From the course: Growth Marketing Foundations
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Monthly recurring revenue (MRR)
From the course: Growth Marketing Foundations
Monthly recurring revenue (MRR)
- MRR stands for Monthly Recurring Revenue. And it's the measurement of your predictable revenue stream. Growth marketers of subscription-based services often evaluate how a business is expanding by calculating the total recurring revenue generated from their customer base. Now there's two basic ways to calculate it. The first is to add up the value of your paid subscriptions. If you have three plans at $5, $10 and $15 and you have one customer on each plan, your MRR is the sum of those values, so $30. A better approach, especially as you scale, is to measure the Average Monthly Recurring Revenue Per User, or ARPU. So you'll take the number of customers and multiply that by the average fee. If you had 10 customers paying an average of $10 per month, you'd have an MRR of $100. Now, when you track MRR it's important to keep in mind that the metric is limited. For starters, if you have annual plans, it'll really complicate your…
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