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Monthly Recurring Revenue (MRR), as the name suggests, is a consistent amount of income that a business receives every month. Used by subscription businesses and SaaS (Software as a Service) companies, MRR is used to anticipate their 30 days income for the subscription of a company’s product or service. It has emerged to become a significant metric for calculating a business’ revenue when compared to traditional metrics. As a business grow, it is equally important for it to identify the factors that lead to a change in MRR values over a period of time. And the total amount of such recurring revenues that a brand loses to account cancellations or closures are called as MRR churn. MRR values for a brand can be improved by charging the right amount from your users and providing the users exactly what they want. Often, businesses tend to charge less for their offerings on the thought of losing out customers. The amount you receive from your users and the value they get fro...

Customer Acquisition Cost (CAC) is a metric used to measure the cost associated with converting a customer to buy a brand’s product or service. This includes research, marketing and advertising costs incurred on convincing the customer. A significant metric used to ascertain the value of a customer to the brand, it also considers the return on investment after acquiring those customers. CAC helps a company to fix the amount to be spent depending on the profitability of each customer i.e., to understand a customer’s worth to a company. Usually, a company’s cost of acquiring customers is said to increase as it matures and often decreases when the company reduces in size and geographical distribution of its offerings.   This metric is widely used by B2B software sales companies, startups, magazine brands, internet-based companies, etc. To calculate the cost of acquiring a customer, divide the entire cost of sales and marketing over a given period of time with the number o...

A Service Level Agreement ( SLA ) is a contract defining the level of service expected by the end user from the service provider. It is output-based where its purpose is to define what service the customer will receive from the service provider. For example, Internet service providers commonly include service level agreements within the terms of their contracts with customers to define the level of service being offered, in simple language. SLA helps service providers to manage customer expectations and define the circumstances when they will not liable for any performance issues. It also benefits customers as they can compare the performance characteristics of one vendor with other. SLA is considered as one of the two foundational agreements the service provider has with its customers. The basic content in SLA includes a statement of objectives, a list of services to be covered as per the agreement, monitoring process and service level reporting, steps for reporting iss...

A Sales Qualified Lead is a prospect that has been thoroughly researched and evaluated by the company’s marketing department, which is ready for the next stage in the sales process. These prospects have displayed an interest in the company’s product/service and have fulfilled any of the lead qualification criteria determined by the company to decide if the buyer is a right fit or not. SQL tag is given to those prospects that reach out to your brand by organic means, ready to be converted into their full-fledged customer. Marketing Qualified Leads (MQL) are often identified by the marketing department and passed on to the sales team if these prospects show intent to buy, thereby becoming Sales Qualified Leads. The sales team continues interacting with them to explore their interests and capability of purchasing the company’s offerings. SQL is valued by through lead scoring process to determine SQL conversion rates. Many companies use lead scoring to assign values to eac...

Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) is a metric for measuring a company’s operating performance. It is an alternative method for evaluating a company’s performance without factoring in financial, accounting or tax decisions. EBITDA= Earnings before Interest and Tax (EBIT) OR Operating Profit + Depreciation + Amortization OR EBITDA= Net Income + Interest + Taxes + Depreciation + Amortization EBITDA is used to analyze and compare the profitability among different companies and industries which is calculated from the information found in a company’s financial statements. The earnings, tax and interest values are found in the income statement while depreciation and amortization values in the notes to operating profit or in cash flow statement. Companies tend to highlight their EBITDA value when their Net Income is not impressive. It can be sometimes used to distract investors from showing a company’s lack of profitability. Certai...

Marketing Qualified Lead (MQL) is a lead which is considered more likely to become a customer because of their interest they have expressed for the brand. These leads are identified based on their engagement with the business’ content in the website like voluntarily submitting an enquiry or contact form, opting for a program, adding any e-commerce products to shopping cart, downloading or repeatedly visiting your website. Each type of interaction from the user is assigned a lead score. The lead score is a metric that is intended to help salespersons and marketers to determine where exactly the visitor is in the buying cycle. If he is in the early stages then it it’s the duty of marketers to nurture this lead and convert it into sales. MQL is different from Sales Qualified Lead (SQL). SQL often indicates a user’s sudden interest for a brand or its products and the salespeople acts on these SQLs within 24 hours of discovery of such leads. Whereas, MQL is more of a lead’s/...

Net Promoter Score (NPS), an index ranging from -100 to 100 measures a customer’s willingness to recommend a brand’s products/services to others. It also helps in understanding a customer’s overall satisfaction with the brand’s product/service and their loyalty towards the brand. This metric predicts business growth and helps in customer experience management programs. NPS is calculated using 0-10 scale as the answer to key questions. Based on the response, it is classified into Promoters, Passives and Detractors. Promoters fall under a score of 9-10 indicating the loyalty of customers who will keep buying and referring to a brand’s product/service to others thereby boosting a brand’s growth. Passives fall under a score of 7-8 which means customers are satisfied but are enthusiastic about the brand’s offerings. These customers tend to choose over the brand’s competitors’ products/services. Detractors are customers who provide a score of 0-6 because they are unhappy with a b...