Monthly recurring revenue (MRR) is essential for sustainable growth in any subscription-based business. Whether you’re a startup or a mature company, increasing your MRR boosts cash flow and improves long-term stability.

Below, we’ll cover nine ways SaaS businesses can increase monthly recurring revenue.

What’s in this article?

• What is monthly recurring revenue (MRR)?
  
• How to calculate MRR
  
• Nine ways to increase MRR
  
• How Stripe Billing can help
  

What is monthly recurring revenue (MRR)?

Monthly recurring revenue (MRR) is the revenue a business expects to generate each month. MRR is a key metric for businesses that sell subscriptions and memberships. There are different types of MRR, including New MRR (what is generated by new customers) and Churn MRR (what is lost due to customers canceling their subscriptions). Alongside other metrics such as growth rate, retention, and churn, MRR offers visibility into the overall health and performance of the business. This information can be useful in making decisions in many areas of a business, including sales goals and financial planning.

How to calculate MRR

MRR refers to revenue that is predicted to come into a business on a recurring basis, often from customer contracts relating to subscriptions and memberships. To calculate MRR, you need to first figure out your average revenue per account (ARPA). This is particularly important for businesses that sell different membership tiers or subscriptions for different levels of usage or access.

ARPA is calculated with this formula:

Total Amount of Revenue ÷ Total Number of Customers = ARPA

MRR is calculated with this formula:

Average Revenue per Account x Total Number of Customers per Month = MRR

For example, if your business sells software subscriptions, and you have 1,000 customers who each pay $60 per month, then your MRR is $60,000.

Nine ways to increase MRR

Not every method of increasing MRR will make a difference for every SaaS business, but these nine simple tactics apply to most subscription models in most cases:

1. Optimize and update your pricing and billing models.

Supporting a wide range of pricing models keeps your business agile as it grows. Flexible billing logic with Stripe makes it easy to experiment with new pricing structures, improve revenue, and develop new revenue streams by quickly launching new services and products.

Pricing models include:

• Flat-rate pricing
  
• Good-better-best pricing
  
• Per-seat pricing
  
• Usage-based pricing
  
• Tiered pricing
  
• Multiple prices
  
• Multiple products in a subscription
  

For more detail about designing a subscription integration, read this guide.

Updating your pricing models might mean raising prices for your goods and services for the following reasons:

• Cost of materials has increased since your last pricing exercise.
  
• Cost of labor has increased (or needs to increase).
  
• Comparable offerings in the market are priced higher than yours.
  
• You’re restructuring your pricing model to emphasize certain subscription tiers, products, or services to align with business goals.
  

Strategically adjusting your pricing, when necessary, is part of any growth strategy. As you periodically review high-level business goals and decide where you want to focus your energy and resources, part of that exercise should include reviewing your prices and making thoughtful adjustments.

2. Facilitate and encourage movement to preferred pricing plans and tiers.

As you build out more dynamic pricing and billing options, give your customers the ability to easily switch between different tiers—especially when it comes to upgrading or switching from a tier you’re trying to phase out. The way you structure your subscription tiers should directly align with an upselling-oriented strategy. The features, perks, and access available to customers in each tier should be portioned out to entice users to level up.

With Stripe, enabling these actions for your customers is possible through the customer portal. The customer portal allows your customers to manage their payment details, invoices, and subscriptions in one place. You can also include links to the customer portal in upselling or cross-selling campaigns to facilitate more direct conversion to any new billing or subscription plans you offer.

3. Improve your dunning management.

Dunning is how you communicate with your customers to collect past-due balances before canceling their accounts. How well or poorly your business approaches this task can have a huge impact on churn and MRR, and regularly engaging with customers to build stronger relationships can help reduce churn and the need for dunning management.

Businesses that use Stripe Billing have access to dunning tools that have helped businesses recover 38% of failed recurring payments (on average). This includes Smart Retries, which typically recover 11% more revenue than retrying failed payments on a set schedule.

4. Refresh your product and subscription catalog.

The way customers navigate and interact with your catalog of subscription options can have a significant impact on your revenue. Your digital storefront should be clear and intuitive, with strategically constructed customer pathways that keep users and convert them.

Examine your engagement metrics, and pinpoint moments when users tend to drop out of the conversion funnel. Where are you losing people? What does that tell you about what you can change on your website to increase conversion?

Similarly, take a critical look at how less popular products or membership options are presented online. Is their lack of popularity a reflection of customer disinterest, or do you need to reconsider how you’re positioning and marketing these underperformers?

5. Offer—and advertise—discounts.

Promotional pricing is a great way to boost sales, and it can be structured in many different ways. Understanding how sales increase or decrease at different times of the year can help you time discounts strategically. Knowing which market segments prefer certain products or services—seasonally or generally—lets you target promotions to boost slow periods or amplify strong ones.

Using Stripe Billing, you can apply discounts to the subscriptions you offer and use coupons to create promotion codes to share with your customers.

6. Create custom landing pages.

Content marketing is a powerful revenue driver for most businesses. Depending on your industry and your key audience segments, different content formats will perform better than others.

Custom landing pages that showcase different value propositions, use cases, or features consistently perform well for most businesses by capturing diverse traffic streams. Additional benefits include:

• No need to choose: Using multiple unique landing pages eliminates the need to choose which value propositions to prioritize in your web copy.

• Better customer insights: You learn what features and messaging directions resonate most with different audiences. Custom landing pages, and the marketing and advertising assets that support them, will generate measurable performance metrics that give your team clear insights. Those insights will help you determine what messages and features compel audiences to act, and which ones don’t.

7. Expand upmarket.

If your business caters to small businesses or individual consumers, and you want to increase your MRR, it’s worth visualizing what an offering for enterprise customers might look like.

Even products and services that don’t hold obvious upmarket viability might have potential. For example, if your primary product is a mental wellness app for individuals, it could be worth exploring a white-label version for enterprise customers to offer as an employee perk.

8. Upsell users who are on free plans.

Growing your customer base leads to increased MRR, and free subscription plans can be a highly effective way to attract new customers. No matter how you structure a free subscription or trial, you should regard it as an incentive that converts nonpaying users into paid customers.

9. Track performance with detailed reporting—and act on what your analytics tell you.

The best subscription models are nuanced, flexible, and accommodating, and relevant to as much of your market as possible. But a best-laid subscription model often comes with increased complexity, so detailed performance tracking and reporting are important to gaining actionable insights into what’s working and what needs improvement. These performance metrics can also help personalize marketing campaigns, upselling strategies, and custom landing pages.

How Stripe Billing can help

Stripe Billing lets you bill and manage customers however you want—from simple recurring billing to usage-based billing and sales-negotiated contracts. Start accepting recurring payments globally in minutes—no code required—or build a custom integration using the API.

Stripe Billing can help you:

• Offer flexible pricing: Respond to user demand faster with flexible pricing models, including usage-based, tiered, flat-fee plus overage, and more. Support for coupons, free trials, prorations, and add-ons is built-in.

• Expand globally: Increase conversion by offering customers’ preferred payment methods. Stripe supports 125+ local payment methods and 130+ currencies.

• Increase revenue and reduce churn: Improve revenue capture and reduce involuntary churn with Smart Retries and recovery workflow automations. Stripe recovery tools helped users recover over $6.5 billion in revenue in 2024.

• Boost efficiency: Use Stripe’s modular tax, revenue reporting, and data tools to consolidate multiple revenue systems into one. Easily integrate with third-party software.

Learn more about Stripe Billing, or get started today.