For our customers using Pipedrive or HubSpot CRM or Salesforce Dear Lucy has a solution allowing you to track Monthly Recurring Revenue and Annual Recurring Revenue (MRR and ARR respectively), both in terms of New MRR / ARR as well as Base, Upgrade and Churn data.
The solution works if you are using the default recurring revenue features in in your CRM, or whether you have set up the required fields through custom fields in your Deals or Opportunities endpoint. The required fields for MRR / ARR to work in Dear Lucy are:
Contract date start field (date field)
Contract date end field (date field)
Recurring revenue field (value field)
Setting up custom fields for MRR/ARR - How will this work in your CRM?
For most SaaS business, the total deal value contains one part subscription revenue (MRR or ARR), as well as one part services, or Non-Recurring Revenue (NRR). Using these fields shown above will allow you to track both ARR/MRR and NRR in the same deal.
The first step, if you don't have these fields already, is to create the custom fields listed above. If you're not sure how to set-up custom fields to deals in your CRM. Please refer to your CRM's support pages:
You should add these fields to the "deal creation" view in your CRM as well, so that these fields are always filled in (important especially for the recurring revenue value field and the contract start date field).
Once these fields are set-up, the next time you create a new deal, you should fill in the following fields as follows:
1. Value / Amount field: This is the normal value field for a deal - it should compromise of the MRR/ARR value + any services values. In other words, the total deal value.
2. ARR / MRR field: This part should contain only the monthly or annual recurring revenue part of the deal. Dear Lucy works both whether you are using MRR value only, or whether you typically fill in the ARR value (12 x MRR).
3. Contract start date: This is often the same date as the closed won date of the deal. But in some cases the subscription may only start at a later date. In those cases, fill in the date when the subscription starts.
4. Contract end date: Leave this field empty if you have automatic renewal in place for your customers' subscriptions. Howver, if you have fixed periods for your subscriptions and contracts are not automatically renewed, then you can put in the subscription end date as well.
With these fields in use, Dear Lucy will be able to show details on New and Base MRR / ARR, as well as churn and NRR figures.
Using CRM default solutions for MRR/ARR - How will this work in Dear Lucy?
If you're using the products feature in your CRM, Dear Lucy will get the necessary fields automatically and be able to separate recurring and non-recurring revenue from your CRM's standard deal fields.
Important information: How the solution works and how you should use your CRM
For this to work in Dear Lucy seamlessly, it's important to understand Dear Lucy's logic to how we illustrate ARR / MRR in Dear Lucy:
We count deals with a value in the ARR/MRR field as part of Base MRR/ARR if they have
i) "Won" status,
ii) a contract start date
iii) does not have a contract end date in the past
If the deal has a contract end date, Dear Lucy will consider this as a churned customer (at the date of the contract end date.
Deals that are part of the Base MRR/ARR should not have a contract end date in the CRM in the past.
If you do not have automatic renewal for their SaaS MRR/ARR, you can add a contract end date to the CRM for when the period ends. If that customer then renews, a new deal should be created and the deal will be counted as a new deal.
If you want to track 'renewals', you must add an additional field for this if it does not exist already. This will allow Dear Lucy to distinguish between a completely new deal, to a renewal deal.
If a current deal is 'upgraded' so that the same deal brings in more MRR /ARR, the customer should put a contract end date for the existing deal (but keep it as "Won") and make a new deal which has the upgrade value only (Total value of customer deal - Existing value of the customer deal = Upgrade value of the new deal).
For Non-Recurring (NRR), Dear Lucy calculates Total deal value - MRR*12 = NRR → The assumption is that Total deal value is ACV (Annual Contract Value) or TCV (Total Contract Value).
Setting up your MRR / ARR metrics in Dear Lucy requires some input from the Dear Lucy Customer Success team. Please don't hesitate to contact firstname.lastname@example.org and the CS team would be happy to answer any questions and guide you through how to report your figures in your CRM to get the right values into Dear Lucy.