In SaaS products, we often tend to push customers to pay yearly, bi-annually, or quarterly instead of monthly by giving a 2-month, 1-month, and half a month discount. How do we calculate the MRR in this case?

Your MRR will be lower.

So is it worth it — the “discount”? The “lost” MRR? Especially if the customer stays 5–10 years, and you lose that extra-discounted revenue for a decade?

It probably isn’t if your churn is negative / very low.

But, it is worth it if it makes it easier for your customers to buy … and/or if you need the cash up front …

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Published on December 13, 2018

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