Monthly Recurring Revenue
MRR shows predictable revenue from subscriptions normalized to a monthly amount, excluding one-time fees and usage-based charges.
- MRR is the total predictable recurring revenue your business generates each month from active subscriptions, normalized to a monthly value.
- Common Mistakes:
- Using the wrong denominator (e.g., all website traffic instead of relevant page visitors).
- Not segmenting conversion rates by traffic source, device, or user type.
- Comparing conversion rates across different funnels or time periods without context.
- Ignoring multi-touch attribution when users convert after multiple visits.
- Not accounting for seasonality or promotional effects.
- Optimizing for early-funnel conversion while ignoring downstream quality.
Definition
MRR is the total predictable recurring revenue your business generates each month from active subscriptions, normalized to a monthly value.
New customers and expansions exceed churn and contractions.
Revenue gains balance revenue losses.
Churn and contractions exceed new revenue.
Formula
MRR = Sum of all monthly subscription values for active customers
Variables
Recurring fee charged monthly per customer.
Annual contracts divided by 12 to normalize.
Examples
Simple MRR calculation
| Customer | Plan | Monthly Value |
|---|---|---|
| Company A | Pro Monthly | $99 |
| Company B | Enterprise Annual | $600 ($7,200/12) |
| Company C | Starter Monthly | $29 |
| Company D | Pro Monthly | $99 |
- 1Sum all monthly values: $99 + $600 + $29 + $99
- 2MRR = $827
Track in Daymark
Data Sources
Required Fields
- customer_id
- subscription_start_date
- monthly_value
- status
Sample Questions
- What is the current MRR?
- Show MRR growth month over month for the last year
- Break down MRR by customer plan or tier
- Calculate new MRR, expansion MRR, and churned MRR this month
- Show MRR trend with a forecast for next quarter
- Which customers contribute the most to MRR?
- What is our average MRR per customer?
Dashboard Template
Conversion by segment and period
Common Mistakes
- •Using the wrong denominator (e.g., all website traffic instead of relevant page visitors).
- •Not segmenting conversion rates by traffic source, device, or user type.
- •Comparing conversion rates across different funnels or time periods without context.
- •Ignoring multi-touch attribution when users convert after multiple visits.
- •Not accounting for seasonality or promotional effects.
- •Optimizing for early-funnel conversion while ignoring downstream quality.
FAQ
It varies by industry and funnel stage. SaaS trial signups often see 2-5%; landing page conversions might be 10-30%.
Track both. Macro conversions are end goals (purchases); micro conversions are steps toward them (signups, activations).
Weekly for high-traffic funnels, monthly for lower volumes. Ensure statistically significant sample sizes.