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MRR - The Purring Lion of SaaS Metrics
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When? This feed was archived on March 26, 2022 05:29 (). Last successful fetch was on July 01, 2019 13:33 ()
Why? Inactive feed status. Our servers were unable to retrieve a valid podcast feed for a sustained period.
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Manage episode 220141446 series 2402347
Jason and Eren dive into MRR, monthly recurring revenue -- a metric critical to SaaS businesses that can be a little tricky if you deal with real customers and not just spreadsheets.
They dive into MRR, monthly recurring revenue -- a metric critical to SaaS businesses that can be a little tricky if you deal with real customers and not just spreadsheets.
They talk about how MRR is a useful metric for businesses to understand their future prospects as well as provide a business’ board and investors information to determine valuations.
The composition of customers that make up a company’s MRR provides important details about the overall health of the company:
- New customers - brand new contracts, the term (12-36 month), the percentage of recurring revenue within the overall booking
- Expansion within customers - existing customers adopting additional or upgraded recurring services
- Contraction within customers - existing customers reducing the services licenses
- Churn - lost customers during a certain period
Jason explains an interesting segmentation strategy by also thinking about reactivation MRR. If you understand that certain segments of the your customer base are more transactional in nature, you can also include reactivation MRR (or prior customers that reactivate your service). Modeling this component of MRR can help you more accurately predict future revenue & cash flow and smooth lumpiness from churn associated with certain segments of your customer base.
5 episodes
Archived series ("Inactive feed" status)
When? This feed was archived on March 26, 2022 05:29 (). Last successful fetch was on July 01, 2019 13:33 ()
Why? Inactive feed status. Our servers were unable to retrieve a valid podcast feed for a sustained period.
What now? You might be able to find a more up-to-date version using the search function. This series will no longer be checked for updates. If you believe this to be in error, please check if the publisher's feed link below is valid and contact support to request the feed be restored or if you have any other concerns about this.
Manage episode 220141446 series 2402347
Jason and Eren dive into MRR, monthly recurring revenue -- a metric critical to SaaS businesses that can be a little tricky if you deal with real customers and not just spreadsheets.
They dive into MRR, monthly recurring revenue -- a metric critical to SaaS businesses that can be a little tricky if you deal with real customers and not just spreadsheets.
They talk about how MRR is a useful metric for businesses to understand their future prospects as well as provide a business’ board and investors information to determine valuations.
The composition of customers that make up a company’s MRR provides important details about the overall health of the company:
- New customers - brand new contracts, the term (12-36 month), the percentage of recurring revenue within the overall booking
- Expansion within customers - existing customers adopting additional or upgraded recurring services
- Contraction within customers - existing customers reducing the services licenses
- Churn - lost customers during a certain period
Jason explains an interesting segmentation strategy by also thinking about reactivation MRR. If you understand that certain segments of the your customer base are more transactional in nature, you can also include reactivation MRR (or prior customers that reactivate your service). Modeling this component of MRR can help you more accurately predict future revenue & cash flow and smooth lumpiness from churn associated with certain segments of your customer base.
5 episodes
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