Also known as: Monthly Recurring Revenue, Recurring monthly revenue
The predictable monthly revenue an agency (or SaaS company) generates from subscriptions — a key KPI because it measures stable income, unlike one-off projects.
For agencies working with retainer models (a fixed monthly fee per client), MRR is the cornerstone of financial planning. An agency with 15 clients at an average of €1,200/month has an MRR of €18,000 — predictable and stable. One-off projects (logo design, a one-time consult) don't count toward MRR.
What grows MRR: new clients (new MRR), price increases or upsells with existing clients (expansion MRR). MRR drops through churn (a client leaves) or contraction (a client moves to a lower plan).
An agency started January with 10 clients × €1,000 = €10,000 MRR. By May: 14 clients × an average of €1,150 = €16,100 MRR. Growth of €6,100 MRR in four months = a strong trend. On the basis of MRR the CFO can forecast whether there's room for extra staff.
A software licensing model where users get online access to software through a monthly or yearly subscription — instead of buying software and installing it locally.
A pricing model where an agency (or software vendor) pays per active client they manage — instead of per user, per social account or per feature.
The percentage of clients who cancel within a given period (usually per month or year). Keeping churn low is essential to an agency's health, since winning new clients costs more than retaining existing ones.
A pricing model where an agency (or software vendor) pays per active client they manage — instead of per user, per social account or per feature.
The percentage of clients who cancel within a given period (usually per month or year). Keeping churn low is essential to an agency's health, since winning new clients costs more than retaining existing ones.
The total revenue (or profit) a customer generates on average over the entire relationship — crucial for deciding how much you can invest in customer acquisition.
The total cost of winning one new customer — including marketing, sales hours and tooling. A healthy CAC is far lower than LTV (ratio of at least 1:3).
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