New MRR

What is New MRR?

New MRR (Monthly Recurring Revenue) KPI consists of the value of new subscriptions added to your monthly revenue. It provides useful and accurate insights into your business’ short-term profitability, as it reveals data that directly impacts your MRR, whether positively or not. For this reason, New MRR is a particularly valuable metric for use by subscription-based businesses as opposed to retailers, for example.

New MRR is a relevant metric for your sales team to monitor.

Why is New Monthly Recurring Revenue important?

While it’s a measurement of one simple metric, New MRR gives a wider indication of many other metrics and general trends in your business. It serves as a barometer for your business’ health and it’s easy to see why–if you’re adding new subscribers and therefore New MRR every month, you’re definitely doing something right. On the other hand, if your New MRR isn’t up to par, it’s probably time to take stock, reevaluate, and see what strategies require change.

How to calculate New MRR

New MRR is easily calculated by multiplying the number of new subscribers in the month by the MRR per subscriber.

Be sure to adjust for customers who don’t have a monthly subscription! For customers who have subscribed on an annual basis, divide their subscription by 12 to obtain their monthly rate.

Best practices for New MRR

New MRR is a common KPI for a manager to keep track of, as conclusions drawn from this metric can prompt changes in:

• Subscription strategy–if your current number of new subscriptions in a given month is below average;
• Marketing strategy–if you’re not hitting monthly benchmarks in marketing and sales. This revaluation could lead to updates in training your sales department, for example.

Customer acquisition cost, or CAC, is another useful metric to keep in mind when considering new MRR. If you’re spending more to acquire customers than they’re generating in new MRR, your spending efficiency could be improved.

Not to be confused with new MRR, there’s Net New MRR, a closely related KPI that indicates total MRR in the past month from new subscribers and expansion, minus MRR churn.

Because New MRR directly indicates the value of new subscriptions, the only way to increase New MRR is to increase your number of new subscribers--which is why it’s paramount for your marketing and subscription strategies to be rock-solid.

This is where Plecto steps in–check out our dashboards for optimizing your sales team’s performance today.

Other, related KPIs to New MRR include:

• Sales Win Rate
• Number of Won Deals
• Number of Leads Created