Monthly recurring revenue (MRR) is the amount of revenue that your company expects to receive each month:<\/p>\n
MRR = Average revenue per customer * total number of active customers<\/strong><\/p>\n It’s one of the most important metrics for subscription businesses, which must track MRR to predict cash flow and understand their company’s financial health.<\/p>\n This example\u00a0<\/em>CEO dashboard in Geckoboard<\/em><\/a>\u00a0puts MRR right at the center. It shows how it\u2019s changed over time to give the CEO additional context.<\/em><\/p>\n Venture-backed companies (or those looking to raise a round of funding) need to show investors reliable evidence of growth. MRR is one clear indicator of future revenue, so you will want to put this front and center on your dashboard. Because MRR is relatively stable, leadership teams can use this metric to build out financial forecasts based on predicted growth rates, so you can make plans for the future of your business.<\/p>\n On your executive dashboard, you could track MRR as a single metric to get an overview of your monthly revenue, or you could split it into categories to see how different areas of the business are performing:<\/p>\n You could also add a comparison against the previous month so you can track MRR growth over time.<\/p>\n 2. Gross MRR churn rate<\/p>\n Who should track: SaaS and subscription companies<\/strong><\/p>\n Gross MRR churn rate is the percentage of total monthly recurring revenue lost from customers that canceled or paused their contracts. It lets you see the financial impact of lost customers and downgrades on the company.<\/p>\n Gross MRR churn rate (%) = (Total amount of lost revenue \/ MRR at the start of the month) * 100<\/strong><\/p>\n If you track net MRR churn (which is your gross MRR churn offset by any additional revenue gained from account upgrades and expansion) instead of gross churn, you might be accidentally sugar-coating your churn metrics and getting a false impression of your current performance. By looking at gross MRR churn, you can\u2019t soften the blow by offsetting some of your churn with expansion revenue. Track gross churn on your executive dashboard to give yourself a clear idea of how many customers are leaving your business.<\/p>\n Need a primer on calculating churn? We\u2019ve got an in-depth article on\u00a0MRR churn rate<\/a>.<\/p>\n 3. Revenue per customer<\/p>\n Who should track: All companies<\/strong><\/p>\n Revenue per customer is the average amount of revenue you generate from each customer. It helps you put a dollar value on your customers, averaged out across different order values and price points. Tracking this over time will help you understand if you\u2019re generating more or less revenue from each customer, so you can predict revenue growth based on customer volume.<\/p>\n While there are many different ways to grow your business, many companies look to grow by moving upmarket and targeting bigger accounts. In this case, revenue per customer is an essential metric for your executive dashboard. Over time, you\u2019ll see if you\u2019re increasing or decreasing revenue per customer. If it\u2019s increasing, that suggests you\u2019re successfully attracting higher-value accounts, seeing more customer upgrades, or generating more repeat orders \u2013 all great signs of customer loyalty and business growth.<\/p>\n Every company can divide total revenue by the number of customers to track this metric, but you may want to vary how you track this figure based on the nature of your business.<\/p>\n Keep in mind, significant outliers (like one bulk order or one new enterprise account) can significantly skew revenue per customer, but it\u2019s still a useful metric to track on your dashboard.<\/p>\n 4. Burn rate<\/p>\n Who should track: Startups<\/strong><\/p>\n Burn rate is how much money your startup spends in a month:<\/p>\n Burn rate = Total cash at the start of the month – Total cash at the end of the month<\/strong><\/p>\n You should include all money spent when calculating burn rate \u2013 even one-off expenses such as a laptop for a new hire or replacing broken office furniture. Otherwise, you won\u2019t have an accurate picture of your startup\u2019s financial position.<\/p>\n By tracking burn rate on your executive dashboard, startup executives can keep a close eye on their expenditures and spot potential financial problems, such as increased operating costs or a hefty one-off expense.<\/p>\n Burn rate and cash runway (see the next section) go hand-in-hand. If one month you see a sudden spike in your burn rate, you know that\u2019ll shorten your cash runway unless you\u2019re able to cut costs or quickly bring in more revenue.<\/p>\n 5. Cash runway<\/p>\n Who should track: Startups<\/strong><\/p>\n Cash runway<\/a>\u00a0measures how long your money will last based on your current rate of expenditure:<\/p>\n Cash runway (months) = Cash balance ($) \/ Monthly burn rate (S)<\/strong><\/p>\n The golden rule of startups is never to run out of money. For startup founders, cash runway is a metric you should know by heart. If you don\u2019t track this figure, you could end up with the nasty surprise of not being able to meet financial obligations \u2013like making payroll for employees.<\/p>\n Tracking cash runway on your dashboard will help you stay on track. You\u2019ll know when you need to start your next funding round, increase revenue through more aggressive sales tactics, cut unnecessary spending, or even make layoffs.<\/p>\n 6. Customer retention over time<\/p>\n Who should track: SaaS and subscription businesses<\/strong><\/p>\n Subscription companies\u2019 growth depends on their ability to retain customers. If you\u2019re losing lots of customers each month, you need to replace the same quantity of customers just to maintain your monthly revenue, but if you can retain the majority of your customers, then the bulk of your new customers will bring in new revenue each month.<\/p>\n Gauge the health of your subscription business by tracking customer retention on your executive dashboard. You\u2019ll be able to see at a glance how the metric is changing, so you can identify any warning signs before they become apparent.<\/p>\n A sudden drop in retention is a major cause for concern that you\u2019ll need to investigate. Was there a product or pricing update that triggered a bunch of customers to cancel their subscriptions? A slow, gradual decline in retention is also concerning but less noticeable.<\/p>\n This\u00a0<\/em>early-stage startup dashboard in Geckoboard<\/em><\/a>\u00a0shows how customer retention drops over time.<\/em><\/p>\n Alternatively, you could track\u00a0customer churn rate<\/a>\u00a0over time to see the percentage of customers lost in a given period. This will give you the same information but from the opposite view, looking at customers lost rather than customers retained.<\/p>\n 7. Number of customers<\/p>\n Who should track: All companies<\/strong><\/p>\n This metric is pretty straightforward: it\u2019s how many customers you have. Tracking this number over time will help you see whether you\u2019re gaining or losing customers overall.<\/p>\n Number of customers may seem like a bit of a vanity metric, but it’s a good pulse check to see whether you’re successfully growing your customer base. You should also consider context when tracking customers in absolute numbers. If you\u2019ve recently raised your prices, then a stable or even declining customer number may not be a cause for concern.<\/p>\n Track the number of customers to see an easy-to-understand snapshot of your company’s performance.<\/p>\n 8. Customer satisfaction (CSAT) score<\/p>\n Who should track: All companies<\/strong><\/p>\n CSAT<\/a>\u00a0is the percentage of customer satisfaction survey responses you receive that are positive:<\/p>\n CSAT (%) = (Number of positive responses \/ Total number of responses) * 100<\/strong><\/p>\n Your customer service team sends customers a short survey after a support interaction asking them to rate the help they received. This is commonly a rating scale from 1-5 or good to poor, and it tells you how satisfied your customers are with the service they received.<\/p>\n Our\u00a0Customer Support Experience Report\u00a0<\/a>found that CSAT was the most important metric for 48% of the support teams we surveyed.<\/p>\n If you consider yourself a customer-centric company, providing high-quality service shouldn\u2019t only be a focus for your support team. Tracking your CSAT score on your executive dashboard shows that customer satisfaction is a top priority for you as the CEO and, therefore, the rest of the business. It elevates your customers’ needs alongside your big picture company metrics and keeps your customers front of mind when making crucial business decisions.<\/p>\n Create an executive dashboard that helps you make your best decisions<\/p>\n An executive dashboard\u2019s design should make it easy to see your company\u2019s most important metrics. When designing your dashboard, less is more: a cluttered dashboard is difficult to read because you\u2019ll be seeing so many graphs and numbers that you can\u2019t spot what\u2019s important and what\u2019s not.<\/p>\n Be selective with the metrics you choose so that you\u2019re only tracking the most important KPIs on your executive dashboard. This will help you get the insights you need at a glance. Download our\u00a0dashboard design guide<\/a>\u00a0to learn the best practices for creating a dashboard that shows you all the information you need in a clear and easy-to-understand format.<\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":" Executive dashboards: Which metrics should you track and why? You want to grow and strengthen your company, but you can\u2019t do that if all of your important data is buried in spreadsheets or held by dozens of different people across the organization. Uncover key information with an executive dashboard. This display provides an overview of … Continue reading Executive dashboards – Which metrics should you track and why?<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":2137,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[25],"tags":[32,79,43,26,68,82,78],"class_list":["post-2162","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bookmarked-articles","tag-analytic","tag-bi","tag-dashboard","tag-data","tag-kpi","tag-management","tag-visualization"],"_links":{"self":[{"href":"https:\/\/mintea.blog\/index.php?rest_route=\/wp\/v2\/posts\/2162","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mintea.blog\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mintea.blog\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mintea.blog\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/mintea.blog\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=2162"}],"version-history":[{"count":2,"href":"https:\/\/mintea.blog\/index.php?rest_route=\/wp\/v2\/posts\/2162\/revisions"}],"predecessor-version":[{"id":2167,"href":"https:\/\/mintea.blog\/index.php?rest_route=\/wp\/v2\/posts\/2162\/revisions\/2167"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mintea.blog\/index.php?rest_route=\/wp\/v2\/media\/2137"}],"wp:attachment":[{"href":"https:\/\/mintea.blog\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2162"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mintea.blog\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2162"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mintea.blog\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2162"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![\"Graphical](\"https:\/\/mintea.blog\/wp-content\/uploads\/2022\/05\/graphical-user-interface-description-automaticall.png\")
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