What Monthly Recurring Revenue is: the predictable amount of revenue you’ll get each month from your subscription business.
What Monthly Recurring Revenue is not: a forecast. A forecast, no matter how detailed, is really just a best guess of what your revenue will be. In a subscription model, you can actually get a more predictable amount based on subscribers and subscription price.
Why we care about Monthly Recurring Revenue: You’ll want to have an idea of your Monthly Recurring Revenue when you’re thinking about your pricing for Pay-Per-Click ads. We’re factoring in a bunch of other stuff, too, of course (like Cost Per Online Acquisition, Lifetime Value, and Retention Cost), but you’ll definitely want to know your Monthly Recurring Revenue numbers!
This post is part of an ongoing Clickipedia series, defining all the terms you need to know for conversion rate optimization. Keep checking back each week to learn more, and don’t forget to check out the whole series.