Monthly Recurring Revenue Calculator
MRR - is the company's regular monthly income. This metric is normally tracked by start-ups, SaaS services, and other companies that operate on a subscription model.
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The MRR will be automatically calculated for you as per the formula easy and fast online
What is the MRR rate?
What is monthly revenue? The monthly recurring revenue average rate is one of your business success indicators. In case the MRR sales of the company are growing steadily, then the products or services are in high demand in the market. Situations, where the MRR stays the same or decreases, may indicate that certain actions need to be taken to prevent churn.
What are the benefits of MRR calculator?
Automated free MRR calculation allows you to fast and easily define your revenue percentage. It will make the formula work precisely. Companies can better prioritize their focus and funds if they know how to calculate the MRR of a subscriber instead of wasting time on manual calculations and searching for proper measurements.
How does our MRR calculator work?
To calculate monthly recurring revenue is simple. All you need is to just multiply the monthly subscribers' number by the average revenue per user (ARPU). And the monthly recurring revenue calculator does it for you automatically. For subscriptions under annual plans, MRR is more often calculated by means of dividing the annual price plan by 12 and then multiplying the result by the customers’ number on the annual plan. For example, the average income per customer per month is $ 20, and the total number of customers for this period is 100 people. You do the calculation:
MRR = 20×100 = $2000
With the online calculator, you don’t need to do it manually.
What are the ways to optimize MMR?
Since MRR is directly related to the level of customer retention and loyalty, to optimize MRR metrics you need:
- build long-term relationships with customers,
- start word of mouth,
- grow real brand advocates,
- track customer churn,
- improve your sales funnel,
- develop loyalty programs,
- gather customer feedback on a regular basis, etc.
Combine email newsletters, chatbots, SMS, and web push notifications into a single omnichannel strategy. If a customer stops using the service or wants to unsubscribe, find out the reason why and try to fix it. To increase MRR, motivate users to switch to more expensive tariff plans. So, improve your communication, build a new customer acquisition strategy, improve service quality, and increase retention and your MRR will grow.
What are the common mistakes in calculating MRR?
Let's look at the main errors that companies can make in their calculations:
- ignore discounts,
- account for one-time payments,
- account for users in the trial period.
When calculating MRR, the accuracy of the data used is important. To calculate the average monthly income, only recurring payments are used from period to period. Not all leads become customers. Therefore, counting possible purchases as income is a big mistake.
How to calculate MRR and ARR correctly?
Annual Recurring Revenue, or ARR, is also a Subscription Economy metric that reveals the money that comes in every year for the life of a subscription (or contract). Thus, for the ultimate accuracy of both calculations, other types of MRR should be taken into account:
- new MRR - additional income from new customers;
- extended MRR - profit from existing customers by switching to a more expensive price plan;
- churned MRR - lost revenue associated with the outflow of customers.
Thus, learn how to increase your company's average monthly income and apply the calculator to get the exact measures for your revenues.