gaps in activities aimed at retaining customers, and make adjustments based on changes in their needs.
Download a free selection of tools for calculating KPIs and increasing marketing metrics
Alexander Kuleshov
Alexander Kuleshov
General Director of Sales Generator LLC
Read more posts on my personal blog:
Over the past 7 years, we have conducted over 23,000 comprehensive website audits and I have learned that all of us as leaders need clear and working algorithms for our marketing and sales.
Today we will share with you 6 of the most valuable documents that we have developed for our clients.
Download for free and implement today:
Step-by-step guide to creating marketing KPIs
Template for calculating KPIs for a marketer
9 Examples of Universal Selling Commercial Proposals
Upgrade your CPs to close more deals
How to make KPI for the sales department so that profits grow by 20% or more?
Step-by-step template for calculating KPIs for OP managers
Checklist of 12 main indicators for website promotion
Find out what metrics are needed to properly optimize your website
40 Services for Working with Blog Content
We have collected the best services for working with content
How to define your target audience without mistakes?
A proven guide to defining a company's target audience
Download the collection for free