What does MRR mean?

Definition and explanation

MRR stands for "Monthly Recurring Revenue" and is used to measure the predictable income generated by a company's subscription-based business model. It represents the sum of all revenue that a customer brings in on a monthly basis, including any upsells or downgrades to their subscription plan. MRR is a key metric for SaaS (Software as a Service) businesses, allowing them to monitor their revenue streams and forecast future growth. By calculating MRR, businesses can make more informed decisions about pricing, customer acquisition, and retention strategies.

Why it matters in sales

In the sales game, there's no trophy for first place. It's all about consistency, and that's where MRR comes in. Monthly Recurring Revenue is like the reliable friend who always shows up on time. It's a key metric for SaaS organizations, giving them a constant pulse on their income stream and making it easier to predict future earnings. By understanding MRR, sales teams can make smarter choices around pricing and customer acquisition, setting themselves up for success in the long term. So while it might not be the flashy metric that gets everyone's attention, MRR is the workhorse that keeps the sales machine running smoothly.

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