Monthly Recurring Revenue (MRR)

Monthly Recurring Revenue (MRR) Description: Monthly Recurring Revenue shows how much revenue you collected from subscriptions. There are several variations of MRR, like Committed MRR (CMRR). It is non-GAAP metric, so analytics apps may calculate it differently. Use: Assess SaaS business month-to-month performance. Calculate all other SaaS metrics. Calculate recurring profit. Create projections to estimate future

  1. Author : mark@firstofficer.io
  2. December 11, 2019
Growth Ceiling

Growth Ceiling Description: The maximum MRR that the current customer flows can support. It’s the point where the MRR from incoming customers matches the MRR lost with the churned customers. Most importantly, at Growth Ceiling your current marketing spend is required just to keep your SaaS from shrinking. Use: Growth Ceiling will help you estimate if

  1. Author : mark@firstofficer.io
  2. December 11, 2019
Committed Monthly Recurring Revenue (CMRR)

Committed Monthly Recurring Revenue (CMRR) Description: Committed Monthly Recurring Revenue is an estimate of how much recurring revenue will be collected next month. It takes into account the current customer commitments and contracts. The biggest difference to Monthly Recurring Revenue (MRR) is that CMRR reduces the recurring revenue from customers who have cancelled their subscription, but the

  1. Author : mark@firstofficer.io
  2. December 11, 2019
Customer Churn Rate

Customer Churn Rate Description: The percentage of customers leaving the business. Use: Estimate how long an average customer stays. Needed to calculate Customer Life-Time Value. Some examples of monthly customer churn rates and respective customer life-times:   Target: Minimize churn – smaller the percentage the better. Recommended monthly churn rate is <1%. Recommended annual churn

  1. Author : mark@firstofficer.io
  2. December 11, 2019
Average Revenue Per Account (ARPA)

Average Revenue Per User (ARPA) Description: The average monthly recurring revenue from a paying customer. Use: Compare month-to-month performance per customer. Estimate how many customers you need to reach and acquire to achieve a certain MRR. Get a crude overview of which plans/prices customers prefer.  Target: Keep an upwards trend. No optimal value. The lower

  1. Author : mark@firstofficer.io
  2. December 11, 2019
End-of-Term Subscriptions aka Churn Baseline

End-of-Term Subscriptions shows who were able to leave – the people whose subscriptions needed to be charged during the month. It also shows how much recurring revenue could have been lost if they all had left. Why is this important? The customers who can churn create a baseline for all churn calculations – except for

  1. Author : mark@firstofficer.io
  2. December 11, 2019
Average Revenue Per User

Average Revenue Per User When you look at your metrics the first time, you are probably wondering: “Is this a good value? Am I kicking ass or throwing away money?” This article explains a couple of ways to use Average Revenue Per User (ARPU). It answers some common questions and shows how optimal trend looks

  1. Author : mark@firstofficer.io
  2. December 11, 2019
Am I losing high-value or low-value customers?

Am I losing high-value or low-value customers? If the MRR Churn Rate is bigger than Customer Churn Rate , you are losing more high-value customers. When you are reading the charts, losing high-value customers looks like this (June 2014):  When the green line for MRR Churn is clearly above the Subscription/Customer Churn (blue line), you are losing

  1. Author : mark@firstofficer.io
  2. December 11, 2019
ANNOUNCING SAAS METRICS & ANALYTICS LEARNING CENTER

ANNOUNCING SAAS METRICS & ANALYTICS LEARNING CENTER   I’m proud to present the SaaS Metrics & Analytics Learning Center. By now you’ve probably noticed that you don’t get insights on a silver platter – you’ll have to learn how to use the metrics first. It’s like with Google Analytics. You can use it to simply

  1. Author : mark@firstofficer.io
  2. December 11, 2019
ARE ROLLING METRICS DECEIVING YOU?

ARE ROLLING METRICS DECEIVING YOU? You felt that your last week’s email campaign was superb – until you looked at your metrics. How can the weekly MRR growth rate show 0% growth? What’s going on? It may be that your gut is right and you were deceived by rolling metrics. You are in a risk

  1. Author : mark@firstofficer.io
  2. December 11, 2019