A Complete Guide to Measuring Your SaaS Revenue: MRR and Other Important Metrics

Did you know that SaaS companies that keep a close eye on key revenue metrics like Monthly Recurring Revenue (MRR) are up to 33% more likely to grow from one year to the next? MRR is more than just a number; it’s what keeps a SaaS business going. But knowing about MRR is only the start. You can change how you grow your business and keep customers by picking a set of carefully chosen metrics.

No matter how much you know about SaaS or how new you are to it, this guide will teach you everything you need to know about measuring SaaS revenue, with a strong focus on MRR. Let’s look at how keeping an eye on these metrics can help you keep growing and making money.

 What is SaaS revenue, and why does it matter?

Selling subscription-based software solutions brings in recurring revenue, which is also known as SaaS revenue. SaaS is a great business model for both entrepreneurs and investors because it is predictable and can grow as needed. But this same ability to predict depends on tracking and optimising things correctly.

If you don’t have clear revenue metrics, you’re pretty much flying blind. Checking SaaS revenue gives you: – An idea of how your finances are doing.

—The ability to see trends and guess how much money will be made.

— Information about how customers act.

– Clear data to help with plans for growth.

Month-to-Month Recurring Revenue (MRR) is the most important of these metrics.

 The Power of MRR

MRR tells you how much money your business can expect to make each month from subscriptions. MRR is different from one-time sales because it gives you a stable starting point to track your growth over time.

This is why MRR is so important:

1. Look at your growth: keep track of the money you make from upgrades and add-ons versus the money you lose when customers leave.

2. • Predictions: MRR gives you information about future income, which helps you make more accurate budgets.

3. Strategic Pricing: This helps you figure out which plans work best and makes suggestions for changes that will make things better.

Your MRR is $5,000 if you charge $100 a month and have 50 active subscribers. This number will keep going up as long as churn is low and expansion revenue is high.

 Important SaaS Metrics After MRR

Track these metrics along with MRR to get a full picture of your SaaS revenue:

1. Annual Recurring Revenue (ARR): This is a long-term look at revenue that is found by multiplying MRR by 12.

2. “Churn Rate” is the number of customers who cancel their subscriptions every month. When churn is high, MRR goes down directly.

3. “Customer Lifetime Value” (CLV) is the amount of money you expect to make from a single customer over the course of their lifetime.

4. Customer Acquisition Cost (CAC): The price you pay to get a new customer. By comparing CAC and CLV, you can be sure of making money.

5. Net Revenue Retention (NRR): This number shows how much revenue you’re able to keep after taking out churn and upsells.

How to Get the Most Out of Measuring SaaS Revenue

 1. Separate sources of income

Divide MRR into categories such as: – New MRR from fresh subscriptions.

– MRR growth from upgrades.

—MRR that was churned was lost to cancellations.

2. Make it easier for customers to stay with you

Minimising churn is very important. Provide a smooth onboarding process, quick support, and ongoing value through features that address real issues.

3. Use strategies for setting prices

Look at ARPU (Average Revenue Per User) to improve your pricing levels and make the most money without turning off your customers.

4. Set up an automated way to collect metrics

To get accurate measurements, you need strong tools that get rid of mistakes made by hand and make data collection faster.

 Why HubSpot Changes the Game for SaaS Metrics

When it comes to a reliable tool to track and improve SaaS revenue, HubSpot is the best choice. As an all-in-one platform for running a business, HubSpot has tools that are designed to keep an eye on key metrics like MRR, ARR, and churn rate.

HubSpot helps you: – Use real-time dashboards to automate the way you track your sales.

– Learn about customer behaviour and trends that you can use to make decisions.

– To centralise data, make sure it works well with the rest of your tech stack.

– Use its CRM and marketing tools to get customers more involved, which has a direct effect on keeping customers and making more money.

With HubSpot, you can stop tracking things by hand and start using data to make decisions that save time and get consistent results.

1: “Final Thoughts”

Any SaaS business that wants to do well in a competitive market needs to track its revenue, especially with key metrics like MRR. You can turn data into useful insights and achieve long-term growth if you have the right plans and tools.

Are you ready to take charge of keeping track of your SaaS revenue? 
Get in touch with our HubSpot Specialist for a demo so you can understand how this can help your software company. Book a call here.