Monthly Recurring Revenue (MRR)

Monthly Recurring Revenue (MRR)

Monthly Recurring Revenue (MRR) is a key metric for SaaS businesses that measures the predictable revenue generated from subscription customers each month. It's the foundation for understanding business growth, forecasting, and making strategic decisions.

Understanding MRR

Basic Calculation

MRR = Number of Customers × Average Revenue Per Customer (ARPC)

Example

• 100 customers paying $50/month = $5,000 MRR
• 50 customers paying $100/month = $5,000 MRR

Types of MRR

New MRR

Revenue from new customers acquired in the current month

• Calculation: New customers × their monthly subscription value
• Importance: Indicates growth momentum and acquisition success

Expansion MRR

Additional revenue from existing customers through upgrades

• Sources: Plan upgrades, add-on purchases, user seat increases
• Impact: Typically higher profit margins than new customer acquisition

Contraction MRR

Revenue lost from existing customers through downgrades

• Causes: Plan downgrades, feature removals, user seat reductions
• Mitigation: Customer success programs, value demonstration

Churned MRR

Revenue lost from customers who cancel their subscriptions

• Impact: Directly reduces total MRR
• Recovery: Win-back campaigns, exit surveys for improvement

MRR and Affiliate Marketing

Affiliate Impact on MRR

• New customer acquisition: Affiliates drive new MRR growth
• Customer quality: Affiliate-driven customers often have higher LTV
• Geographic expansion: Affiliates can access new markets
• Reduced CAC: Lower customer acquisition costs through affiliates

Commission Structure Considerations

• First-month commission: One-time payment for initial MRR
• Recurring commissions: Ongoing payments for continued MRR
• Hybrid models: Initial + ongoing smaller percentages

LinkJolt MRR Tools

Use our SaaS Commission Calculator to:

• Model affiliate impact on MRR growth
• Calculate optimal commission structures
• Project long-term revenue effects
• Balance commission costs with MRR growth

MRR Benchmarks

Growth Rates by Stage

• Early stage (0-$1M ARR): 15-30% monthly growth
• Growth stage ($1M-$10M ARR): 10-20% monthly growth
• Scale stage ($10M+ ARR): 5-15% monthly growth

Ready to optimize your MRR with affiliate marketing? Start with LinkJolt today.